Defense Management

Commissaries are stores that sell groceries and household supplies to members of the military, retirees, and their dependents. The Defense Commissary Agency manages all service commissaries worldwide and has received an average of about $1 billion in federal support annually during the past five years. The Defense Department (DOD) has proposed allowing reservists unlimited access to commissaries three times in the recent past. DOD officials view this policy change as a low- or no-cost way to increase military service benefits. This report discusses 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 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.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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