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Editorial Comment — June 2012

Guidelines, Goals and Yardsticks ...

As Memorial Day approached, the National Defense Authorization Act for 2013 was off to an early start: with H.R. 4310 already passed by the House, and the Senate Armed Services Committee (SASC) done with its markup (though not its report) of the Senate's own bill, S. 3254. Apparently, there are no direct assaults on military resale in either bill, as we saw last year with attempts to include consolidation amendments

That said, there are some concerns with a few proposals in this year's House bill, which, if signed into law, could add cost burdens to resale systems at a time when ... well, we thought the whole idea was to shed them

Perhaps the most far-reaching proposal is one that is not in the bill itself, but in the House Armed Services Committee's (HASC) report on H.R. 4310, calling for a study on military resale participation in state and local container deposit programs, and a recommendation concerning the propriety of doing so.

The HASC said it understood that as federal government agencies, resale systems "would not historically participate in state and local programs that are viewed as taxation," although container deposit programs are generally viewed as user fees. The Committee has asked for a report, due by the end of March, to help it better understand the impacts, costs, and burdens of such a decision — on patrons, on the operations and financial management of resale organizations, as well as the potential for setting precedents for all appropriated and nonappropriated fund activities, and other legal and constitutional questions.

Last year, as many remember, the Defense Commissary Agency (DeCA) reorganized itself in response to then-Secretary of Defense Robert Gates' "Track Four Efficiencies," to once again "do more with less."

Two proposals associated with this year's authorization bills, however, could very well compel DeCA and the exchanges to add personnel.

The first calls for guidelines to be established for the purchase of sustainable products, local food products and recyclable materials for resale in commissary and exchange store systems.

"Going Local" and "Sustainability" are two buzzwords in grocery shopping and business in general that rank high among the preferences for a certain percentage of patrons. If you don't have specific amounts and types of these products on the shelves, you are going to lose those customers to the mall, anyway. DeCA, the military exchange systems, their suppliers and distributors long ago began to take steps to include these products in their assortments through what they do best every day — category management — in the right measure, in the right places, at the right prices, where it makes business sense, and where it makes demographic sense for patrons.

What's potentially counterproductive here is the need to codify local and sustainable buying in the resale community. In order to comply with a mandate for making certain category purchases within, say, 150 miles of a given store, no matter how remote, these headquarters-based buying organizations would have to decentralize part of their operations, and/or create local buying groups, potentially adding people at the local or Marketing Business Unit (MBU) levels to monitor the process

Mandating local buying also does not suddenly guarantee commissary savings for the patron; in fact, quite the opposite. When local producers know that what was once a voluntary purchase is now a mandate, they are handed a captive buying audience.

Add to that the fact that the provision is unfunded and would therefore draw on resources that are already spread thin.

Another very noble provision but equally resource-intensive is one that allows the Secretary of Defense to donate "Unusable Commissary Store Food and Other Food Prepared for the Armed Forces," to food pantries and soup kitchens, in addition to the food banks already permitted by law, and removes the requirement that only specifically authorized entities are eligible. Anywhere else, this might be a no-brainer, but to expose busy commissary staff to being solicited in the name of the law by any nearby charitable feeding operation could be asking for trouble. It's the commissaries' job to serve the military patron, not the national conscience. They do what they can already; to legislate expanded efforts would be to add more unfunded work.

The provisions seem well-intentioned, but all of them come with a price tag. Military resale's business is to save the military patron money while being responsible stewards of any appropriated funding received. As to how to gauge these "goals" and "guidelines," whether long or short term, the only yardstick really needed to measure them is the one that asks: "Is this right for the servicemembers, retirees and their families?"

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