[Congressional Record Volume 170, Number 114 (Wednesday, July 10, 2024)]
[Senate]
[Pages S4396-S4397]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2150. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill S. 4638, to authorize appropriations for fiscal year 
2025 for military activities of the Department of Defense, for military 
construction, and for defense activities of the Department of Energy, 
to prescribe military personnel strengths for such fiscal year, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place in title VI, insert the following:

     SEC. 6__. PILOT PROGRAMS TO ASSESS FEASIBILITY OF BUDGET-
                   NEUTRALITY FOR DEFENSE COMMISSARY SYSTEM WITH 
                   IMPROVED SERVICE.

       (a) Findings.--Congress makes the following findings:
       (1) The commissary benefit is no longer meeting its 
     original intent in serving families of members of the Armed 
     Forces stationed in austere locations. With commercial 
     grocery stores now located outside every military 
     installation in the continental United States and potentially 
     able to operate commissaries on those installations 
     efficiently without an annual subsidy, providing subsidies 
     for the operation of commissaries may no longer be necessary.
       (2) Congress is aware that to keep costs low for commissary 
     customers amid declining year-to-year sales, the Federal 
     Government subsidizes commissaries with taxpayer funds. In 
     2023, the Defense Commissary Agency received $1,400,000,000 
     in appropriations, and the President's fiscal year 2025 
     budget request increases that to $1,570,200,000, despite the 
     funding level constraints imposed by the Fiscal 
     Responsibility Act of 2023 (Public Law 118-5; 137 Stat. 10).
       (3) Additionally, supply chain challenges, minimal market 
     share, and availability of better alternatives near most 
     commissary locations are limiting selections, increasing 
     costs, and decreasing patronage at commissaries. Members of 
     the Armed Forces and their families should have affordable 
     access to American-style goods while they are stationed in 
     foreign and remote areas, but reports indicate the shelves 
     are bare in places like Camp Humphreys, South Korea, and 
     costs are higher than they would be for commercial grocery 
     stores. Unlike commercial grocery chains, the costs to supply 
     the Defense Commissary Agency are higher than the costs to 
     supply commercial grocery chains because the Defense 
     Commissary Agency does not have direct control over its 
     supply chain and commissary goods are bought through multiple 
     independent brokers who add their own fees to the cost of 
     products they sell to the commissaries, which raises the 
     costs of the goods. The broker markup can run as much as 30 
     to 40 percent more than the actual cost of an item. In 
     addition, since the volume of sales at commissaries is 
     relatively small, they do not have the buying power to bring 
     the volume discounts that the major supermarket chains get. 
     Additional broken costs are part of the supply chain 
     inefficiencies that make the Defense Commissary Agency 
     uncompetitive with civilian sector options. The purchasing 
     power of commercial grocers could significantly lower the 
     cost of goods because the leverage those grocers have to 
     obtain quantity discounts offered by suppliers.
       (4) While the commissary benefit is designed to save 
     shoppers more than 25 cents on the dollar over other 
     retailers' prices every time they shop, a Government 
     Accountability Office report in June 2022 determined that the 
     Defense Commissary Agency used unreliable and inconsistent 
     methodologies to calculate the annual savings realized by 
     commissary shoppers, resulting in inflated savings. Other 
     reports indicate commissaries sales declined 26 percent from 
     2015 to 2020, while Nielsen Company retail data demonstrated 
     that private sector retail grocery sales increased 16.60 
     percent for 2020 alone. From 2019 to 2022, sales at many 
     private sector retail grocery stores were up 51 percent while 
     commissary sales were down 13 percent during the same period. 
     Finally, off-base shopping currently offers options and 
     conveniences not available at commissaries, such as same-day 
     home delivery and extended shopping hours.
       (b) Pilot Programs.--
       (1) In general.--The Secretary of Defense shall conduct one 
     or more pilot programs to evaluate the feasibility and 
     advisability of processes and methods for achieving budget 
     neutrality in the delivery of commissary and exchange 
     benefits and meeting other applicable benchmarks in 
     accordance with this subsection.
       (2) Establishment of prices.--The Secretary shall require 
     any commissary or private sector entity participating in a 
     pilot program carried out under paragraph (1) to establish 
     appropriate prices in response to market conditions and 
     customer demand, provided that the level of savings required 
     by paragraph (4) is maintained.
       (3) Establishment of benchmarks.--
       (A) In general.--In carrying out pilot programs under 
     paragraph (1), the Secretary shall, with review by the 
     Government Accountability Office, the Nielsen Company, and an 
     independent accounting firm, establish specific, measurable 
     benchmarks for measuring success in the provision of high-
     quality grocery goods and products, discount savings to 
     patrons, and high levels of customer satisfaction while 
     achieving budget-neutrality in the delivery of commissary and 
     exchange benefits.
       (B) Use of ups codes.--In establishing the benchmarks 
     required by subparagraph (A), the Secretary shall ensure that 
     the market basket of goods use for purposes of the benchmarks 
     consists of goods with Universal Product Codes so that 
     identical goods sold by various different retailers can be 
     identified and tracked.

