DoD drops plan to give exchange shopping benefits to more than a half million DoD civilians


A proposal to give military exchange shopping privileges to more than a half million Department of Defense civilians is dead, according to defense officials.

“DoD is not pursuing military exchange access for DoD civilian employees at this time,” said DoD spokeswoman Lisa Lawrence, in response to a question from Military Times. She had no comment about why the proposal has been dropped.

This is a reversal in direction for DoD since October, when an official said the proposal to give exchange shopping privileges to DoD civilians was working its way through the final stages of the approval process.

At that time, the official said it would probably be after Election Day before the initiative got final approval. It was expected to bring in about 575,000 new eligible customers into exchanges, said Berry Patrick, who works in the DoD Office of Morale, Welfare and Recreation and Nonappropriated Fund Policy, during an Oct. 20 virtual conference of the American Logistics Association.

There are about 796,000 DoD civilians in the U.S., but about 221,000 of those employees already have exchange benefits resulting from another beneficiary category such as retiree or military spouse, he said. The new benefit would have applied to both appropriated fund and nonappropriated fund employees, he said. The shopping benefit would have applied only for exchanges, not commissaries. DoD civilians stationed outside the U.S. have exchange shopping privileges.

Nicole Russell, government relations deputy director for the National Military Family Association, said the organization is aware of the differing opinions surrounding the proposal, while acknowledging that NMFA represents the interests of military families, not DoD civilians.

Some active duty members and family members contend that the benefit was not intended for DoD civilians, she noted. Commissaries and exchanges exist primarily for active duty service members and their families.

However, there’s an argument that expanding the shopping base to include DoD civilians would also bring more sales revenue to the military exchanges, providing more money for morale, welfare and recreation programs on installations. Part of the profits from the military exchanges goes back to the service branches for MWR programs, and exchanges and MWR programs have been hit hard by the pandemic.

“Any move or policy change that would increase revenue for exchanges, thereby increasing the funding available for MWR is positive for our military families,” she said.

DoD civilians are on the base every day, DoD’s Patrick noted in October. Based on projections of the civilians’ buying patterns, he said, DoD estimated exchange sales could increase by about $287 million a year, with a potential increase of $48 million in profits going back to support the services’ MWR programs. DoD has been deliberating the policy change for about three years.

The American Logistics Association will continue to pursue expanding shopping privileges to DoD civilians, said Steve Rossetti, president of the association, which represents businesses that sell to commissaries, exchanges and retail MWR activities. “The stores have sufficient capacity and would provide a great convenience and source of vital products for these DoD civilians, especially critical during the pandemic,” he said.

“Civilians work side by side with their military counterparts, making huge contributions in service to the nation,” he said. “For exchanges, civilian patronage would increase contributions to vital on-base MWR programs that have suffered huge financial losses due to the loss of traffic during the pandemic.”

The American Federation of Government Employees had no comment on DoD’s move to drop the proposal.

One indicator of the popularity of the benefit among DoD employees was the situation in March as the pandemic hit, when DoD gave base commanders temporary authority to give commissary and exchange privileges to DoD civilians and contractor employees considered mission critical. Many people misinterpreted that to mean that every DoD mission-critical civilian employee automatically got those privileges, and DoD officials were getting phone calls from those potential customers, Patrick said.

But it was up to each installation, and some commanders gave the privileges while others didn’t, for various reasons such as concern about the strains on the supply chain’s ability to provide enough products for the stores during the pandemic.

In May, 2019, officials in the Department of Homeland Security took a step for its civilian employees similar to the proposal that DoD has rejected, giving access to all Coast Guard exchanges to the more than 200,000 civilian employees in all DHS agencies.





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