Senators Move to Block Plan to Privatize Commissaries

A bipartisan group of 31 senators want to block a plan that would privatize some commissaries and likely raise prices before a report on the impacts of such a plan is ready.

The measure, introduced by Sen. Jim Inhofe, an Oklahoma Republican, and Sen. Barbara Mikulski, a Maryland Democrat, would instead require the Defense Commissary Agency to complete a study on the impacts of privatization ordered in 2016's annual National Defense Authorization Act.

“Last year, my Senate colleagues and I fought to block language to privatize military commissaries until a study can take place to assess the impacts, costs and benefits of such drastic action,” Inhofe said in a statement. “That study is currently underway, and once it is completed, Congress needs time to thoroughly review and consider the recommendations.”

Currently the commissary is required by law to sell goods at cost plus a five percent surcharge. Commissary operating costs are covered by an over $1 billion taxpayer subsidy. The 2016 legislation ordered the Pentagon to produce a report on how privatizing commissaries, and allowing prices to fluctuate, would impact military shoppers.

Congress asked that the study include information on common business practices, how privatizing only part of the system would work and impacts of privatization on the military's Morale, Welfare and Recreation programs. It also asked for an examination of different pricing plans, including a scheme that would base prices at the commissary on an as-yet unspecified savings over the price at stores immediately surrounding each base.

But a plan included in this the Senate's 2017 defense legislation, currently under review by lawmakers, would instead bypass that study and require the Pentagon to pilot privatization at five commissaries nationwide. Doing so would require agency to increase their profits by raising prices so that they can cover their operating costs without waiting for the results of the current study.

The Senators, with the backing of over 40 military-interest groups, including the National Military Family Association and the Iraq and Afghanistan Veterans of America, say that waiting for the previously ordered study is important.

“Privatization could place an undue burden on many of our military men and women and their families,” Mark Warner, a Virginia Democrat who co-signed the measure, said in a statement. “Launching a privatization pilot before careful study on its potential impacts is completed would be wildly premature. This amendment will sensibly prevent such a pilot from being launched until the report that Congress requested is completed.”

--Amy Bushatz can be reached at amy.bushatz@military.com. Follow her on Twitter at @amybushatz.