DoD Considers Retail Merger

The Defense Department is considering a proposal to merge its commissaries and exchanges into a single agency.

In a Dec. 12 memo on budgetary matters sent to department officials, DoD Comptroller William Lynn said the department would develop a plan to create a Retail Management Agency, which would oversee operations at all commissaries and exchanges.

Commissaries, which are supermarkets open only to military personnel and retirees, are managed by the Defense Commissary Agency (DeCA). DeCA sells groceries at cost and receives an annual congressional appropriation. Exchanges, which are self-supporting, sell toys, appliances, clothing and household goods. They are run by three separate military entities--the Army and Air Force jointly, the Navy and the Marines.

The Office of Management and Budget asked DoD to look at exchange and commissary organization as part of the budget process. Lynn said the department's study should be developed by March 31, in time for a program review for the fiscal 2000 budget. He also encouraged officials who question a reorganization to explain why they think a restructuring study would not be worthwhile.

In a recent report, the Congressional Budget Office suggested that commissaries and exchanges could be merged. The CBO report and several other recent studies have also suggested privatizing the commissaries.