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entitled 'Defense Infrastructure: Personnel Reductions Have Not 
Hampered Most Commissaries' Store Operations and Customer Service' 
which was released on March 06, 2003.



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Report to the Senate and House Committees on Armed Services and 

Subcommittees on Defense, Senate and House Committees on 

Appropriations:



United States General Accounting Office:



GAO:



March 2003:



DEFENSE INFRASTRUCTURE:



Personnel Reductions Have Not Hampered Most Commissaries’ Store 

Operations and Customer Service:



Defense Infrastructure:



GAO-03-417:



GAO Highlights:



Highlights of GAO-03-417, a report to Senate and House Committees on 

Armed Services and Subcommittees on Defense, Senate and House 

Committees on Appropriations



Why GAO Did This Study:



In response to concerns about the impact of proposed cuts in the 

Defense Commissary Agency’s workforce, the House Armed Services 

Committee placed in its report on the Bob Stump National Defense 

Authorization Act for Fiscal Year 2003 a requirement that we evaluate 

the effect of the personnel reductions. Specifically, we assessed (1) 

the status of personnel reductions and how they have affected store 

operations and customer service, and (2) whether the agency uses a 

reliable methodology to measure customer satisfaction with its 

commissaries.



What GAO Found:



The Defense Commissary Agency’s commissary operations and customer 

services have been maintained at the same level, and in some cases 

improved, despite the recent reductions in workforce. As of 

December 31, 2002, the agency had completed most of its 3,047 planned 

personnel reductions in full-time positions. It accomplished this 

primarily by achieving efficiencies or eliminating vacant positions 

in the stores. Only 122 employees have been separated and 341 retired 

as a result of the personnel cutbacks. A major focus of DeCA’s 

personnel reductions, as outlined in its strategic plan, was to 

reshape the workforce and develop a more efficient organization. 

We found that commissaries are making greater use of part-time 

employees because of the reductions. This has allowed some stores 

to increase their operating hours to better meet customer needs. 

It has also given store managers more flexibility in meeting 

workload fluctuations. However, DeCA’s strategic plan does not 

include specific goals for achieving a certain full-time/part-

time workforce mix in stores. As a result, the planned 

percentage of part-time positions varies widely by store. 

A recent customer satisfaction survey showed that commissary 

patrons expressed high satisfaction with their overall shopping 

experience, as well as with such key indicators as time waiting 

in line and convenient hours. However, the managers of the smaller 

commissaries reported concerns over balancing workload and 

maintaining store 

operations. We found that the Commissary Customer Satisfaction 

Survey methodology is reasonable. However, some improvements in the 

analysis of survey data could ensure that the findings are more 

complete and consistent. Such changes could include adjusting survey 

results for the volume of sales at individual stores or for the 

number of shoppers who refuse to fill out the questionnaire. 

Furthermore, the current survey does not collect information on the 

number of, and reasons why, potential customers do not shop at their 

local commissaries.



What GAO Recommends:



We are recommending that the Under Secretary of Defense (Personnel and 

Readiness) require the Director of the Defense Commissary Agency to: 

(1) update the agency’s strategic plan to include goals that identify 

the percentage of the store workforce that is expected to be full- and 

part-time, (2) reassess management staffing for small stores, (3) 

adjust customer survey results on the basis of a store’s sales volume, 

(4) collect data on customers who refuse to fill out survey forms, 

and (5) examine potential survey methods to periodically determine how 

many potential customers do not shop at commissaries and the reasons 

why not. The Department of Defense agreed with four of our five 

recommendations. It disagreed with the recommendation to identify 

goals for the projected workforce mix.



www.gao.gov/cgi-bin/getrpt?GAO-03-417. To view the full report, 

including the scope and methodology, click on the link above. For 

more information, contact Barry Holman at (202) 512-8412 or 

holmanb@gao.gov.



