Making Performance Count

The Defense Commissary Agency is seeking waivers from legislative and bureaucratic constraints to improve its ability to carry out its mission.

ash bonuses for top performers, new hiring rules and flexible budgeting are only some of the innovations being adopted by the Defense Commissary Agency as it becomes one of the first federal agencies to reorganize as a performance based organization (PBO) under the National Performance Review's strategy to improve government efficiency.
C

The agency, which operates 309 military grocery stores worldwide with annual sales of over $5 billion, officially became a PBO Oct. 1 and will adopt private-sector business practices to operate more like a commercial supermarket chain.

Retired Maj. Gen. Richard E. Beale has been appointed the first civilian director in the 130-year history of the commissaries. Beale retired from active duty Sept. 30 after leading the Defense Commissary Agency (DeCA) since 1991, when the commissary systems of each service were combined into one agency.

DeCA is one of eight federal agencies slated to become PBOs. As PBOs, the agencies will be granted waivers from some federal laws and regulations to give them more flexibility to manage their budgets and test new policies.

"DeCA was nominated as a PBO because it has a solid track record in customer service and operating efficiency," says Steve Rossetti, executive director for morale, welfare and recreation (MWR) and resale activities for DoD. "PBO status gives employees and managers the opportunity to approach the 21st century as a front-runner in government reinvention."

Since the military's commissaries were consolidated under DeCA in 1991, the agency has cut costs by nearly $300 million. But agency officials said they are at a reform standstill.

"We've already saved as much money as we possibly can since the commissaries were consolidated," says John McGowan, director of operations. "In order to preserve the benefit we need to move to the next level and become a PBO."

Employee Motivation

Several proposed changes would affect DeCA employees directly, including cash bonuses to reward employees for increased sales. The incentives will be tested in the agency's southern region. Quarterly awards of $250 and annual awards of $1,000 will go to department managers with the highest percentages of increased sales. Winners will have the option of splitting the awards with their employees.

"We're instituting a program paralleling what the grocery industry does as far as giving managers and employees more incentive to sell products," says Chet Boutelle, the southern region director. Pay for performance will also be written into Beale's employment contract as the agency's new chief executive. In addition, new hiring practices, now being tested in the Midwest, would simplify procedures and reduce paperwork.

"We'd like to be able to explore more concepts and technology from the retail world," says Wynn Hasty, director of personnel and training. "I think we've done extremely well so far."

Budgetary Freedom

Managers throughout government are frustrated because money they save in one account cannot be shifted to another account, where the money could be used to improve service. A major change under consideration at DeCA is creating a single budget fund for the agency. According to Director of Resource Management Gary Lutz, DeCA must maintain three separate accounts for managing operations, stock, and surcharge. Not only is it inefficient and expensive to keep track of three different accounts, but DeCA currently is prohibited by law from moving money between them.

"We've reduced resale inventory investment over $100 million since DeCA was established, but we cannot use these savings anywhere else," says Lutz. "The backlog of facility maintenance and repair, such as leaking roofs or deteriorated floors, could have been eliminated if DeCA had been authorized to use these one-time savings. In the private sector, you could move this cash to where it is needed and provide the best return on investment to the business."

DeCA plans to submit a legislative proposal for its 1998 budget asking for the combined fund.

Competitive Contracting

DeCA also is seeking authorization to use private contractors instead of government providers whenever contractors offer the same or better service at a lower price. For example, an in-house study by DeCA showed the agency could save $25 million per year if it used a civilian contractor to transport groceries instead of the Defense Transportation System. Under federal law, DeCA is required to use the Defense Transportation System for the approximately 21,000 tractor trailer-size containers of groceries the agency ships to commissaries overseas every year.

"We're a big part of DTS's business," said Arlene Ripp, manager of DeCA's transportation business unit. "The problem is, DeCA is a peacetime shipper but is asked to support war readiness. All DeCA customers have to pay higher rates to compensate for increased transportation expenses."

DeCA is also required to use wide area network services from the Defense Information Systems Agency (DISA). Service has been expensive and DeCA has been low on the customer "priority" list, resulting in frequent disruptions of service during data transmissions. A commercial carrier might have been able to provide the same or better service at a lower cost.

Since DeCA raised its concerns to DISA, however, the situation is improving, says Rosita Parkes, DeCA's director of information resource management.

"DeCA represents 11 percent of DISA's fiscal 1997 revenue base for use of the non-secure network and is its largest customer in terms of number of sites," Parkes said. "They've given us great cooperation and we now expect to have a 20 percent reduction in our bill next year." DeCA has also been moved up higher on the priority list. Nonetheless, the relationship with DISA will be revisited next year.

Moving Forward

DeCA also wants waivers and legislation that would ease restrictions on contracting and allow more flexibility in buying practices.

"We are uniquely qualified to be a test agency for a change in [procurement] rules," said Acquisition Management Director Crosby H. Johnson. "There are a lot of hoops you have to jump through in contracting to buy commodities. That makes sense for some DOD agencies. But we don't buy tanks and guns. We buy and sell groceries."

As one of the first PBOs in the federal government, DeCA has many trails to blaze. It needs to obtain DoD waivers and seek Congressional approval to make the changes necessary to achieve greater control over its budget, gain more flexibility in contracting and procurement, and adopt private-sector personnel management practices. The agency will have to confront employees' concerns about losing benefits and job security in a PBO. And, of course, DeCA will have to produce results that justify less agency and legislative oversight.

Defense Department Comptroller John Hamre is confident DeCA will rise to the occasion. "It's been a lot of fun representing the vice president in handing out awards to DeCA for the path-breaking achievements they've had and they've done it with a lot of shackles," says Hamre. "Hopefully, with standing up as a PBO, we're going to start taking off some of the shackles and let some of the power inside this organization flourish."

NEXT STORY: Nick of Time

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.