Defense Infrastructure
Personnel Reductions Have Not Hampered Most Commissaries' Store Operations and Customer Service Gao ID: GAO-03-417 March 6, 2003In response to concerns about the impact of proposed cuts in the Defense Commissary Agency's workforce, the House Armed Services Committee placed in its report on the Bob Stump National Defense Authorization Act for Fiscal Year 2003 a requirement that we evaluate the effect of the personnel reductions. Specifically, we assessed (1) the status of personnel reductions and how they have affected store operations and customer service, and (2) whether the agency uses a reliable methodology to measure customer satisfaction with its commissaries.
The Defense Commissary Agency's commissary operations and customer services have been maintained at the same level, and in some cases improved, despite the recent reductions in workforce. As of December 31, 2002, the agency had completed most of its 3,047 planned personnel reductions in full-time positions. It accomplished this primarily by achieving efficiencies or eliminating vacant positions in the stores. Only 122 employees have been separated and 341 retired as a result of the personnel cutbacks. A major focus of DeCA's personnel reductions, as outlined in its strategic plan, was to reshape the workforce and develop a more efficient organization. We found that commissaries are making greater use of part-time employees because of the reductions. This has allowed some stores to increase their operating hours to better meet customer needs. It has also given store managers more flexibility in meeting workload fluctuations. However, DeCA's strategic plan does not include specific goals for achieving a certain full-time/part-time workforce mix in stores. As a result, the planned percentage of part-time positions varies widely by store. A recent customer satisfaction survey showed that commissary patrons expressed high satisfaction with their overall shopping experience, as well as with such key indicators as time waiting in line and convenient hours. However, the managers of the smaller commissaries reported concerns over balancing workload and maintaining store operations. We found that the Commissary Customer Satisfaction Survey methodology is reasonable. However, some improvements in the analysis of survey data could ensure that the findings are more complete and consistent. Such changes could include adjusting survey results for the volume of sales at individual stores or for the number of shoppers who refuse to fill out the questionnaire. Furthermore, the current survey does not collect information on the number of, and reasons why, potential customers do not shop at their local commissaries.
RecommendationsOur 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.
Director: Team: Phone:GAO-03-417, Defense Infrastructure: Personnel Reductions Have Not Hampered Most Commissaries' Store Operations and Customer Service
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Report to the Senate and House Committees on Armed Services and
Subcommittees on Defense, Senate and House Committees on
Appropriations:
United States General Accounting Office:
GAO:
March 2003:
DEFENSE INFRASTRUCTURE:
Personnel Reductions Have Not Hampered Most Commissaries‘ Store
Operations and Customer Service:
Defense Infrastructure:
GAO-03-417:
GAO Highlights:
Highlights of GAO-03-417, a report to Senate and House Committees on
Armed Services and Subcommittees on Defense, Senate and House
Committees on Appropriations
Why GAO Did This Study:
In response to concerns about the impact of proposed cuts in the
Defense Commissary Agency‘s workforce, the House Armed Services
Committee placed in its report on the Bob Stump National Defense
Authorization Act for Fiscal Year 2003 a requirement that we evaluate
the effect of the personnel reductions. Specifically, we assessed (1)
the status of personnel reductions and how they have affected store
operations and customer service, and (2) whether the agency uses a
reliable methodology to measure customer satisfaction with its
commissaries.
What GAO Found:
The Defense Commissary Agency‘s commissary operations and customer
services have been maintained at the same level, and in some cases
improved, despite the recent reductions in workforce. As of
December 31, 2002, the agency had completed most of its 3,047 planned
personnel reductions in full-time positions. It accomplished this
primarily by achieving efficiencies or eliminating vacant positions
in the stores. Only 122 employees have been separated and 341 retired
as a result of the personnel cutbacks. A major focus of DeCA‘s
personnel reductions, as outlined in its strategic plan, was to
reshape the workforce and develop a more efficient organization.
We found that commissaries are making greater use of part-time
employees because of the reductions. This has allowed some stores
to increase their operating hours to better meet customer needs.
It has also given store managers more flexibility in meeting
workload fluctuations. However, DeCA‘s strategic plan does not
include specific goals for achieving a certain full-time/part-
time workforce mix in stores. As a result, the planned
percentage of part-time positions varies widely by store.
A recent customer satisfaction survey showed that commissary
patrons expressed high satisfaction with their overall shopping
experience, as well as with such key indicators as time waiting
in line and convenient hours. However, the managers of the smaller
commissaries reported concerns over balancing workload and
maintaining store
operations. We found that the Commissary Customer Satisfaction
Survey methodology is reasonable. However, some improvements in the
analysis of survey data could ensure that the findings are more
complete and consistent. Such changes could include adjusting survey
results for the volume of sales at individual stores or for the
number of shoppers who refuse to fill out the questionnaire.
