Military Update: Commissary reforms advance with shopper safeguards

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 The McGuire Commissary at Joint Base McGuire-Dix-Lakehurst, N.J.    John Zoubra/DeCA
The McGuire Commissary at Joint Base McGuire-Dix-Lakehurst, N.J. John Zoubra/DeCA

Military Update: Commissary reforms advance with shopper safeguards

by: Tom Philpott | .
Special to Stars and Stripes | .
published: April 22, 2016

The House armed services subcommittee on military personnel unanimously has endorsed sweeping reforms to how groceries are procured, priced, promoted and sold on U.S. military bases stateside and overseas.

The commissary reform package, largely shaped by Department of Defense officials on advice from the grocery industry, has gained steam on promises to preserve most of current savings for patrons while modernizing commissary operations and lowering subsidies by more than $500 million a year by 2021.

That’s money that the Joint Chiefs of Staff have testified they want diverted into readiness accounts to help to ensure troops get the training and equipment they need even as defense budgets continue to get squeezed.

The comprehensive overhaul of commissary operations — to include authorities to test on a large scale variable pricing of store items, new private label brands, conversion of base grocers to nonappropriated fund activities like base exchanges — will be made part of the full armed services committee markup of the fiscal 2017 defense authorization bill next week.

To answer rising criticism that the department would be allowed to sacrifice some shopper savings to ensure a brisk pace of reform, Rep. Joe Heck, R-Nev., subcommittee chairman, added new language to safeguard the benefit by transparently establishing a baseline for savings, reviewing quarterly how savings are maintained through each reform, and adding taxpayer funding if store revenues from reforms fail to match expectations.

Other key personnel initiatives cleared by the subcommittee include:

* A bigger basic pay raise of 2.1 percent next January to match private-sector wage growth. The Obama administration proposed only a 1.6 percent pay hike to save $300 million in personnel costs next year alone. It was no surprise to see House panel refuse to endorse a pay cap. It would be the fourth consecutive cap on the annual military raise. For the last three the House has allowed senators to take the lead, and the heat, on the issue.

Rep. Susan Davis, D-Calif., warned colleagues that if the higher raise is enacted, that $300 million would be taken from more pressing readiness needs such as replenishing inventories of spare parts for Marine helicopters.

* More troops. The subcommittee rejected the administration’s call to cut Army active-duty strength by another 15,000. Instead it would add 5,000 soldiers, returning Army end-strength of 480,000 by October 2018. And rather than cut the Marine Corps active force by 2,000 next year, the House panel calls for boosting its end strength by 1,000, to reach 185,000.

Air Force active-duty strength would climb by 285, to reach 321,000, rather than fall by another 4,000 as the president requested. Only Navy end strength would fall as requested by 6,300 to settle at 322,900.

The Joint Chiefs, anticipating that Congress might vote to reverse planned force reductions and not add the billions of dollars needed to ensure the larger force is properly equipped and trained, had roundly criticized in recent testimony precisely what the subcommittee now proposes.
 Davis reminded colleagues of that criticism before joining them in a unanimous voice vote to send the larger force targets to full committee.

* UCMJ reform. Embraced are changes to the Uniform Code of Military Justice to improve system efficiency and transparency while also enhancing victims’ rights. They would expand the statute of limitations for child abuse offenses and fraudulent enlistment; provide public access to court documents and pleadings; allow victims input on case dispositions at the preliminary hearing stage, and add UCMJ offenses for retaliation, improper use of government computers and for credit card or debit card fraud.

Two other substantial personnel initiatives will not be detailed until full committee deliberations on Wednesday, Heck said. One would extend the Special Survivor Indemnity Allowance (SSIA) paid to 62,000 surviving spouses to restore in part Survivor Benefit Plan (SBP) pay they must forfeit to accept Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.

Reauthorizing SSIA beyond September 2017 would be so costly the full committee must be consulted on finding budget offsets to fund it, Heck said. Likewise, Heck wants the full committee to debate the shape of Tricare reforms to raise retiree fees and co-pays. At least some of the changes sought fall under the jurisdiction of other committees too, Heck explained.

The American Logistics Association, which says it represents 90 percent of the supply chain of manufacturers and distributors supporting commissaries, warned in an April 12 letter to the committee that a careful plan Congress approved last year to conduct “limited pilot programs” to test controversial commissary reforms seemed to be crumbling under pressure from the DOD to “fast track” cost-saving ideas.

Alluding to draft legislation, ALA President Patrick B. Nixon, wrote that DOD “proposed that the law governing these programs and protecting these benefits be either repealed or waived to allow DoD to immediately proceed with implementation of changes to products, pricing and funding mechanisms that have served the system well over the past 30 years.”

He urged that lawmakers not allow adoption of variable pricing or private label products or conversion of commissaries to nonappropriated fund activities like exchanges “without limitations and a deliberative process” to assess each major change. Members of Congress, commissary shoppers and other stakeholders like ALA should have a chance to critique test results and make recommendations before changes occur systemwide, Nixon wrote.

The fast-track plan, he warned, included “altering the manner in which baseline savings are measured.” Accurately measuring patron savings before reforms occur is key to ensuring that DOD officials and Congress keep their promises to retain the value of the commissary benefit.

Only a week later, however, after the subcommittee unveiled its reform provisions, ALA sounded well satisfied with new language safeguarding the benefit and allowing timely feedback from shoppers, suppliers and Congress.

They “put in adequate braking and oversight mechanisms to ensure that the commissary and exchange benefit along with commissary employees are protected in the evolving environment,” said Stephen Rossetti, ALA’s director of government affairs.

Both the subcommittee and DOD, he said, have “put responsible reforms ahead” of the goal to cut commissary funding.

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