Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Department of Defense Commissaries
defense icon, source: [West Covina, California] Progressive Management, 2008

Defense: Department of Defense Commissaries

By managing its commissaries more efficiently, the Department of Defense could position itself to better achieve its cost savings target of $2 billion.

Action:

As the Department of Defense (DOD) assesses potential cost savings under the Defense Resale Business Optimization Board or through other cost savings initiatives identified, the Secretary of Defense, with assistance as necessary from the Director and Chief Executive Officer of the Defense Commissary Agency, the Director and Chief Executive Officer of the Army and Air Force Exchange Service, the Chief Executive Officer of the Navy Exchange Service Command, and the Marine Corps Exchange, should develop a plan with assumptions, a methodology, cost estimates, and specific time frames for achieving alternative reductions to appropriations, to support DOD’s efforts to ensure that DOD’s cost savings target is feasible and accurate.

Progress:

As of December 2017, DOD started to take steps to develop plans with assumptions, a methodology, cost estimates, and timelines for achieving alternative reductions in the President’s Fiscal Year 2019 budget, as GAO recommended in November 2016. DOD officials told GAO that they were going to include this information in the President’s budget, but they were unable to provide any documentation of progress made. Given that DOD is in the early stages of implementing these actions, it is unclear to what extent DOD will implement a plan that would support DOD's efforts to ensure that DOD's cost savings target is feasible and accurate.

Implementing Entity:

Department of Defense

Action:

To improve operational efficiencies and reduce costs related to product management and services that support commissary operations, the Secretary of Defense should direct the Chief Executive Officer of the Defense Commissary Agency (DECA) to develop a plan with objectives, goals, and time frames on how it will improve efficiency in product management, such as offering products based on store sales or customer demand.

Progress:

DeCA agreed with GAO’s March 2017 recommendation and as of August 2018 had developed a plan with objectives, goals, and time frames for improving efficiency in product management. The objectives and goals focus on developing a business model that  includes annual metrics for achieving growth targets for sales by product categories. By analyzing sales data, vendor costs, and customer loyalty to specific brands, DeCA expects to be able to identify performance gaps and reduce operating costs to better meet customer demand. For example, DeCA plans to adjust the types and amounts of commissary brand items based on the analysis of product performance and customer demand.  This action should allow DeCA to improve efficiency in product management and help reduce costs.

Implementing Entity:

Department of Defense

Action:

To improve operational efficiencies and reduce costs related to product management and services that support commissary operations, the Secretary of Defense should direct the Chief Executive Officer of the Defense Commissary Agency to conduct comprehensive cost-benefit analyses to guide decisions on implementing the most cost-effective option as stocking and custodial services contracts are renewed, and on choosing product distribution options.

Progress:

No executive action taken. As of December 2017, the Defense Commissary Agency had not taken action to conduct comprehensive cost-benefit analyses to guide decisions on implementing the most cost-effective option as stocking and custodial services contracts are renewed, and on choosing product distribution options, as GAO recommended in March 2017.  

Implementing Entity:

Department of Defense
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    • Brian J. Lepore
    • Director, Defense Capabilities and Management
    • leporeb@gao.gov
    • (202) 512-4523