Contents:



Letter:



Results in Brief:



Background:



Personnel Reductions Have Not Hampered Most Commissaries’ Store 

Operations or Customer Satisfaction:



Customer Satisfaction Survey Methodology Is Reasonable, but Analysis 

Could Be Improved:



Conclusions:



Recommendations for Executive Action:



Agency Comments and Our Evaluation:



Scope and Methodology:



Appendix I: Commissary Customer Service Survey Questionnaire:



Appendix II: Comments from the Department of Defense:



Tables:



Table 1: Planned Personnel Reductions by Organizational Level:



Table 2: Planned Personnel Reductions at Store Level, by Method:



Table 3: Range of Percentages of Part-time Positions Planned by Stores, 

by Region and by Store Band at the End of Fiscal Year 2003:



Table 4: Customer Satisfaction Scores on Recent Surveys, for Product 

and Service Categories:



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United States General Accounting Office:



Washington, DC 20548:



March 6, 2003:



Congressional Requesters:



In January 2001, the Defense Commissary Agency (DeCA), which operates 

276 stores in the United States and abroad for military personnel and 

retirees, issued a strategic plan that outlined initiatives to reduce 

its unit operating costs by 7 percent by fiscal year 2004. A major 

focus of the unit cost reduction objective was to reshape the workforce 

by reducing full-time positions and developing a more efficient 

organization. This plan called for the elimination of over 3,000 full-

time positions--about 2,700 in stores through efficiencies, closures, 

and contracting out some functions and about 350 through efficiencies 

in the regional offices and headquarters.[Footnote 1] The agency 

expects these actions to save about $82 million without any loss of 

service to its customers.[Footnote 2] As a result of these savings, 

DeCA reduced its fiscal year 2003 budget request.



In response to a requirement in the Committee on Armed Services House 

of Representatives’ report accompanying the Bob Stump National Defense 

Authorization Act for Fiscal Year 2003, we reviewed DeCA’s plan to 

reduce personnel.[Footnote 3] Our objectives were to assess (1) the 

status of personnel reductions and their effect on store operations and 

customer service, and (2) whether the agency uses a reasonable 

methodology to measure customer satisfaction.



Results in Brief:



DeCA’s store operations and customer service have been maintained 

and in some cases improved despite the personnel reductions. As of 

December 31, 2002, DeCA had eliminated 2,602, or 85 percent, of the 

planned 3,047 full-time positions, mostly at the stores by implementing 

new staffing standards or eliminating vacant positions; very few of 

these employees have been separated from the agency by a reduction in 

force. We found that greater use of part-time employees, as a result of 

the reductions, has provided store directors with flexibility to meet 

workload fluctuations and enabled some stores to increase their 

operating hours to meet customer needs. However, DeCA’s strategic plan, 

which addresses its force downsizing and reshaping initiatives, does 

not include specific goals for achieving a certain full-time/part-time 

workforce mix in stores. As a result, the planned percentage of part-

time positions varies widely by individual store and region. The 

November 2002 Commissary Customer Service Survey showed scores stayed 

the same or increased slightly compared to the past two surveys for 

overall high customer satisfaction, and for such key indicators as time 

waiting in line and convenient hours. However, managers of some small 

stores are having difficulty balancing their workloads as a result of 

the reductions in management positions. DeCA officials are aware of but 

have not yet identified a plan to address the small store management 

issue.



DeCA’s Commissary Customer Service Survey methodology is a reasonable 

approach to collect customer feedback. It adheres to standard 

questionnaire design standards and seeks to survey shoppers in an 

unbiased manner. However, some improvements in the analysis of the 

survey data could be made to ensure that results are more precise and 

consistent. For example, the agency does not explicitly adjust survey 

results for actual store sales volumes or document the number of 

shoppers who refuse to complete the survey questionnaire. Because these 

factors are not considered, overall survey results could be distorted 

to some degree. Furthermore, the current survey does not collect 

information on the number of and reasons why, potential customers do 

not shop at a commissary.



We are making recommendations to the Under Secretary of Defense 

(Personnel and Readiness) to help DeCA achieve its strategic objective 

of reshaping the workforce as well as improve its customer satisfaction 

survey process. In comments on a draft of this report, the Department 

of Defense agreed with four of our five recommendations. It disagreed 

with our recommendation that the Under Secretary direct the Director, 

Defense Commissary Agency, to update its strategic plan to include 

goals that identify the percent of store workforce that is expected to 

be full-and part-time.



Background:



DeCA, headquartered at Fort Lee, Virginia, is the Department of 

Defense’s designated agency for managing commissaries on a worldwide 

basis. A Commissary Operating Board, which is comprised of 

representatives from each of the military services, has day-to-day 

operational oversight responsibilities for DeCA. The Under Secretary of 

Defense (Personnel and Readiness) exercises overall supervision of the 

commissary system. DeCA operates four regional offices that oversee the 

management of its commissaries. Commissaries are located in 46 states 

and 14 foreign countries. As of November 7, 2002, the agency had 

276 stores and more than 16,000 employees under its purview. Its annual 

sales in fiscal year 2002 amounted to about $5 billion.