Furthermore, the current survey does not collect information on the
number of, and reasons why, potential customers do not shop at their
local commissaries.
What GAO Recommends:
We are recommending that the Under Secretary of Defense (Personnel and
Readiness) require the Director of the Defense Commissary Agency to:
(1) update the agency‘s strategic plan to include goals that identify
the percentage of the store workforce that is expected to be full- and
part-time, (2) reassess management staffing for small stores, (3)
adjust customer survey results on the basis of a store‘s sales volume,
(4) collect data on customers who refuse to fill out survey forms,
and (5) examine potential survey methods to periodically determine how
many potential customers do not shop at commissaries and the reasons
why not. The Department of Defense agreed with four of our five
recommendations. It disagreed with the recommendation to identify
goals for the projected workforce mix.
www.gao.gov/cgi-bin/getrpt?GAO-03-417. To view the full report,
including the scope and methodology, click on the link above. For
more information, contact Barry Holman at (202) 512-8412 or
holmanb@gao.gov.
Contents:
Letter:
Results in Brief:
Background:
Personnel Reductions Have Not Hampered Most Commissaries‘ Store
Operations or Customer Satisfaction:
Customer Satisfaction Survey Methodology Is Reasonable, but Analysis
Could Be Improved:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Scope and Methodology:
Appendix I: Commissary Customer Service Survey Questionnaire:
Appendix II: Comments from the Department of Defense:
Tables:
Table 1: Planned Personnel Reductions by Organizational Level:
Table 2: Planned Personnel Reductions at Store Level, by Method:
Table 3: Range of Percentages of Part-time Positions Planned by Stores,
by Region and by Store Band at the End of Fiscal Year 2003:
Table 4: Customer Satisfaction Scores on Recent Surveys, for Product
and Service Categories:
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United States General Accounting Office:
Washington, DC 20548:
March 6, 2003:
Congressional Requesters:
In January 2001, the Defense Commissary Agency (DeCA), which operates
276 stores in the United States and abroad for military personnel and
retirees, issued a strategic plan that outlined initiatives to reduce
its unit operating costs by 7 percent by fiscal year 2004. A major
focus of the unit cost reduction objective was to reshape the workforce
by reducing full-time positions and developing a more efficient
organization. This plan called for the elimination of over 3,000 full-
time positions--about 2,700 in stores through efficiencies, closures,
and contracting out some functions and about 350 through efficiencies
in the regional offices and headquarters.[Footnote 1] The agency
expects these actions to save about $82 million without any loss of
service to its customers.[Footnote 2] As a result of these savings,
DeCA reduced its fiscal year 2003 budget request.
In response to a requirement in the Committee on Armed Services House
of Representatives‘ report accompanying the Bob Stump National Defense
Authorization Act for Fiscal Year 2003, we reviewed DeCA‘s plan to
reduce personnel.[Footnote 3] Our objectives were to assess (1) the
status of personnel reductions and their effect on store operations and
customer service, and (2) whether the agency uses a reasonable
methodology to measure customer satisfaction.
Results in Brief:
DeCA‘s store operations and customer service have been maintained
and in some cases improved despite the personnel reductions. As of
December 31, 2002, DeCA had eliminated 2,602, or 85 percent, of the
planned 3,047 full-time positions, mostly at the stores by implementing
new staffing standards or eliminating vacant positions; very few of
these employees have been separated from the agency by a reduction in
force. We found that greater use of part-time employees, as a result of
the reductions, has provided store directors with flexibility to meet
workload fluctuations and enabled some stores to increase their
operating hours to meet customer needs. However, DeCA‘s strategic plan,
which addresses its force downsizing and reshaping initiatives, does
not include specific goals for achieving a certain full-time/part-time
workforce mix in stores. As a result, the planned percentage of part-
time positions varies widely by individual store and region. The
November 2002 Commissary Customer Service Survey showed scores stayed
the same or increased slightly compared to the past two surveys for
overall high customer satisfaction, and for such key indicators as time
waiting in line and convenient hours. However, managers of some small
stores are having difficulty balancing their workloads as a result of
the reductions in management positions. DeCA officials are aware of but
have not yet identified a plan to address the small store management
issue.
DeCA‘s Commissary Customer Service Survey methodology is a reasonable
approach to collect customer feedback. It adheres to standard
questionnaire design standards and seeks to survey shoppers in an
unbiased manner. However, some improvements in the analysis of the
survey data could be made to ensure that results are more precise and
consistent. For example, the agency does not explicitly adjust survey
results for actual store sales volumes or document the number of
shoppers who refuse to complete the survey questionnaire. Because these
factors are not considered, overall survey results could be distorted
to some degree. Furthermore, the current survey does not collect
information on the number of and reasons why, potential customers do
not shop at a commissary.