[[Page S4397]]

       (C) Audits.--The baseline of savings for purposes of the 
     benchmarks required by subparagraph (A) shall be audited by 
     the Government Accountability Office, the Nielsen Company, 
     and an independent accounting firm.
       (4) Required savings to patrons.--
       (A) In general.--The Secretary shall ensure that the level 
     of savings for commissary patrons under any pilot program 
     carried out under paragraph (1) is not less than the level of 
     savings for such patrons before the implementation of the 
     pilot program, as follows:
       (i) Before commencing a pilot program under paragraph (1), 
     the Secretary shall establish a baseline of savings for 
     patrons at each commissary participating in the pilot program 
     by comparing prices charged by the commissary for a 
     representative market basket of goods to prices charged by 
     local competitors for the same market basket of goods.
       (ii) After implementing a pilot program under paragraph 
     (1), the Secretary shall ensure that each commissary or 
     private sector entity participating in the pilot program--

       (I) conducts market-basket price comparisons not less 
     frequently than once a month; and
       (II) adjusts pricing as necessary to ensure that pricing 
     achieves savings for patrons that are reasonably consistent 
     with the baseline savings for the commissary established 
     pursuant to clause (i).

       (B) Verification.--The Secretary shall arrange to have the 
     baseline of savings established under clause (i) of 
     subparagraph (A) and the price comparisons and adjustments 
     required by clause (ii) of that subparagraph validated by the 
     Government Accountability Office, the Nielsen Company, and an 
     independent accounting firm.
       (5) Waiver of certain requirements.--In carrying out a 
     pilot program under paragraph (1), the Secretary may waive 
     any requirement of chapter 147 of title 10, United States 
     Code, that the Secretary determines necessary.
       (6) Duration of authority.--
       (A) In general.--Except as provided by subparagraph (B), 
     the authority of the Secretary to carry out a pilot program 
     under paragraph (1) shall expire on the date that is five 
     years after the date of the enactment of this Act.
       (B) Extension.--If a pilot program carried out under 
     paragraph (1) achieves budget-neutrality in the delivery of 
     commissary and exchange benefits and meets other applicable 
     benchmarks, as measured using the benchmarks required by 
     paragraph (3), the Secretary may continue the pilot program 
     for an additional period of not more than 10 years after the 
     date described in subparagraph (A).
       (7) Reports required.--
       (A) Initial reports.--Not later than 30 days before 
     commencing a pilot program under paragraph (1), the Secretary 
     shall submit to the Committees on Armed Services of the 
     Senate and the House of Representatives a report on the pilot 
     program that includes the following:
       (i) A description of the pilot program.
       (ii) The provisions, if any, of chapter 147 of title 10, 
     United States Code, that will be waived to carry out the 
     pilot program.
       (B) Final reports.--Not later than 90 days after the date 
     of the completion of any pilot program carried out under 
     paragraph (1) or the date of the commencement of an extension 
     of a pilot program under paragraph (6)(B), the Secretary 
     shall submit to the Committees on Armed Services of the 
     Senate and the House of Representatives a report on the pilot 
     program that includes the following:
       (i) A description and assessment of the pilot program.
       (ii) Such recommendations for administrative or legislative 
     action as the Secretary considers appropriate in light of the 
     pilot program.
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