Sec. 901. Protection and enhancement of access to and savings at commissaries and exchanges
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Section 2481(c) of title 10, United States Code, is amended by adding at the end the following paragraph: The Secretary of Defense shall develop and implement a comprehensive strategy to optimize management practices across the defense commissary system and the exchange system that reduce reliance of those systems on appropriated funding without reducing benefits to the patrons of those systems or the revenue generated by nonappropriated fund entities or instrumentalities of the Department of Defense for the morale, welfare, and recreation of members of the armed forces.
The Secretary shall ensure that savings generated due to such optimization practices are shared by the defense commissary system and the exchange system through contracts or agreements that appropriately reflect the participation of the systems in the development and implementation of such practices. . Section 2483(c) of such title is amended by adding at the end the following new sentence: Such appropriated amounts may also be supplemented with additional funds derived from improved management practices implemented pursuant to sections 2481(c)(3) and 2487(c) of this title and the alternative pricing program implemented pursuant to section 2484(i) of this title. .
Section 2484 of such title is amended by adding at the end the following new subsections: The Secretary is authorized to establish an alternative pricing program pursuant to which prices may be established in response to market conditions and customer demand, in accordance with the requirements of this subsection. Notwithstanding the amount of the uniform surcharge assessed in subsection (d), the Secretary may provide for an alternative surcharge of not more than 5 percent of sales proceeds under such alternative pricing program to be made available for the purposes specified in subsection (h).
Before establishing an alternative pricing program under this subsection, the Secretary shall establish the following: Specific, measurable benchmarks for success in the provision of high quality grocery merchandise, discount savings to patrons, and levels of customer satisfaction while achieving savings for the Department of Defense. A baseline of overall savings to patrons achieved by commissary stores prior to the initiation of the alternative pricing program, based on a comparison of prices charged by those stores on a regional basis with prices charged by relevant local competitors for a representative market basket of goods.
The Secretary shall ensure that the defense commissary system implements the alternative pricing program by conducting price comparisons using the methodology established for paragraph (2)(B) and adjusting pricing as necessary to ensure that pricing in the alternative pricing program achieves overall savings to patrons that are reasonably consistent with the baseline savings established for the relevant region pursuant to such paragraph. If the Secretary determines that the alternative pricing program has met the benchmarks for success established pursuant to subsection (i)(2)(A) and the savings requirements established pursuant to subsection (i)(3) over a period of at least six months, the Secretary may convert the defense commissary system to a nonappropriated fund entity or instrumentality, with operating expenses financed in whole or in part by receipts from the sale of products and the sale of services.
Upon such conversion, appropriated funds shall be transferred to the defense commissary system only in accordance with paragraph
(2)or section 2491 of this title. The requirements of section 2483 shall not apply to the defense commissary system operating as a nonappropriated fund entity or instrumentality. If the Secretary determines that the defense commissary system operating as a nonappropriated fund entity or instrumentality is likely to incur a loss in any fiscal year as a result of compliance with the savings requirement established in subsection (i), the Secretary shall authorize a transfer of appropriated funds available for such purpose to the commissary system in an amount sufficient to offset the anticipated loss. Any funds so transferred shall be considered to be nonappropriated funds for such purpose. The Secretary of Defense may identify positions of employees in the defense commissary system who are paid with appropriated funds whose status may be converted to the status of an employee of a nonappropriated fund entity or instrumentality. The status and conversion of such employees shall be addressed as provided in section 2491(c) for employees in morale, welfare, and recreation programs. No individual who is an employee of the defense commissary system as of the date of the enactment of this subsection shall suffer any loss of or decrease in pay as a result of the conversion. . Section 2487 of such title is amended— by redesignating subsection
(c)as subsection (d); and by inserting after subsection
(b)the following new subsection (c): Notwithstanding subsections
(a)and (b), the Secretary of Defense may establish common business processes, practices, and systems— to exploit synergies between the operations of the defense commissary system and the exchange system; and to optimize the operations of the defense retail systems as a whole and the benefits provided by the commissaries and exchanges. The Secretary may authorize the defense commissary system and the exchange system to enter into contracts or other agreements— for products and services that are shared by the defense commissary system and the exchange system; and for the acquisition of supplies, resale goods, and services on behalf of both the defense commissary system and the exchange system. For the purpose of a contract or agreement authorized under paragraph (2), the Secretary may— use funds appropriated pursuant to section 2483 of this title to reimburse a nonappropriated fund entity or instrumentality for the portion of the cost of a contract or agreement entered by the nonappropriated fund entity or instrumentality that is attributable to the defense commissary system; and authorize the defense commissary system to accept reimbursement from a nonappropriated fund entity or instrumentality for the portion of the cost of a contract or agreement entered by the defense commissary system that is attributable to the nonappropriated fund entity or instrumentality. . the exchange system Section 2481(a) of title 10, United States Code, is amended by adding at the end the following new sentence: Any reference in this chapter to . the exchange system shall be treated as referring to each separate administrative entity within the Department of Defense through which the Secretary of Defense has implemented the requirement under this subsection for a world-wide system of exchange stores. In the event that the defense commissary system is converted to a nonappropriated fund entity or instrumentality as authorized by section 2484(j)(1) of title 10, United States Code, as added by subsection
(c)of this section, the Secretary may— provide for the transfer of commissary assets, including inventory and available funds, to the nonappropriated fund entity or instrumentality; and ensure that revenues accruing to the defense commissary system are appropriately credited to the nonappropriated fund entity or instrumentality. Section 2643(b) of such title is amended by adding at the end the following new sentence: Such appropriated funds may be supplemented with additional funds derived from improved management practices implemented pursuant to sections 2481(c)(3) and 2487(c) of this title.