In meeting its mission of providing groceries at a savings to the 

customer, in the most efficient and effective manner possible, DeCA 

strives to provide the lowest cost possible, charging patrons only for 

the cost of goods plus a 5-percent surcharge.[Footnote 4] DeCA receives 

about $1 billion in direct appropriations from Congress for its annual 

operating costs. These funds pay for employees’ salaries, 

transportation, some above-store-level information technology, and 

other expenses. DeCA also operates a resale stock fund for the purchase 

and sale of products. To the extent that savings in operating costs 

occur, they reduce the need for appropriated funds. The savings in 

store operating costs do not have an effect on the cost of merchandise 

sold to customers.



In January 2001, DeCA issued its current strategic plan. This plan 

included objectives to reduce unit operating costs and reshape the 

workforce while maintaining or improving customer service and 

satisfaction. A major focus of the unit cost reduction objective was to 

reduce positions as well as streamline operations and develop a more 

efficient organization. To reshape the workforce, DeCA planned to 

determine the appropriate mix of skills and expertise and the 

appropriate level of part-time employees to carry out the reductions to 

reach a more efficient organization.



DeCA conducts a biannual Commissary Customer Service Survey to 

assess customer views of products and services.[Footnote 5] A team 

appointed by each store director administers the survey. Customers are 

systematically selected while waiting in checkout lines. A 

predetermined number of questionnaires are collected during three 

periods (morning, midday, and evening) each day for 10 consecutive days 

during May and November each year. The survey questions are multiple 

choice with space available for written comments. See appendix I for a 

copy of the questionnaire. The completed forms are mailed to DeCA 

headquarters for analysis, and customer service scores are calculated 

for DeCA overall and for each region and store.



Personnel Reductions Have Not Hampered Most Commissaries’ Store 

Operations or Customer Satisfaction:



Despite the workforce reductions, store operations and customer service 

have been maintained at the same level, and in some cases improved. 

DeCA has used various measures to eliminate 2,602 full-time positions, 

or 85 percent of the planned reductions as of December 31, 2002; very 

few employees have been separated from the agency. While downsizing and 

reshaping were occurring, regional officials stated that they 

encouraged store directors to use part-time positions to maintain store 

operations. DeCA officials stated the use of part-time employees has 

enabled store directors to better manage workload fluctuations, expand 

hours of operation, and thereby improve customer service. However, 

because DeCA’s strategic plan does not include specific goals for 

achieving a certain full-time/part-time workforce mix in stores, the 

planned percentage of part-time positions varies widely by individual 

store and region. Despite personnel reductions, scores for the customer 

satisfaction surveys completed since DeCA began the personnel 

reductions show the same or slightly increasing levels of customer 

satisfaction with the stores. Notwithstanding the improvements, 

managers of small stores report having difficulty balancing store 

operations and duties, as a result of the reductions in the number of 

management positions.[Footnote 6]



Savings Achieved Through Personnel Reductions:



DeCA is using workforce reductions as the primary means to achieve its 

goal of reducing operating costs by fiscal year 2004. As table 1 shows, 

DeCA plans to reduce its workforce by 3,047 full-time positions, a 

decrease of 17 percent from its fiscal year 2000 staff. Of these 

positions, the largest number (2,690) will come from reductions at the 

store level while 187 will come from headquarters and 170 from regional 

offices.



Table 1: Planned Personnel Reductions by Organizational Level:



Organization: Headquarters[A]; Fiscal year 2000 baseline: 911; 

Reductions in full-time positions: Planned: 187; Reductions in full-

time positions: Actual 12/31/02: 116.



Organization: Regional offices; Fiscal year 2000 baseline: 590; 

Reductions in full-time positions: Planned: 170; Reductions in full-

time positions: Actual 12/31/02: 170.



Organization: Stores; Fiscal year 2000 baseline: 16,565; Reductions in 

full-time positions: Planned: 2,690; Reductions in full-time positions: 

Actual 12/31/02: 2,316.



Organization: Total; Fiscal year 2000 baseline: 18,066; Reductions in 

full-time positions: Planned: 3,047; Reductions in full-time positions: 

Actual 12/31/02: 2,602.



