10 U.S.C. § 2481 — Defense commissary and exchange sys-

Page 1960 TITLE 10—ARMED FORCES § 2481 substituted ‘‘Commissary stores: release of certain commercially valuable information to the public’’ for ‘‘Commissary stores: limitations on release of sales in- formation’’ in item 2487. 2000—Pub. L. 106–398, § 1 [[div. A], title III, § 331(a)(2)], Oct. 30, 2000, 114 Stat. 1654, 1654A–59, added item 2484 and struck out former item 2484 ‘‘Commissary stores: expenses’’. 1998—Pub. L. 105–261, div. A, title III, § 365(b), title IX, § 906(a)(2), Oct. 17, 1998, 112 Stat. 1987, 2095, added items 2492 and 2493. 1997—Pub. L. 105–85, div. A, title III, § 371(a)(1), (c)(1), Nov. 18, 1997, 111 Stat. 1705, substituted ‘‘COM- MISSARIES AND EXCHANGES AND OTHER MO- RALE, WELFARE, AND RECREATION ACTIVITIES’’ for ‘‘UTILITIES AND SERVICES’’ as chapter heading and struck out items 2481 ‘‘Utilities and services: sale; expansion and extension of systems and facilities’’, 2483 ‘‘Sale of electricity from alternate energy and cogen- eration production facilities’’, and 2490 ‘‘Utility serv- ices: furnishing for certain buildings’’. 1996—Pub. L. 104–201, div. A, title III, §§ 341(a)(2), 343(a)(2), Sept. 23, 1996, 110 Stat. 2489, 2490, added items 2482a and 2489a. Pub. L. 104–106, div. A, title III, §§ 331(b), 336(a)(2), Feb. 10, 1996, 110 Stat. 260, 264, substituted ‘‘Commissary stores: operation’’ for ‘‘Commissary stores: private op- eration’’ in item 2482 and added item 2490a. 1993—Pub. L. 103–160, div. A, title XI, § 1182(a)(8)(B), Nov. 30, 1993, 107 Stat. 1771, struck out item 2490a ‘‘Non- appropriated fund instrumentalities: financial manage- ment and use of nonappropriated funds’’. 1992—Pub. L. 102–484, div. A, title III, §§ 362(b), 364(b)(1), Oct. 23, 1992, 106 Stat. 2380, 2382, substituted ‘‘limitations’’ for ‘‘limitation’’ in item 2487 and added item 2490a. 1990—Pub. L. 101–510, div. A, title III, § 324(b)(2), Nov. 5, 1990, 104 Stat. 1531, amended item 2485 generally, sub- stituting ‘‘Donation of unusable food: commissary stores and other activities’’ for ‘‘Commissary stores: donation of unmarketable food’’. 1988—Pub. L. 100–370, § 1(j)(2), July 19, 1988, 102 Stat. 848, added item 2490. 1987—Pub. L. 100–180, div. A, title III, §§ 311(a)(2), 313(a)(3), Dec. 4, 1987, 101 Stat. 1073, 1074, inserted ‘‘and pricing’’ in item 2486 and added item 2489. 1986—Pub. L. 99–661, div. A, title III, § 313(c), Nov. 14, 1986, 100 Stat. 3853, added items 2486, 2487, and 2488. 1985—Pub. L. 99–145, title XIV, § 1460(b), Nov. 8, 1985, 99 Stat. 765, added item 2485. 1984—Pub. L. 98–525, title XIV, § 1401(i)(2), Oct. 19, 1984, 98 Stat. 2620, added item 2484. Pub. L. 98–407, title VIII, § 810(b), Aug. 28, 1984, 98 Stat. 1523, added item 2483. SUBCHAPTER I—DEFENSE COMMISSARY AND EXCHANGE SYSTEMS Sec. 2481. Defense commissary and exchange systems: existence and purpose. 2482. Commissary stores: criteria for establishment or closure; store size. 2483. Commissary stores: use of appropriated funds to cover operating expenses. 2484. Commissary stores: merchandise that may be sold; uniform surcharges and pricing. 2485. Commissary stores: operation. Editorial Notes AMENDMENTS 2006—Pub. L. 109–364, div. A, title X, § 1071(a)(18), Oct. 17, 2006, 120 Stat. 2399, inserted period at end of item 2481. 2004—Pub. L. 108–375, div. A, title VI, § 651(a)(3), Oct. 28, 2004, 118 Stat. 1964, added subchapter heading and items 2481 to 2485. § 2481. Defense commissary and exchange sys- tems: existence and purpose (a) SEPARATE SYSTEMS.—The Secretary of De- fense shall operate, in the manner provided by this chapter and other provisions of law, a world-wide system of commissary stores and a separate world-wide system of exchange stores. The stores of each system may sell, at reduced prices, food and other merchandise to members of the uniformed services on active duty, mem- bers of the uniformed services entitled to retired pay, dependents of such members, and persons authorized to use the system under chapter 54 of this title. 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 has implemented the requirement under this subsection for a world-wide system of exchange stores. (b) PURPOSE OF SYSTEMS.—The defense com- missary system and the exchange system are in- tended to enhance the quality of life of members of the uniformed services, retired members, and dependents of such members, and to support military readiness, recruitment, and retention. (c) OVERSIGHT.