House panel nixes commissary privatization plan

A House oversight panel announced Thursday it would not allow the Defense Department to run a pilot program with the Army and the Marine Corps to contract out certain commissaries. The Armed Services Committee's Special Oversight Panel on Morale, Welfare and Recreation made its recommendation in its markup of the fiscal 2002 National Defense Authorization Bill (H.R. 2586). Its recommendations will now go to the full committee. The panel refused to authorize a proposal by Defense Secretary Donald Rumsfeld to contract out commissary services as a cost-saving measure. "Our major legislative accomplishment this year may be what we will not do," said Rep. Roscoe Bartlett, R-Md., the panel's chairman. "Specifically, we will not authorize the Department of Defense to test commissary privatization. I'm all for trying out new ideas, but we need a period, particularly with so many other parts of DoD under a microscope, to chart a steady course and protect a proven and treasured benefit." The Defense Commissary Agency (DeCA) runs the military's worldwide grocery store system, which includes 283 stores and more than 17,300 employees. In fiscal 2000, the agency had annual sales of $5 billion and operating costs of $1 billion. As part of an 18-month-long restructuring effort, DeCA pegged six commissaries for closure earlier this year. Management offices at Fort Meade, Md., and Maxwell Air Force Base in Montgomery, Ala., were closed to consolidate much of DeCA's Eastern Region operations at regional headquarters in Virginia Beach, Va. Employees were reassigned and offered early retirement and other separation incentives. Now the agency is considering transferring management of 25 of its Eastern Region commissaries to its Midwest Region headquarters in San Antonio. Bartlett said he was pleased with DeCA's businesslike approach to commissary operations. "The agency is making great progress that will strengthen the all-important commissary benefit for years to come," the legislator said. Bartlett also proposed to allow the Pentagon to use $40 million collected through a 5 percent commissary surcharge. According to Bartlett's spokeswoman, the surcharge fund "is just sitting there" unused. Bartlett, she said, would prefer that the money be used to build more commissaries. "I've learned to take a cautious approach to changing programs that military families have come to depend on," Bartlett said.
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