Although not completely off the table, it appears plans to consolidate the commissary and exchange systems are far more costly than originally expected, according to a new report – one echoing concerns raised by MOAA and other military and veterans groups since early in the merger discussions.

The Aug. 23 report identifies miscalculations from the previous feasibility study and states the plan actually would cost an additional $1.5 billion. In its conclusion, its authors say DoD now views the initial 2018 case study as “not feasible, and no longer supports consolidation.”

MOAA, along with several other military and veteran service organizations, expressed concern with the commissary-exchange merger since it was introduced in 2018. After the case study mentioned above concluded strong support for consolidating the defense resale system, the FY 2020 National Defense Authorization Act (NDAA) included a provision for the Government Accountability Office (GAO) to review DoD’s analysis, and the FY 2021 NDAA included requirements for further, expansive reporting.   

“MOAA and our many partners have known for years that merging the exchanges and commissaries would reduce the benefits to military families and the quality of service,” said MOAA President and CEO Lt. Gen. Dana T. Atkins, USAF (Ret). “The previous business case analysis was flawed and documented in a GAO report in April 2020. MOAA remains committed to protecting the commissary and exchange benefit and is encouraged DoD has changed course. We look forward to partnering with the exchanges and commissaries to support outreach on the importance of this benefit to the uniformed community.”

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The GAO report and the updated business case analysis revealed three areas that were either miscalculated or not even considered:

• The 2018 analysis overstated savings of the cost of goods sold because the amount of overlap between products sold by the Defense Commissary Agency and those sold by the exchanges amounts to less than one-third of the total cost of goods sold.
• Original estimates for the development of new, common IT systems to operate the consolidated system only included approximately half of the actual costs.
• Initial reports failed to account for the costs associated with establishing a new headquarters location.

In 2019, MOAA and 27 other members of The Military Coalition --  a group of organizations collectively representing nearly 5.5 million members of the military community -- sent a letter to the House and Senate armed service committees to express concern regarding moving too quickly on a commissary-exchange merger, the accuracy of the predicted costs, and the impact on military families if the merger proceeded without further review. We are pleased with the follow-on report and feasibility study which have steered DoD officials in a different direction.

Commissary Feedback

We have heard from some members of challenges with the produce and meat found at the commissary. If you are having issues with your commissary, please notify the local manager and let us know by sending an email to legis@moaa.org. Learn more about MOAA’s work to solicit commissary feedback, and how they can affect upcoming advocacy efforts, at this link.