DoD Rejects Proposed Merger of Commissaries and Exchanges

Categories: DoD, The Insider

The Department of Defense has backed off of plans to merge military commissaries with exchange stores in an effort to cut costs after further analysis showed the consolidation actually would cost an additional $1.5 billion. 

AFGE vigorously opposed the proposed consolidation when it was first proposed, arguing that merging the two distinct systems would save little if anything yet result in huge cuts in pay and benefits for commissary workers. 

An updated analysis ordered by Congress as part of the fiscal 2021 National Defense Authorization Act and completed in August confirmed our position. The 2018 business case analysis (BCA) 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 updated analysis concluded. 

“For these reasons, the Department has determined that the 2018 BCA recommendation to consolidate the resale organizations is not feasible, and no longer supports such a consolidation,” DoD said in a report to the Senate and House Armed Services committees. 

AFGE praised the decision. 

Military commissaries provide a vital benefit and employment source for military families and veterans worldwide. 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. 

Now that DoD has rejected 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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