We are making recommendations to the Under Secretary of Defense
(Personnel and Readiness) to help DeCA achieve its strategic objective
of reshaping the workforce as well as improve its customer satisfaction
survey process. In comments on a draft of this report, the Department
of Defense agreed with four of our five recommendations. It disagreed
with our recommendation that the Under Secretary direct the Director,
Defense Commissary Agency, to update its strategic plan to include
goals that identify the percent of store workforce that is expected to
be full-and part-time.
Background:
DeCA, headquartered at Fort Lee, Virginia, is the Department of
Defense‘s designated agency for managing commissaries on a worldwide
basis. A Commissary Operating Board, which is comprised of
representatives from each of the military services, has day-to-day
operational oversight responsibilities for DeCA. The Under Secretary of
Defense (Personnel and Readiness) exercises overall supervision of the
commissary system. DeCA operates four regional offices that oversee the
management of its commissaries. Commissaries are located in 46 states
and 14 foreign countries. As of November 7, 2002, the agency had
276 stores and more than 16,000 employees under its purview. Its annual
sales in fiscal year 2002 amounted to about $5 billion.
In meeting its mission of providing groceries at a savings to the
customer, in the most efficient and effective manner possible, DeCA
strives to provide the lowest cost possible, charging patrons only for
the cost of goods plus a 5-percent surcharge.[Footnote 4] DeCA receives
about $1 billion in direct appropriations from Congress for its annual
operating costs. These funds pay for employees‘ salaries,
transportation, some above-store-level information technology, and
other expenses. DeCA also operates a resale stock fund for the purchase
and sale of products. To the extent that savings in operating costs
occur, they reduce the need for appropriated funds. The savings in
store operating costs do not have an effect on the cost of merchandise
sold to customers.
In January 2001, DeCA issued its current strategic plan. This plan
included objectives to reduce unit operating costs and reshape the
workforce while maintaining or improving customer service and
satisfaction. A major focus of the unit cost reduction objective was to
reduce positions as well as streamline operations and develop a more
efficient organization. To reshape the workforce, DeCA planned to
determine the appropriate mix of skills and expertise and the
appropriate level of part-time employees to carry out the reductions to
reach a more efficient organization.
DeCA conducts a biannual Commissary Customer Service Survey to
assess customer views of products and services.[Footnote 5] A team
appointed by each store director administers the survey. Customers are
systematically selected while waiting in checkout lines. A
predetermined number of questionnaires are collected during three
periods (morning, midday, and evening) each day for 10 consecutive days
during May and November each year. The survey questions are multiple
choice with space available for written comments. See appendix I for a
copy of the questionnaire. The completed forms are mailed to DeCA
headquarters for analysis, and customer service scores are calculated
for DeCA overall and for each region and store.
Personnel Reductions Have Not Hampered Most Commissaries‘ Store
Operations or Customer Satisfaction:
Despite the workforce reductions, store operations and customer service
have been maintained at the same level, and in some cases improved.
DeCA has used various measures to eliminate 2,602 full-time positions,
or 85 percent of the planned reductions as of December 31, 2002; very
few employees have been separated from the agency. While downsizing and
reshaping were occurring, regional officials stated that they
encouraged store directors to use part-time positions to maintain store
operations. DeCA officials stated the use of part-time employees has
enabled store directors to better manage workload fluctuations, expand
hours of operation, and thereby improve customer service. However,
because DeCA‘s strategic plan does not include specific goals for
achieving a certain full-time/part-time workforce mix in stores, the
planned percentage of part-time positions varies widely by individual
store and region. Despite personnel reductions, scores for the customer
satisfaction surveys completed since DeCA began the personnel
reductions show the same or slightly increasing levels of customer
satisfaction with the stores. Notwithstanding the improvements,
managers of small stores report having difficulty balancing store
operations and duties, as a result of the reductions in the number of
management positions.[Footnote 6]
Savings Achieved Through Personnel Reductions:
DeCA is using workforce reductions as the primary means to achieve its
goal of reducing operating costs by fiscal year 2004. As table 1 shows,
DeCA plans to reduce its workforce by 3,047 full-time positions, a
decrease of 17 percent from its fiscal year 2000 staff. Of these
positions, the largest number (2,690) will come from reductions at the
store level while 187 will come from headquarters and 170 from regional
offices.
Table 1: Planned Personnel Reductions by Organizational Level:
Organization: Headquarters[A]; Fiscal year 2000 baseline: 911;
Reductions in full-time positions: Planned: 187; Reductions in full-
time positions: Actual 12/31/02: 116.
