Defense Management:

Estimating Impact of Changes to Commissary Access Policy

NSIAD-97-45: Published: Dec 20, 1996. Publicly Released: Dec 20, 1996.

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Pursuant to a legislative requirement, GAO reviewed proposals to change the Department of Defense (DOD) policy that limits military reservists' access to commissary stores, focusing on the: (1) evolution of the policy on military reservists' access to the commissaries and proposals to change that policy; (2) sources of the Defense Commissary Agency's (DCA) funding; and (3) information needed to analyze the impact on appropriated funds of granting military reservists unlimited access to the commissary system.

GAO found that: (1) commissary access for military reservists before 1986 was limited to a maximum of 14 days and was authorized only during periods of active duty training; (2) since 1990, reservists have been authorized to earn 12 visits a year to the commissary system in addition to access during any period of active duty service; (3) DOD has submitted three proposals since 1990 to grant reservists unlimited access, but none have been adopted by Congress because of concerns about the impact such a change might have on the level of appropriated funds and the concerns expressed by civilian grocery providers about the impact on their businesses; (4) the commissary system is funded primarily from an annual appropriation that has averaged about $1 billion for fiscal years (FY) 1992 through 1996; (5) the other funding source is the 5-percent surcharge that is added to each sale in all commissary stores, which has provided an average of about $315 million over the same period; (6) while DOD has proposed legislation to grant reservists unlimited commissary access, it has not developed estimates of the potential financial impacts of such a policy change; (7) potentially, any increase in the commissary customer base, such as granting unlimited access to reservists, could increase the sales and overall workload of the commissary system and increase personnel costs, which could, in turn, increase the level of appropriated funds needed for commissary operations or, at least, cause funding levels to be higher than they would otherwise be; (8) DOD's FY 1996 and 1997 proposals called for variations of a 1-year field test to identify the effects of increased access for reservists on commissary operations; (9) field tests would give specific individuals unlimited commissary access for 1 year to develop impact studies; (10) such a test runs the risk of appearing to withdraw a benefit following the test's conclusion; (11) GAO believes that a methodologically sound study, using data that could be developed by DOD and DCA, could provide reliable estimates of the financial impact of granting reservists unlimited commissary access; and (12) key elements of such a study would be to: (a) establish baseline data by determining the current level of reservist patronage of the commissary system; (b) correlate commissary locations in the United States with reservist population concentrations to identify locations with the potential to experience increased patronage; and (c) estimate the effects of increased commissary sales/workloads on operating costs and the level of appropriated fund support needed.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: A contract was awarded in June 1998 for the recommended study. Completion is scheduled for December 1998. Congress subsequently doubled reservists' access to commissaries from 12 to 24 days annually.

    Recommendation: The Secretary of Defense should ensure that any future legislative proposal to expand commissary access for military reservists be supported by a methodologically sound analysis that estimates the potential impact on appropriated fund support for the commissary system.

    Agency Affected: Department of Defense

 

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