—(1) The Secretary of Defense shall designate a senior official of the Depart- ment of Defense to oversee the operation of both the defense commissary system and the ex- change system. (2) The Secretary of Defense shall establish an executive governing body to provide advice to the senior official designated under paragraph (1) regarding the operation of the defense com- missary and exchange systems and to ensure the complementary operation of the systems. (3)(A) The Secretary of Defense shall develop and implement a comprehensive strategy to op- timize management practices across the defense commissary system and the exchange system that reduce reliance of those systems on appro- priated funding without reducing benefits to the patrons of those systems or the revenue gen- erated by nonappropriated fund entities or in- strumentalities of the Department of Defense for the morale, welfare, and recreation of mem- bers of the armed forces. (B) 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 par- ticipation of the systems in the development and implementation of such practices. (C) If the Secretary determines that the re- duced reliance on appropriated funding pursuant to subparagraph (A) is insufficient to maintain the benefits to the patrons of the defense com- missary system, and if the Secretary converts the defense commissary system to a non- appropriated fund entity or instrumentality pursuant to paragraph (1) of section 2484(j) of this title, the Secretary shall transfer appro- priated funds pursuant to paragraph (2) of such section to ensure the maintenance of such bene- fits. (4) On not less than a quarterly basis, the Sec- retary shall provide to the congressional defense committees a briefing on the defense com- missary system, including— Page 1961 TITLE 10—ARMED FORCES § 2481 (A) an assessment of the savings the system provides patrons; (B) the status of implementing section 2484(i) of this title; (C) the status of implementing section 2484(j) of this title, including whether the sys- tem requires any appropriated funds pursuant to paragraph (2) of such section; (D) the status of carrying out a program for such system to sell private label merchandise; and (E) any other matters the Secretary con- siders appropriate. (d) REDUCED PRICES DEFINED.—In this section, the term ‘‘reduced prices’’ means prices for food and other merchandise determined using the price setting process specified in section 2484 of this title. (Added Pub. L. 108–375, div. A, title VI, § 651(a)(3), Oct. 28, 2004, 118 Stat. 1965; amended Pub. L. 114–328, div. A, title VI, § 661(a), (f), Dec. 23, 2016, 130 Stat. 2169, 2172.) Editorial Notes PRIOR PROVISIONS A prior section 2481, added Pub. L. 108–136, div. A, title VI, § 652(a), Nov. 24, 2003, 117 Stat. 1522, related to the existence of defense commissary system and ex- change stores system, prior to repeal by Pub. L. 108–375, div. A, title VI, § 651(a)(1), Oct. 28, 2004, 118 Stat. 1964. Another prior section 2481 was renumbered section 2686 of this title. AMENDMENTS 2016—Subsec. (a). Pub. L. 114–328, § 661(f), inserted at end ‘‘ Any reference in this chapter to ‘the exchange system’ shall be treated as referring to each separate administrative entity within the Department of De- fense through which the Secretary has implemented the requirement under this subsection for a world-wide system of exchange stores.’’ Subsec. (c)(3), (4). Pub. L. 114–328, § 661(a), added pars. (3) and (4). Statutory Notes and Related Subsidiaries DEFENSE RESALE SYSTEM MATTERS Pub. L. 116–92, div. A, title VI, § 631(a)–(c), Dec. 20, 2019, 133 Stat. 1429, as amended by Pub. L. 118–31, div. A, title IX, § 901(g), Dec. 22, 2023, 137 Stat. 355, provided that: ‘‘(a) IN GENERAL.—The Under Secretary of Defense for Personnel and Readiness shall maintain oversight of business transformation efforts of the defense com- missary system and the exchange stores system in order to ensure the following: ‘‘(1) Development of an intercomponent business strategy that maximizes efficiencies and results in a viable defense resale system in the future. ‘‘(2) Preservation of patron savings and satisfaction from and in the defense commissary system and ex- change stores system. ‘‘(3) Sustainment of financial support of the defense commissary and exchange systems for morale, wel- fare, and recreation (MWR) services of the Armed Forces. ‘‘(b) EXECUTIVE RESALE BOARD ADVICE ON OPERATIONS OF SYSTEMS.—The Executive Resale Board of the De- partment of Defense shall advise the Under Secretary on the implementation of sustainable, complementary operations of the defense commissary system and the exchange stores system. ‘‘(c) INFORMATION TECHNOLOGY MODERNIZATION.—The Secretary of Defense shall, acting through the Under Secretary and with advice from the Executive Resale Board, require the Defense Commissary Agency and the Military Exchange Service to do as follows: ‘‘(1) Field new technologies and best business prac- tices for information technology for the defense re- sale system. ‘‘(2) Implement cutting-edge marketing opportuni- ties across the defense resale system.’’ PLAN TO OBTAIN BUDGET-NEUTRALITY FOR THE DE- FENSE COMMISSARY SYSTEM AND THE MILITARY EX- CHANGE SYSTEM Pub. L. 114–92, div. A, title VI, § 651, Nov. 25, 2015, 129 Stat. 854, provided that: ‘‘(a) IN GENERAL.—Not later than March 1, 2016, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Rep- resentatives a report setting forth a comprehensive plan to achieve by October 1, 2018, budget-neutrality in the delivery of commissary and exchange benefits while meeting the benchmarks set forth in subsection (c). In preparing the report, the Secretary shall consider the report required by section 634 of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authoriza- tion Act for Fiscal Year 2015 (Public Law 113–291; 128 Stat. 3406) and any other previous reports, studies, and surveys of matters appropriate to the report. ‘‘(b) REPORT ELEMENTS.—The report required by sub- section (a) shall include the following: ‘‘(1) A description of any modifications to the com- missary and exchange benefit systems the Secretary considers appropriate to obtain budget-neutrality in the delivery of commissary and exchange benefits, in- cluding the following: ‘‘(A) The establishment of common business proc- esses, practices, and systems to exploit synergies between the operations of defense commissaries and exchanges and to optimize the operations of the re- sale system and the benefits provided by the com- missaries and exchanges. ‘‘(B) The privatization of the defense commissary system and the military exchange system, in whole or in part. ‘‘(C) Engagement of major commercial grocery retailers or other private sector entities to deter- mine their willingness to provide eligible bene- ficiaries with discount savings on grocery products and certain household goods. ‘‘(D) The closure of commissaries in locations in close proximity to other commissaries or in loca- tions where commercial alternatives, through major grocery retailers, may be available. ‘‘(2) An analysis of different pricing constructs to improve or enhance the delivery of commissary and exchange benefits. ‘‘(3) A description of the impact of any modifica- tions described pursuant to paragraph (1) on Morale, Welfare and Recreation (MWR) quality-of-life pro- grams. ‘‘(4) Such recommendations for legislative action as the Secretary considers appropriate to achieve by Oc- tober 1, 2018, budget-neutrality in the delivery of commissary and exchange benefits while meeting the benchmarks set forth in subsection (c). ‘‘(c) BENCHMARKS.—The report required by subsection (a) shall ensure— ‘‘(1) the maintenance of high levels of customer sat- isfaction in the delivery of commissary and exchange benefits; ‘‘(2) the provision of high quality products; and ‘‘(3) the sustainment of discount savings to eligible beneficiaries. ‘‘(d) COMPTROLLER GENERAL ASSESSMENT OF PLAN.— Not later than 120 days after the submittal of the re- port required by subsection (a), the Comptroller Gen- eral of the United States shall submit to the Commit- tees on Armed Services of the Senate and the House of Representatives a report setting forth an assessment by the Comptroller General of the plan to achieve budg- et-neutrality in the delivery of commissary and ex- Page 1962 TITLE 10—ARMED FORCES § 2482 change benefits while meeting the benchmarks set forth in subsection (c) as set forth in the report re- quired by subsection (a). ‘‘(e) PILOT PROGRAMS.— ‘‘(1) PROGRAMS AUTHORIZED.—After the reports re- quired by subsections (a) and (d) have been submitted as described in such subsections, the Secretary may, notwithstanding any requirement in chapter 147 of title 10, United States Code, conduct one or more pilot programs to evaluate the feasibility and advis- ability of processes and methods for achieving budg- et-neutrality in the delivery of commissary and ex- change benefits and other applicable benchmarks in accordance with this section. The Secretary may au- thorize any commissary or exchange, or private sec- tor entity, participating in any such pilot program to establish appropriate prices in response to market conditions and customer demand, provided that the level of savings required by paragraph (3) is main- tained. ‘‘(2) BENCHMARKS.—If the Secretary conducts a pilot program under this subsection, the Secretary shall establish specific, measurable benchmarks for meas- uring 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 under the pilot program. ‘‘(3) REQUIRED SAVINGS TO PATRONS.