What the GAO found
The mission of the Defense Commissary Agency (DeCA) is to provide low-cost groceries to service members, their families, and other eligible customers. To meet its mission, DeCA aims to achieve an overall customer savings rate; However, DeCA is unable to provide assurance that it is achieving its target savings rate. GAO found that the savings rate for customers in the Continental United States (CONUS) is consistently below DeCA’s target, and that DeCA only meets its global savings rate target for customers based on the Savings Rate for Commissioners Outside the Continental United States (OCONUS). Additionally, as shown in the figure, DeCA’s methodology for OCONUS customer savings rate is unreliable, as it does not include the required price comparisons based on actual price data. Without analysis to assess the accuracy of the OCONUS methodology, Congressional and DOD policy makers lack assurance that DeCA is achieving its savings goal and that Commissariat clients are reliably receiving the expected benefits.
Defense Commissary Agency (DeCA) Customer Savings Rate Overview
|
Location |
FY21 rate |
Methodology |
|
continental United States |
17.7% |
Reliable |
|
Outside the continental United States |
42.5% |
Not trustworthy |
Source: GAO analysis of DeCA data and methodology. | GAO-22-104728
DeCA strives to achieve two main goals: (1) to be a benefit to service members by providing the target savings rate to its customers, and (2) to operate as a business to reduce its reliance on credit. The GAO found that these goals may be in tension because DeCA did not determine the trade-offs needed to achieve these competing goals and, therefore, did not meet the targets for either goal. In addition, Congress has provided various statutory directives that have led to uncertainty regarding expectations of DeCA, particularly regarding the type and level of benefits DeCA should guarantee it can provide. Until DeCA performs analysis to assess the risks and trade-offs associated with achieving its defined objectives, it will continue to operate without a clear understanding of the results it can reasonably achieve for its clients. Further, without clarity from Congress regarding the level of benefits DeCA should provide, DeCA will be hampered in its ability to operate effectively.
DeCA’s strategic plan lacks key business reform efforts and information needed to implement and measure success. DeCA also lacks comprehensive supporting documentation linking its performance objectives to measurable indicators, milestones or deliverables. DeCA’s strategic plan includes information about its strategic goals, but does not include information about its major business reform efforts, variable pricing and private label efforts, or certain performance information such as metrics. . Without complete information and fully developed measurable goals, DeCA cannot accurately assess and report on its progress towards successfully implementing its trade reforms and whether it is achieving the intended results.
Why GAO Did This Study
Sales of groceries and other DeCA goods have fallen by more than $1 billion over the past 6 years. Since 2016, DeCA has implemented reforms to improve the efficiency of its operations while continuing to deliver savings to its customers. Providing savings to service members may be of particular concern in light of recent food price inflation. Senate Report 116-236 accompanying a bill for the National Defense Authorization Act for fiscal year 2021 included a provision for the GAO to review DeCA’s implementation of business reforms and the effects of these reforms on the savings and credits of DeCA customers.
The GAO assessed the extent to which (1) DeCA can ensure that it achieves its target client savings rate, and DeCA’s business model (2) reflects clearly defined objectives, and (3) the strategic plan includes efforts key business reform initiatives and information to assess performance. The GAO analyzed DeCA’s customer savings rate methodology and compared the results to its target of 23.7%. The GAO also compared margin, credits, and performance data to DeCA targets.
