It’s official – the Department of Defense has ended its plan to merge military commissaries and exchanges.
In a major victory for AFGE, DoD employees, and military personnel and their families, Deputy Secretary of Defense Kathleen Hicks rescinded a 2019 memorandum issued by her predecessor to merge the two systems. According to Military Times, Hicks directed DoD in an April 4 memo “to cease all efforts to consolidate the Defense resale entities”.
The move is a part of a provision in the 2019, 2020, and 2021 National Defense Authorization Acts which AFGE lobbied for. In addition, AFGE last April sent a letter to the deputy defense secretary requesting this action.
For many years, our union has been lobbying DoD and Congress to back off plans to merge the two systems.
Due to our efforts, Congress has repeatedly rejected direct attempts to diminish the commissaries, which are a vital benefit for military families, providing convenient access worldwide to groceries and household goods at cost plus a 5% surcharge.
Commissaries also are a major employer of military spouses, veterans, and family members. The proposal to merge commissaries with the entirely separate, for-profit military exchange system would have degraded the commissaries, wasted taxpayer dollars, and resulted in a cut in pay and benefits for commissary workers who would have been converted from civilian employees to non-appropriated fund workers.
When DoD used a dubious cost-analysis report as a basis to push ahead with the merger in 2019, it was AFGE who vigorously opposed it and we, in a coalition with the American Logistics Association that represented vendors to the Defense Commissary Agency and Exchanges, asked members of Congress to require an independent review of the merger plan by the Government Accountability Office.
An updated analysis ordered by Congress as part of the fiscal 2021 National Defense Authorization Act and completed in August 2021 confirmed our position. DoD’s business case analysis overstated savings from goods that are sold, understated the cost of integrating information technology systems, and failed to include costs associated with relocating headquarters operations. The consolidation would also cost an additional $1.5 billion.
This review forced DoD to announce last year it would back off the merger plans. Hicks’ memo officially ended the merger.
But in order to succeed, the commissaries will need all the funding it needs, including a $130 million addition to its appropriation that the American Logistics Association asked for.
Now that DoD has ended this foolhardy merger, it’s time to reinvest in our commissaries and strengthen this vital program that so many military families depend on.
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