—The Secretary shall ensure that the level of savings to commissary and exchange patrons under any pilot program under this subsection is not less than the level of savings to such patrons before the implementation of such pilot program, as follows: ‘‘(A) Before commencing a pilot program the Sec- retary shall establish a baseline of savings to pa- trons achieved for each commissary or exchange to participate in such pilot program by comparing prices charged by such commissary or exchange for a representative market basket of goods to prices charged by local competitors for the same market basket of goods. ‘‘(B) After commencement of such pilot program, the Secretary shall ensure that each commissary or exchange, or private sector entity, participating in such pilot program conducts market-basket price comparisons not less than once a month and adjusts pricing as necessary to ensure that pricing achieves savings to patrons under such pilot program that are reasonably consistent with the baseline savings for the commissary or exchange established pursu- ant to subparagraph (A). ‘‘(4) DURATION OF AUTHORITY.—The authority of the Secretary to carry out a pilot program under this subsection shall expire on the date that is five years after the date of the enactment of this Act [Nov. 25, 2015]. However, if a pilot program achieves budget- neutrality in the delivery of commissary and ex- change benefits and other applicable benchmarks, as measured using the benchmarks required by para- graph (2), the Secretary may continue the pilot pro- gram for an additional period of up to five years. ‘‘(5) REPORTS.— ‘‘(A) INITIAL REPORTS.—If the Secretary conducts a pilot program under this subsection, the Sec- retary shall, not later than 30 days before com- mencing the pilot program, submit to the Commit- tees on Armed Services of the Senate and the House of Representatives a report on the pilot program, including 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 in the conduct of the pilot program. ‘‘(B) FINAL REPORTS.—Not later than 90 days after the date of the completion of any pilot program under this subsection or the date of the commence- ment of an extension of a pilot program under para- graph (4), the Secretary shall submit to the Com- mittees on Armed Services of the Senate and the House of Representatives a report on the pilot pro- gram, including 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.’’ § 2482. Commissary stores: criteria for establish- ment or closure; store size (a) PRIMARY CONSIDERATION FOR ESTABLISH- MENT.—The needs of members of the armed forces on active duty and the needs of depend- ents of such members shall be the primary con- sideration whenever the Secretary of Defense— (1) assesses the need to establish a com- missary store; and (2) selects the actual location for the store. (b) STORE SIZE.—In determining the size of a commissary store, the Secretary of Defense shall take into consideration the number of all authorized patrons of the defense commissary system who are likely to use the store. (c) CLOSURE CONSIDERATIONS.—(1) Whenever assessing whether to close a commissary store, the effect of the closure on the quality of life of members and dependents referred to in sub- section (a) who use the store and on the welfare and security of the military community in which the commissary is located shall be a pri- mary consideration. (2) Whenever assessing whether to close a com- missary store, the Secretary of Defense shall also consider the effect of the closure on the quality of life of members of the reserve compo- nents of the armed forces. (d) CONGRESSIONAL NOTIFICATION.—(1) The clo- sure of a commissary store in the United States shall not take effect until the end of the 90-day period beginning on the date on which the Sec- retary of Defense submits to Congress written notice of the reasons supporting the closure. The written notice shall include an assessment of the impact closure will have on the quality of life for military patrons and the welfare and se- curity of the military community in which the commissary is located. (2) Paragraph (1) shall not apply in the case of the closure of a commissary store as part of the closure of a military installation under a base closure law. (Added Pub. L. 108–375, div. A, title VI, § 651(a)(3), Oct. 28, 2004, 118 Stat. 1965; amended Pub. L. 112–81, div. A, title X, § 1064(6), Dec. 31, 2011, 125 Stat. 1587.) Editorial Notes PRIOR PROVISIONS A prior section 2482 was renumbered section 2485 of this title. A prior section 2482a was renumbered section 2492 of this title. AMENDMENTS 2011—Subsec. (d)(1). Pub. L. 112–81 inserted ‘‘in the United States’’ after ‘‘commissary store’’.