Organization: Regional offices; Fiscal year 2000 baseline: 590;
Reductions in full-time positions: Planned: 170; Reductions in full-
time positions: Actual 12/31/02: 170.
Organization: Stores; Fiscal year 2000 baseline: 16,565; Reductions in
full-time positions: Planned: 2,690; Reductions in full-time positions:
Actual 12/31/02: 2,316.
Organization: Total; Fiscal year 2000 baseline: 18,066; Reductions in
full-time positions: Planned: 3,047; Reductions in full-time positions:
Actual 12/31/02: 2,602.
[A] Includes field operating activities.
[End of table]
Source: DeCA.
As of December 31, 2002, DeCA had completed all of its workforce
reductions at the regional offices and 62 percent of its planned
headquarters‘ reductions. It accomplished this by eliminating 137
vacant positions (114 in headquarters and 23 in the regional offices).
It reduced its regional staff by another 147 positions through
organizational changes and other efficiencies, including closing two
area offices in one region.
By the same date, DeCA had completed most of its planned workforce
reductions at the store level, eliminating 2,316, or 86 percent of the
2,690 positions that it had targeted. As table 2 indicates, most of the
planned store-level reductions (51 percent) are being achieved by
implementing efficiency measures within stores. Efficiencies are being
derived by implementing new staffing standards for each department
within a store based on sales volume and other measures. The remaining
reductions are accomplished by other methods, including eliminating
vacant positions, closing stores, and contracting out some functions.
Table 2: Planned Personnel Reductions at Store Level, by Method:
Method: Achieve efficiencies through new staffing standards; Number:
1,374; Percent: 51.
Method: Eliminate vacant positions; Number: 812; Percent: 30.
Method: Close stores; Number: 361; Percent: 13.
Method: Contract out; Number: 143; Percent: 5.
Method: Total; Number: 2,690; Percent: 99[A].
[A] Percentages do not add to 100 due to rounding.
[End of table]
Source: DeCA.
A breakdown of completed and planned workforce reductions at the store
level are as follows:
* 1,113 positions were eliminated by implementing the new store
staffing standards based on sales volume. The remaining 261 efficiency
reductions are planned in fiscal year 2003.
* 812 vacant positions were eliminated. A DeCA official stated that
vacant positions existed because stores had historically been funded at
only 90 percent of their required staffing. The elimination of these
positions resulted in no personnel losses and produced no savings.
* 304 positions were eliminated as a result of 15 store closings.
Closings can stem from Base Realignment and Closure recommendations or
Under Secretary of Defense (Personnel and Readiness) approval of DeCA‘s
recommendations from internal assessments. An additional 49 positions
will be eliminated at two stores scheduled to close in fiscal year
2003.[Footnote 7]
* 87 positions were eliminated by contracting out such store functions
as receiving, handling, and stocking. An additional 30 positions at
various stores will be eliminated in this way in fiscal year 2003. The
remaining 26 planned reductions were canceled to provide positions for
a new computer-aided ordering function.
Although DeCA had eliminated most of the planned 2,690 positions from
its stores by the end of 2002, only 122 store employees were separated
from the agency by a reduction in force and an additional 341 employees
retired. Other employees were reassigned or moved to lower graded
positions through the reduction process.
Stores Plan Greater Reliance on Part-time Positions but Lack Specific
Goals for Workforce Mix:
As part of the effort to reshape the workforce, all stores have begun
to, or plan to, increase the use of part-time positions to manage
workloads and meet the needs of customers. However, since DeCA‘s
strategic plan does not include specific goals for achieving a certain
full-time/part-time workforce mix in stores, the planned percentage of
part-time positions varies widely by individual store and region.
The available data shows that the number of part-time positions in
stores has increased since the personnel reduction plan went into
effect. For example, the number of part-time employees rose by
8 percent in stores in the Midwest region between April 2001 and
October 2002. Store directors told us that using part-time employees
improved their ability to manage fluctuations in store workloads more
effectively. For example, a store director said that part-time
employees were used during weekends and holidays to save money. Another
store director pointed out that part-time employees are available to
work if there is work to do in a department or cover a peak shopping
period, but they can be sent home if the work is completed. In
addition, some store directors told us that a greater use of part-time
workers has allowed them to increase their store operating hours. We
found that 30 stores have increased their hours of operation by relying
more heavily on part-time employees. For example, one store with a
part-time workforce of nearly 60 percent increased its operating hours
by 6 hours a week.
In addition, current individual store plans call for a growth in the
number of part-time positions in stores as of the end of fiscal year
2003. The Eastern and Midwest regions estimate that about 56 percent of
their store positions will be part-time, and the Western Pacific region
estimates 46 percent of its store positions will be part-time. Table 3
shows the range in the percentage of part-time positions that stores
within each sales band plan to employ.
