- The Washington Times
Thursday, May 7, 2020

The Pentagon says combining separate retail operations across the services into a single agency will save the taxpayer almost $700 million to more than $1 billion in the next five years. But the U.S. Government Accountability Office isn’t so sure.

In a recently released report, the government watchdog agency says a Department of Defense consolidation task force set up to study the idea may have overestimated savings and underestimated costs.


The military retail agencies under review for possible consolidation are the Defense Commissary Agency (DeCA), the Army and Air Force Exchange System (AAFES), the Navy Exchange Service Command and Marine Corps Community Services.

“These organizations sell groceries and retail goods to servicemembers, their families and retirees,” the authors wrote.

In a letter to the chair and ranking members of the House and Senate armed services committees, a coalition of military family organizations say they aren’t opposed to studying consolidation and streamlining military resale operations to gain efficiencies.

“We urge caution in implementing changes to a fragile military community ecosystem that may impact other important programs,” according to the letter from the Alexandria, Va.-based group The Military Coalition.

Under federal law, the commissary and exchange systems may not be consolidated unless Congress signs off on it.

The Department of Defense task force estimated they could save several hundred million dollars by reducing the cost of purchasing the goods that are resold in their stores. But the supermarket-like military commissaries and the post and base exchanges, which resemble civilian department stores, offer different goods.

“The overlap between [Defense Commissary Agency] and those of at least one exchange organization amounts to less than one-third of the total costs of goods sold,” according to the report.

The GAO investigators also said the estimate announced by the task force for information technology costs was based primarily on minor upgrades or partial replacements and not major upgrades or system repairs.

The task force also failed to include cost estimates for relocation in their analysis.

“According to [them,] there will be costs if DoD decides to relocate the four defense resale organizations to a new headquarters location,” the authors of the GAO report stated.

In April 2019, the Defense Department told Congress that the military services agreed with the plan to consolidate the grocery and retail operations there. But the GAO said the Pentagon needs to update its estimates for consolidation savings and costs.

The GAO authors says the Defense Department also needs to be more forthcoming with information about Pentagon interest in consolidating the band.


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