Sweeping Commissary Proposals Worry Watchdogs, Unions, Manufacturers

A series of new proposals issued this month in a long-anticipated study on the military commissary system has raised alarms among commissary watchdogs, union officials and industry representatives.

"The intent seems to be to treat the commissary like a grocery store, and I think that overlooks the fact that that's not really its mission," said Eileen Huck, a deputy director of government relations for the National Military Family Association. "Its mission is to provide a non-pay benefit to service members and their families."

The report recommended a series of changes that would allow the commissary system to set its own prices based on region, reduce employee wages and benefits, and consolidate operations. By law, the commissary must sell goods at cost, plus a 5-percent surcharge, known as "cost-plus." Operating expenses, including employee costs, are covered by $1.4 billion in taxpayer funding.

Among the biggest recommendations is a shift to how the commissary's 15,500 employees are compensated. Currently, commissary employees are on the general schedule or wage grade systems, depending on their job. The study, which called the proposal a "win-win," suggests moving them instead to the non-appropriated funds, or NAF, government pay system, which would bring lower wages and benefits and allow for easier hiring and firing of employees.

Leaders with the American Federation of Government Employees union, which represents commissary workers, called the plan "insanity."

"Slashing the already modest pay and benefits of commissary workers is a misguided proposal to cut costs on the backs of the Pentagon's own workers, many of whom are veterans or military spouses themselves," J. David Cox Sr., the union's president, said in a statement. "Expecting these employees to do the same work for half the pay is just plain insanity."

The study recommends implementing the change by bringing on new employees under the new pay scale or by doing so while also slowly converting existing employees to the system over several years.  

The plan does not directly address the shift's impact on worker take-home pay. The only negative outcome to the decline in wages cited in the study is the potential impact to shoppers caused by lower morale among employees.

"We believe that NAF conversion may affect commissary patrons indirectly because of potential impacts to employee morale and performance," it states. "The majority of NAF conversion savings would come from reduction of wages and benefits, which could affect employee morale and negatively impact patron experience." 

Military family officials worried that allowing the Defense Commissary Agency, or DeCA, to set its own prices by region could result in those stationed in high cost of living areas paying more for their groceries. They said repealing the current cost-plus model could open the door to sweeping price increases later.

"What concerns me is that as you read into it, the emphasis is on DeCA raising enough money to operate on its own," Huck said. "I'm just afraid that you're really opening the door to what will ultimately reduce the benefit pretty significantly for families."

Lobbyists for the industry, which includes manufacturers of products such as consumer-packaged goods and electronics, said the report's suggestions would put into place new systems or processes that would ultimately hurt customers by raising prices.

"The report's recommendations need to be challenged," said Candace Wheeler, a spokeswoman for the Save Our Benefit coalition. "The Pentagon shouldn't take cuts ahead of the system's ability to absorb them without impacting patrons."

 --Amy Bushatz can be reached at Amy.Bushatz@military.com.