Table 3: Range of Percentages of Part-time Positions Planned by Stores,
by RegionA and by Store BandB at the End of Fiscal Year 2003:
Store band: 1; Eastern
region: 25-100; Midwest
region: 7-67; Western Pacific
region: 14-45.
Store band: 2; Eastern
region: 28-71; Midwest
region: 45-68; Western Pacific
region: 47-57.
Store band: 3; Eastern
region: 41-56; Midwest
region: 24-61; Western Pacific
region: 7-67.
Store band: 4; Eastern
region: 27-72; Midwest
region: 34-71; Western Pacific
region: 21-65.
Store band: 5; Eastern
region: 34-76; Midwest
region: 42-78; Western Pacific
region: 24-64.
Store band: 6; Eastern
region: 40-70; Midwest
region: 50-67; Western Pacific
region: 23-66.
Store band: Average part-time positions in region; Eastern
region: 53; Midwest
region: 56; Western Pacific
region: 46.
[A] The European Region was not included in the scope of work.
[B] Stores are categorized into six bands according to their average
monthly sales volume and days of operation.
[End of table]
Source: DeCA.
As table 3 shows, the planned percentage of part-time positions varies
widely by individual store and region. For example, one Eastern region
store expects to convert all of its store positions to part time while
another store in the Western Pacific region plans to have only
7 percent of its workforce as part time. While some stores are close to
the 75 to 80 percent industry average for part-time positions in
commercial grocery stores, the overall regional average of part-time
positions indicates that there are opportunities to achieve more
efficiencies through greater use of part-time positions.
Store directors have the flexibility of changing the mix of full-time
and part-time positions in their stores. Some store directors told us
they used part-time positions primarily to meet their budget goals. One
store director said that part-time positions were created to meet the
store‘s budget and that there were no plans to increase part-time
positions in the store once the needed reductions were made. However,
nearly all of the store directors we interviewed said that they could
operate their stores with more part-time positions rather than full-
time positions. As indicated earlier, they recognized that part-time
positions provide flexibility to manage workload fluctuations more
effectively. A regional director said that agencywide goals for part-
time workers need to be incorporated into the strategic plan to
optimize agency efforts to reshape the workforce.
Customer Satisfaction Remains High Despite Workforce Reductions:
According to recent surveys, customer satisfaction with commissary
stores has shown a modest, but steady, improvement between October 2001
and November 2002, the period when personnel reductions were being
made. These improvements were registered in the overall score, ranging
from 4.33 to 4.39, as well as in specific products and service
categories. Table 4 includes results for 6 of the 14 questions, as well
as the overall score.
Table 4: Customer Satisfaction ScoresA on Recent Surveys, for Product
and Service Categories:
(Continued From Previous Page)
Category: Produce quality/selection; October
2001: 4.22; May
2002: 4.26; November
2002: 4.27.
Category: Meat quality/selection; October
2001: 4.30; May
2002: 4.35; November
2002: 4.37.
Category: Checkout waiting time; October
2001: 4.34; May
2002: 4.39; November
2002: 4.39.
Category: Convenient hours; October
2001: 4.33; May
2002: 4.36; November
2002: 4.38.
Category: Courteous, friendly and helpful employees; October
2001: 4.64; May
2002: 4.64; November
2002: 4.66.
Category: Overall satisfaction; October
2001: 4.49; May
2002: 4.52; November
2002: 4.53.
Category: Overall score; October
2001: 4.33; May
2002: 4.38; November
2002: 4.39.
Note: DeCA also collects data on bakery and deli operations, which are
both operated by contractors.
[A] Scores are based upon a scale of 1 (very poor) to 5 (very good).
[End of table]
Source: DeCA.
These scores reflect continuing satisfaction including those likely to
be most immediately affected by changes in personnel levels such as
checkout waiting time.
Reductions in Management Positions at Small Stores Is Causing Some
Concerns:
As part of the effort to reshape the workforce, many directors of small
stores (bands 1 and 2) told us they had to eliminate one managerial
position. Small stores that have less than $60,000 in average monthly
sales were required to reduce the number of managers to one manager.
Small stores with $60,000 to $500,000 in average monthly sales had to
reduce their number to two managers. The managers of 15 of the 28
band 1 stores told us that they are having difficulties balancing store
operations with their own managerial and administrative duties along
with doing the work of absent employees. Some store directors said they
typically have to work more than 40 hours a week to perform all these
duties.[Footnote 8] Eighty-seven percent of these 15 band 1 stores are
open more than 40 hours a week. Because DeCA policy requires that a
manager be present in the store when it is open for customers, when the
second manager or an employee is absent, the on-duty manager has to
carry his/her own workload and administrative functions, as well as the
load of the absent manager or employee, typically working over the
usual 40-hour work week. DeCA headquarters officials have recognized
the concerns raised by managers in small stores and the need to balance
their overall workload but have not yet developed a plan for doing so.
