Defense Department officials have told Congress they conditionally support opening on-base shopping to disabled veterans, Purple Heart recipients and caregivers of severely injured veterans — changes that would add at least a few hundred thousand weekly shoppers to commissaries and exchanges nationwide.
The initiative, which is gaining political steam, is in the House-passed version of the fiscal 2019 defense authorization. Proponents argue it would reward deserving veterans who live near military bases with shopper discounts, and strengthen a beleaguered military resale system.
Commissaries in particular are seen as in trouble after 50 consecutive months of declining sales and pressure mounting to reduce the $1.3 billion annual appropriation needed to sustain grocery discounts on base.
At the direction of Congress, the department completed a study in December on the feasibility of expanding access to limited base shopping to veterans with VA disability ratings of 30 percent or higher and to Purple Heart recipients. The expanded shopping benefit is described as “limited” because it would exclude on-base purchases of alcohol and tobacco products and of military uniform items.
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The study concluded it is feasible to open base stores to these veterans if Congress also granted authority to assess these “secondary” patrons an additional 5 percent user fee at commissaries to offset higher operating costs tied to the move.
The study found no need to apply, as Congress suggested, a 30 percent rating threshold on shopping privileges. Base stores could be opened to any veteran with a disability rating from zero to 90 percent, the department concluded. Veterans rated 100 percent disabled already can shop on base.
To gain access to bases, these secondary groups of shoppers could use their Department of Veterans Affairs-issued Veterans Health Identification Card (VHIC), which identifies the holder as having a service-connected disability, the report said. The Defense Department’s electronic physical access control system, to be completed by September 2019, will accept the identification card to enable streamlined access to bases and shopper discounts.
The department said it previously opposed extending shopping privileges to more large patron groups but circumstances have changed, the study said. It cited the military’s shift to a blended retirement system, “significant changes in the commercial grocery and retail industries” and the need to cut appropriated fund support “for the Defense resale ecosystem.”
The department now “recognizes that a large influx of new patrons is necessary to continue efficiently providing commissary and exchange benefits into the future. Similar to the (new) retirement option, offering lifetime commissary and exchange benefits to veterans will help attract younger generations to military service.”
The department even will consider opening bases to all honorably-discharged veterans if:
▪ Expansion to disabled vets shows further expansion would help the department.
▪ Planned consolidation of exchanges and commissaries would create capacity to handle more shoppers.
▪ Secure, cost-effective credentialing is doable for all veterans.
▪ Base security and stores can handle an even greater influx of shoppers.
Armed with the department study, U.S. Rep. Daniel Lipinski (D-Ill.) reintroduced in April the Purple Heart and Disabled Veterans Equal Access Act of 2018. It would allow access to base stores and other morale, welfare and recreation facilities to any veteran with service-connected disabilities, Purple Heart and Medal of Honor recipients, former prisoners of war and veteran caregivers.
Through a floor amendment, that language was made part of the House-version of the fiscal 2019 defense authorization bill (HR 5515).
In late June, Stephanie Barna, special assistant to the undersecretary of defense for personnel and readiness, told a meeting of the American Logistics Association that the department supports the House-passed provision if Congress allows a 5 percent user fee on these “secondary” groups of store patrons, as called for in the department’s study.
Lipinski, in a phone interview, said that’s acceptable to him
The Senate’s defense bill is silent on allowing more veterans to shop on base. With a House-Senate conference committee formed to negotiate away differences in separate versions of the bill, Lipinski wrote a June 21 letter to the chairmen and ranking members of the Armed Services committees, urging acceptance of the House language to award base access and shopping discounts to these groups.
“It is our duty as a nation to not only say we appreciate their service but also to enact policies demonstrating that gratitude," Lipinski wrote. "We should all agree that these veterans have done more than enough to earn access to these facilities. But not only would this provision make the lives of our veterans easier, it would also strengthen the commissary and exchange system by improving operational efficiency as well.”
Lipinski advised that his initiative is backed by “numerous veteran service organizations including the American Legion, AMVETS, Association of the U.S. Navy, Disabled American Veterans, Military Order of the Purple Heart, Veterans of Foreign Wars, and the Wounded Warrior Project.”
What about military associations, which have a different constituency than do veterans’ groups, I asked the congressman.
“We’ve gotten some mixed feedback from The Military Coalition,” he said, referring to a league of 34 military associations and veteran groups. “There are some concerns about bringing more people (into base stores). But my view is … there has been such drop off” in commissary sales that to keep them open “they have to have more patrons.”
Despite some expressions of concern, Lipinski said he knows of no military association that opposes his proposed expansion of on-base shoppers. Indeed, a check of some prominent ones — the National Military Family Association, Military Officers Association of American and the Retired Enlisted Association — verified their support.
Lipinski said he is confident that base security and stores can adjust to handle a new wave of shoppers, most of them disabled veterans who live near base. The study estimated that up to 3 million veterans not already eligible to shop on base have disability ratings of zero to 90 percent. Only 184,000 of them, however, reside close enough to a military base to shop there routinely.
The department estimates that 80 percent of newly eligible patrons would seek an identification card to be able to shop on base, increasing military costs modestly. The argument that more shoppers will mean more profits, however, doesn’t apply yet to commissaries, which still rely on that annual appropriation to provide grocery items at significant cost savings to patrons.
“Although the Defense Commissary Agency is implementing best business practices, such as variable pricing and introducing private label items to realize a margin, it is required to retain the same overall average customer savings percentage,” a spokesman said.
The goal is for commissary profits gradually to reduce the need for taxpayer support. For now, commissaries aren’t a for-profit business.
Sales could rise by opening stores to honorably discharged veterans but so would “costs to sell items to the new patrons,” the spokesman said. And the higher costs are “not expected to be offset by the incremental (profit) margin gained from those sales, nor would that margin reduce the current level of appropriated funding as it was intended.”
That’s why Congress shouldn’t expand access to base grocery stores unless it also authorizes a 5 percent user fee for the “new and secondary” shoppers in addition to the 5 percent already charged all shoppers at checkout to support store modernization.
Exchanges, on the other hand, already generate profits that are used to fund on-base morale, welfare and recreational activities. Allowing disabled veterans to shop on base should increase exchange profits by $45 million annually, the department report said.