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1 1 (January 31, 2019)

handle is hein.crs/govydr0001 and id is 1 raw text is: $ ~~~~r Cotrsil R ac evc S January 31, 2019 Defense Primer: Military Commissaries and Exchanges The Department of Defense (DOD) offers certain quality- of-life benefits to military members, their families, and retirees. The general purpose of these benefits is to attract, retain, and support morale and readiness for military servicemembers. One of these benefits is world-wide access to grocery and retail stores - called commissaries and exchanges - typically located on military installations. Commissaries provide subsidized groceries and household goods to eligible patrons. Exchanges sell goods for profit, similar to a department or specialty store, but use the some of these profits to fund various Morale, Welfare and Recreation (MWR) activities (See Table 1.). Organization and Management Defense Commissaries The modern commissary system began in 1867. Each of the services operated its own commissaries and exchanges until 1991 when the commissary system was consolidated under the Defense Commissary Agency (DeCA). Currently, DeCA operates 237 stores worldwide including 178 stateside, with the remainder in 13 countries and 2 U.S. territories. In addition, DeCA Operations include five joint Commissary and Exchange operations (NEXMARTS) located overseas, nine distribution centers, and a meat processing plant located in Germany. As a defense agency, DeCA reports to the Office of the Secretary of Defense and has a board of directors composed of members from each of the military services. DeCA provides subsidized groceries and household goods at cost plus a 5% surcharge. This surcharge is used to fund new commissary construction, and store-level refurbishment, maintenance, and equipment. Military Exchanges DOD maintains an exchange system that includes the Army and Air Force Exchange System (AAFES), the Navy Exchange (NEX), and the Marine Corps Exchange (MCX). Each service has its own board of directors to align operations and services. These exchanges provide military installations with goods and services similar to department stores and are often located near commissaries. Additionally, some exchanges operate gas stations, mini- marts, food courts, barber and beauty shops, and liquor stores, some of which are operated by outside or contract vendors. According to AAFES, 20% to 30% of its foot traffic, representing $1 billion in sales, is attributable to proximity to commissaries. DOD regulates what items may be sold at commissaries and exchanges to comply with statutory requirements (10 U.S.C. §2483) and to avoid direct competition with one another. Table I. Breakdown of Commissaries vs. Exchanges Commissaries Exchanges Funding Appropriated Funds Sales of goods, non- (APF) appropriated (NAF) Management DeCA Board of Board of Directors Directors for each Service exchange system Products Grocery and Clothing, shoes, household goods furniture, alcohol, cigarettes, jewelry, uniforms, computers, etc. Online Sales Limited* Yes** and Delivery Sources: About DeCA and FAQs at https://www.commissaries.com/; and Exchange Quick Facts, at https://www.aafes.com/about-exchange/exchange-quick-facts/. Notes: *Since 2013, DeCA has a pilot program offering online ordering with curbside pickup, known as Click2Go, at three locations: Fort Lee, Virginia, Offutt Air Force Base, Nebraska, and Travis Air Force Base, California. Future locations are expected, however, it is unknown whether DeCA will offer delivery of online orders. **Online delivery excludes cigarettes, alcohol, and military uniforms. Authorized Patrons Authorized patrons of military commissaries and exchanges include active duty, Guard and Reserve members, military retirees, Medal of Honor recipients, 100 percent disabled veterans, and authorized family members. DOD regulations also allow limited access to overseas commissaries to DOD and non-DOD federal civilian employees and contractors. Since November 11, 2017, DOD has allowed limited online exchange shopping privileges to all honorably discharged veterans. Purchases of uniforms, alcohol and tobacco products are excluded. Veterans may verify eligibility at https://www.shopmyexchange.com/veterans The John S. McCain National Defense Authorization Act for FY2019 (P.L. 115-232) includes a provision that is to extend eligibility for commissary and morale, welfare, and recreation (MWR) privileges to certain veterans and veterans' caregivers by January 1, 2020, subject to regulations prescribed by DOD. icrsreports.congress.gos

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