Customer Satisfaction Survey Methodology Is Reasonable, but Analysis
Could Be Improved:
Overall, DeCA‘s customer satisfaction survey methodology is a
reasonable approach to obtain customer feedback. It adheres to standard
questionnaire design principles, and attempts to select shoppers in an
unbiased fashion. However, some improvements in the analysis of survey
data could be made to provide more precise and complete customer
information. For example, it could adjust survey results for actual
sales volumes, or report and possibly adjust for shoppers who refuse to
complete the survey questionnaire. Because these factors are not
considered, overall survey results could be distorted to some degree.
Furthermore, the current survey does not collect information on the
number of service members who do not shop at a commissary and reasons
why they do not.
Weighting Survey Responses by Current Sales Volume Categories May Give
Incomplete Results:
DeCA‘s current methodology appropriately attempts to obtain more survey
responses from stores with higher sales volumes than stores with
smaller sales volumes. DeCA places commissaries into three groups
according to sales volume. They do this so that survey responses of
customers in greater sales volume stores receive more emphasis than
those in lower volume stores. For example, stores in the largest sales
volume group are required to collect 150 responses, stores in the next
largest sales group collect 100 responses, and those in the lowest
sales volume group collect 50 responses. However, sales volume can vary
significantly among the stores in the same group as well as between
groups. A more precise methodology would entail weighting survey
responses by the relative sales volume of individual stores. This
approach could help DeCA avoid potential over-or underreporting of
survey results, and evaluate changes in survey results that may be
impacted by changes in sales volume.
Number of Non-respondents Needs to Be Recorded:
DeCA does not document the number of customers who refuse to
participate in the customer satisfaction survey. DeCA officials told us
that most customers selected to participate in the survey willingly
respond, but they acknowledge that documenting the number of
non-respondents would enhance survey reporting. Survey literature
indicates that even nominally low levels of non-responses can influence
the interpretation of survey results. There may be a particular sub-
group of customers that does not respond to the questionnaire and that
would not be reflected in DeCA results. By not adjusting for non-
response, DeCA is assuming that respondents have similar satisfaction
scores as non-respondents. Also, by collecting data on non-respondents,
the agency may be able to determine if the results omit customer
subgroups whose opinions may be important. For example, some dependents
of service personnel may not feel comfortable participating in the
survey because of language barriers.
Assessing Why Eligible Shoppers Do Not Shop at Commissaries:
DeCA does not conduct systematic assessments of the number and types of
personnel who do not shop at commissaries. The customer satisfaction
survey is conducted in the stores, and thus reflects the views of those
who shop at the commissaries. They do not capture the views of those
who do not shop there. Although DeCA‘s strategic plan addresses the
need to attract more military personnel to use the commissary, DeCA
officials do not know to what extent eligible customers are not
shopping at a commissary and the reasons why not.
Conclusions:
Realignment of the workforce, through greater use of part-time
employees, has enabled many stores to increase their operating hours
and maintain or improve customer service. However, DeCA‘s strategic
plan does not include specific goals for the full-time/part-time
workforce mix. As a result, the extent of part-time employees varied
among the stores and is significantly less than current industry
practice. Opportunities to achieve even more efficiencies may exist
through greater use of part-time positions. In addition, small store
directors have concerns about balancing their workload and maintaining
store operations. Although DeCA‘s customer satisfaction survey
questionnaire is reasonable, survey results could be subject to some
under-or over-stated because the current methodology does not
explicitly weight stores‘ results by sales volume and does not collect
data on non-responding customers. Finally, DeCA does not know how many
eligible service members do not shop at a commissary and the reasons
they do not.
