Commissary savings overhaul might cost shoppers extra

A recent overhaul of the defense commissary program aboard military installations will result in higher costs for its customers, according to a recent MilitaryTimes report.

New rules, which were put in place as part of the latest annual defense authorization act allow the defense commissaries, or DeCA, to up the prices on about 1,000 products in 10 stores. Additionally, all 238 commissaries were authorized to raise prices on national brand products.

According to MilitaryTimes, this will allow officials to explore how the overall impact of raising these prices might help them to reduce operating costs that taxpayers cover, which currently sits at about $1.3 billion annually.

Before the rollout of the overhaul, DeCA was able to sell items at the commissaries at cost plus 5 percent. Under the new system, DeCA is able to purchase items at a reduced rate, but sell them at their previous rates or higher.

For example, if DeCA purchases a product at $.10 cheaper than before, it might not sell that product for the reduced price at the commissary, MilitaryTimes explains.

That extra cash might go, instead, toward operating costs or toward lowering the price of a different product, or both.

One of the issues with this new system, according to MilitaryTimes, is that the consulting company who designed it may be benefitting financially. MilitaryTimes claims that “unofficial reports from members of industry” say that Boston Consulting Group (or BCG) stands to make between 50 and 60 percent of the amount prices are reduced.

So that dime savings per sale of a particular item might net BCG between a nickel and 6 cents per unit sold.

DeCA officials are unable to confirm those claims, saying instead that the details of extra awards, fees or incentives for BCG won’t be available until they are “determined at a later date”, MilitaryTimes says.

Chris Burns, the executive director of business transformation at DeCA, told MilitaryTimes that the money DeCA saves is going toward reducing product prices or toward operating costs, but MilitaryTimes could not determine if consulting fees were included in those operating costs.

The effects of the overhaul are being felt elsewhere, as well. Some national brands who are pressured to lower prices below cost are pulling their items from the commissary altogether, MilitaryTimes reports. They claim that “multiple sources” are saying that other programs, like scholarship donations, could be cut.

Some good news does come out of the overhaul, however. DeCA will begin rolling out store brand items later this month that should be cheaper than national name brands.

While Congress approved the Department of Defense’s DeCA program, they are keeping a close eye on it and on whether it actually saves anyone money, MilitaryTimes says.

TOP ARTICLES
This is how the War of Independence was won in the trenches

In order to beat the British at Yorktown, Gen. George Washington had to summon his inner groundhog and convince the French to soil their pretty hands.

This .50 cal machine gun fires twice as fast as the legendary Ma Deuce

The new Gatling-style GAU-19/B can send 1,300 rounds a minute downrange.

This vehicle is bristling with weapons to shoot down Kim Jong-un's aerial menace

Whether the plane is carrying bombs, rockets, missiles, or some of Kim Jong-un's goons, the Hybrid BIHO will make sure they never get through.

That time two luxurious ocean liners fought an intense old-time naval battle

The German ship Cap Trafalgar disguised itself as the HMS Carmania to lure and destroy British merchant ships. Its first victim was the real HMS Carmania.

This is the dummy's guide to the rail gun

Designed to double the muzzle velocity of all naval artillery weapons to hypersonic speeds up to Mach 6, the Navy's rail gun system uses advanced technology that is a pain in the butt to understand

This is what Sikorsky thinks should replace the Blackhawk

The Defiant is fast, it can carry a lot of troops, and it's armed to the teeth.

How one vet learned to actually appreciate his deployment to Iraq

This veteran believes God used the Iraq war to fulfill Biblical prophesies, and he's written a four part series to explain it.

Combat Controller receives Air Force Cross for valor in Afghanistan

Air Force Staff Sgt. Richard Hunter was awarded the Air Force Cross Oct. 17 for actions during an eight-hour firefight in Kunduz Province, Afghanistan.

This is what Iran will do if the US pulls out of the nuke deal

President Trump is threatening to back out of the Iran nuclear deal — in direct opposition of the other five countries involved. Here is what Iran thinks.

5 military movies you should look out for in 2018

These are some of the handful of military-related movies hitting the screens next year that look like they could be worth the price of admission.