Recommendations for Executive Action:
We recommend that the Under Secretary of Defense (Personnel and
Readiness), in consultation with the Chairman, Commissary Operating
Board, require the Director, Defense Commissary Agency, to:
* update the strategic plan to include goals that identify the percent
of the store workforce that is expected to be full-and part-time to
achieve further efficiencies from reshaping the workforce;
* reassess the management reductions at small stores to ensure managers
can balance their workload and maintain store operations;
* adjust the customer survey results on the basis of sales volume and
customer expenditure data;
* document the number of survey non-respondents and their reasons for
not completing the questionnaire; and:
* examine potential methods and analyses to periodically determine how
many and why eligible personnel do not shop at commissaries, to
identify ways to improve service and increase the number of potential
customers using the commissary benefit.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, the Under Secretary of
Defense (Personnel and Readiness) concurred with four of our five
recommendations and outlined actions to be taken to address the four
recommendations the department concurred with. He disagreed with our
recommendation that the Defense Commissary Agency update its strategic
plan to include goals that identify the percent of the store workforce
that is expected to be full-and part-time, expressing the view that
staff in Washington should not prescribe the full-part-time mix for
stores. The intent of our recommendation was not for the Under
Secretary to prescribe the workforce mix for stores but rather have the
Defense Commissary Agency include agencywide goals on the projected
workforce mix in its strategic plan to help achieve the goal of
reshaping the workforce. Rather than being arbitrary or prescriptive,
such goals, if based on considered research or best practices, could
provide an important term of reference to guide staffing decisions at
the local level to optimize organizational performance and cost
effectiveness. We continue to believe the recommendation is an
appropriate one for the Defense Commissary Agency to implement. The
department‘s comments are reprinted in appendix II.
Scope and Methodology:
We performed our work at DeCA headquarters located at Fort Lee,
Virginia, and DeCA‘s three regional offices in the continental United
States (the Eastern Regional Office in Virginia Beach, Virginia; the
Midwest Regional Office in San Antonio, Texas; and the Western Pacific
Regional Office in Sacramento, California). Due to travel costs and
time constraints, we did not do any work at the European Regional
Office in Germany; however, the total number of reductions shown for
DeCA does include positions in the European Region.
To determine the status of DeCA‘s personnel reduction plan, we
obtained data from DeCA headquarters and each regional office on the
number of reductions planned by region by store as well as made as of
December 31, 2002. We also analyzed reduction-in-force data to
determine the actual or estimated impact on store employees. We also
reviewed DeCA‘s strategic plan to document DeCA‘s plans for reducing
unit operating costs and reshaping the workforce. We did not validate
the cost savings reported by DeCA.
To determine how store operations and customer service have been
affected by the personnel reductions, we interviewed officials at DeCA
headquarters and the three regional offices in the United States. We
also interviewed store directors at eight stores that were near the
Eastern and Midwest regional offices. In addition, we also conducted
telephone interviews with either the store directors or managers for
38 band 1 and 2 stores in the continental United States (defined as
having average monthly sales volume of less than $1 million), resulting
in interviews of all 41 band 1 and 2 stores in the continental United
States. We also determined the planned use of part-time positions by
each store in the three regional offices visited. Finally, we also
reviewed and discussed the Commissary Customer Service Survey results
for the surveys conducted in October 2001 and May and November 2002, to
identify changes in the satisfaction scores as the personnel reductions
were being implemented.
To determine if the DeCA customer satisfaction survey methodology is
reasonable, we reviewed DeCA‘s questionnaire and methodology and
contrasted these to standard questionnaire design and statistical
sampling procedures used in industry and government research. We also
interviewed DeCA officials responsible for administering the survey
regarding their analysis of survey results. We also observed the survey
being conducted at the Fort Myer store in Virginia in November 2003.
We conducted our review from July 2002 through January 2003 in
accordance with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Defense; the
Under Secretary of Defense (Personnel and Readiness); the Chairman,
Commissary Operating Board; Director, Defense Commissary Agency; and
the Director, Office of Management and Budget. In addition, the report
will be available at no charge on GAO‘s Web site at www.gao.gov and to
others upon request.
Please contact me at (202) 512-8412 if you or your staff have any
questions concerning this report. Major contributors to this report
were Michael Kennedy, Leslie Gregor, Betsy Morris, Curtis Groves,
and Nancy Benco.
Barry W. Holman
Director, Defense Capabilities and Management:
Signed by Barry W. Holman
List of Congressional Committees:
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate:
The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate:
The Honorable Duncan Hunter
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives:
The Honorable Jerry Lewis
Chairman
The Honorable John P. Murtha
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives:
[End of section]
Appendix I: Commissary Customer Service Survey Questionnaire:
[See PDF for image]
[End of figure]
[End of section]
Appendix II: Comments from the Department of Defense:
UNDER SECRETARY OF DEFENSE 4000 DEFENSE PENTAGON WASHINGTON, D.C.
20301-4000:
FEB 26, 2003:
PERSONNEL AND READINESS:
Mr. Barry Holman:
Director, Defense Capabilities and Management U.S. General Accounting
Office:
Washington, DC 20548:
Dear Mr. Holman:
This is the Department of Defense (DoD) response to the GAO Draft
Report, GAO-03-417, ’DEFENSE INFRASTRUCTURE: Personnel Reductions Have
Not Hampered Most Commissaries‘ Store Operations and Customer Service,“
dated February 7, 2003 (GAO Code 350243).
The DoD concurs with the overall comments and recommendations in the
report with one exception. I do not believe we in Washington should
prescribe the full-time/ part-time mix for stores. Rather, we should
counsel those managers who should make more aggressive use of part-time
personnel, leaving the detailed plan to them. Specific comments on the
remaining recommendations are enclosed.
Thank you for the opportunity to comment on this report.
David S. C. Chu:
Signed by David S. C. Chu
Enclosure: As stated:
GAO-03-417/GAO CODE 350243:
’DEFENSE INFRASTRUCTURE: PERSONNEL REDUCTIONS HAVE NOT HAMPERED MOST
COMMISSARIES‘ STORE OPERATIONS AND CUSTOMER SERVICE“:
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Under Secretary of
Defense (Personnel and Readiness), in consultation with the Chairman,
Commissary Operating Board, require the Director, Defense Commissary
Agency, to update the strategic plan to include goals that identify the
percent of the store workforce that is expected to be full-and part-
time to achieve further efficiencies from reshaping the workforce.
(Page 13/Draft Report).
DoD RESPONSE: Nonconcur with comment. I do not believe we in Washington
should prescribe the full-time/ part-time mix for stores. Rather, we
should counsel those managers who should make more aggressive use of
part-time personnel, leaving the detailed plan to them.
RECOMMENDATION 2: The GAO recommended that the Under Secretary of
Defense (Personnel and Readiness), in consultation with the Chairman,
Commissary Operating Board, require the Director, Defense Commissary
Agency, to reassess the management reductions at small stores to ensure
managers can balance their workload and maintain store operations.
(Page 13/Draft Report).
DoD RESPONSE: Concur. In structuring the workforce of the future, the
Department will require DeCA to reassess the management positions that
are authorized in small stores.
RECOMMENDATION 3: The GAO recommended that the Under Secretary of
Defense (Personnel and Readiness), in consultation with the Chairman,
Commissary Operating Board, require the Director, Defense Commissary
Agency, to adjust the customer survey results on the basis of sales
volume and customer expenditure data. (Page 13/Draft Report).
ENCLOSURE:
DoD RESPONSE: Concur. The Department will require the Defense
Commissary Agency to adjust customer survey results based on sales
volume as described in the report. A method for adjusting survey
results based on sales volume will be developed and fully implemented
prior to fiscal year 2004 data collection.
RECOMMENDATION 4: The GAO recommended that the Under Secretary of
Defense (Personnel and Readiness), in consultation with the Chairman,
Commissary Operating Board, require the Director, Defense Commissary
Agency, to document the number of survey non-respondents and their
reasons for not completing the questionnaire. (Page 14/Draft Report).
DoD RESPONSE: Concur. The Department will require the Defense
Commissary Agency to design and implement a method to document the
number of non-respondents. In addition, as much information as
practical will be collected in order to understand reasons for non-
response. A method to document non-respondents will be developed and
fully implemented.
RECOMMENDATION 5: The GAO recommended that the Under Secretary of
Defense (Personnel and Readiness), in consultation with the Chairman,
Commissary Operating Board, require the Director, Defense Commissary
Agency, to examine potential methods and analyses to periodically
determine how many and why eligible personnel do not shop at
commissaries, to identify ways to improve service and increase the
number of potential customers using the commissary benefit. (Page 14/
Draft Report).
DoD RESPONSE: Concur. The Department will require the Defense
Commissary Agency to examine potential methods and analyses to
periodically determine how many and why eligible personnel do not shop
at commissaries, to identify ways to improve service and increase the
number of potential customers using the commissary benefit. Potential
methods will be examined before the end of fiscal year 2003.
[End of section]
FOOTNOTES
[1] The elimination is of full-time equivalent positions.
[2] The reduction plan, which also includes savings through non-
manpower reductions such as utility and transportation costs, is to
reduce DeCA‘s appropriation by a total of $137 million in fiscal year
2003 and reduce annual operating costs through the out years.
[3] H. Rep. No. 107-436.
[4] The funds generated by the surcharge are used to maintain and
repair existing stores and construct new facilities.
[5] Prior to 2002, the survey was conducted once a year rather than
twice annually.
[6] DeCA categorizes its stores into six bands based on average monthly
sales volume and days of operation. Small stores are those with average
monthly sales of less than $1 million. Medium and large store
categories have sales ranges from $1 million to $2 million and $2
million and higher, respectively. A few medium stores have sales less
than $1 million.
[7] Stores at Rhein Main and Bad Aibling, both in Germany, are
scheduled to close.
[8] The management staffing standards show store management structure
based on sales volume. Managers of small stores typically manage from 3
to 40 employees.
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