[A] Includes field operating activities.



[End of table]



Source: DeCA.



As of December 31, 2002, DeCA had completed all of its workforce 

reductions at the regional offices and 62 percent of its planned 

headquarters’ reductions. It accomplished this by eliminating 137 

vacant positions (114 in headquarters and 23 in the regional offices). 

It reduced its regional staff by another 147 positions through 

organizational changes and other efficiencies, including closing two 

area offices in one region.



By the same date, DeCA had completed most of its planned workforce 

reductions at the store level, eliminating 2,316, or 86 percent of the 

2,690 positions that it had targeted. As table 2 indicates, most of the 

planned store-level reductions (51 percent) are being achieved by 

implementing efficiency measures within stores. Efficiencies are being 

derived by implementing new staffing standards for each department 

within a store based on sales volume and other measures. The remaining 

reductions are accomplished by other methods, including eliminating 

vacant positions, closing stores, and contracting out some functions.



Table 2: Planned Personnel Reductions at Store Level, by Method:



Method: Achieve efficiencies through new staffing standards; Number: 

1,374; Percent: 51.



Method: Eliminate vacant positions; Number: 812; Percent: 30.



Method: Close stores; Number: 361; Percent: 13.



Method: Contract out; Number: 143; Percent: 5.



Method: Total; Number: 2,690; Percent: 99[A].



[A] Percentages do not add to 100 due to rounding.



[End of table]



Source: DeCA.



A breakdown of completed and planned workforce reductions at the store 

level are as follows:



* 1,113 positions were eliminated by implementing the new store 

staffing standards based on sales volume. The remaining 261 efficiency 

reductions are planned in fiscal year 2003.



* 812 vacant positions were eliminated. A DeCA official stated that 

vacant positions existed because stores had historically been funded at 

only 90 percent of their required staffing. The elimination of these 

positions resulted in no personnel losses and produced no savings.



* 304 positions were eliminated as a result of 15 store closings. 

Closings can stem from Base Realignment and Closure recommendations or 

Under Secretary of Defense (Personnel and Readiness) approval of DeCA’s 

recommendations from internal assessments. An additional 49 positions 

will be eliminated at two stores scheduled to close in fiscal year 

2003.[Footnote 7]



* 87 positions were eliminated by contracting out such store functions 

as receiving, handling, and stocking. An additional 30 positions at 

various stores will be eliminated in this way in fiscal year 2003. The 

remaining 26 planned reductions were canceled to provide positions for 

a new computer-aided ordering function.



Although DeCA had eliminated most of the planned 2,690 positions from 

its stores by the end of 2002, only 122 store employees were separated 

from the agency by a reduction in force and an additional 341 employees 

retired. Other employees were reassigned or moved to lower graded 

positions through the reduction process.



Stores Plan Greater Reliance on Part-time Positions but Lack Specific 

Goals for Workforce Mix:



As part of the effort to reshape the workforce, all stores have begun 

to, or plan to, increase the use of part-time positions to manage 

workloads and meet the needs of customers. However, since DeCA’s 

strategic plan does not include specific goals for achieving a certain 

full-time/part-time workforce mix in stores, the planned percentage of 

part-time positions varies widely by individual store and region.



The available data shows that the number of part-time positions in 

stores has increased since the personnel reduction plan went into 

effect. For example, the number of part-time employees rose by 

8 percent in stores in the Midwest region between April 2001 and 

October 2002. Store directors told us that using part-time employees 

improved their ability to manage fluctuations in store workloads more 

effectively. For example, a store director said that part-time 

employees were used during weekends and holidays to save money. Another 

store director pointed out that part-time employees are available to 

work if there is work to do in a department or cover a peak shopping 

period, but they can be sent home if the work is completed. In 

addition, some store directors told us that a greater use of part-time 

workers has allowed them to increase their store operating hours. We 

found that 30 stores have increased their hours of operation by relying 

more heavily on part-time employees. For example, one store with a 

part-time workforce of nearly 60 percent increased its operating hours 

by 6 hours a week.



In addition, current individual store plans call for a growth in the 

number of part-time positions in stores as of the end of fiscal year 

2003. The Eastern and Midwest regions estimate that about 56 percent of 

their store positions will be part-time, and the Western Pacific region 

estimates 46 percent of its store positions will be part-time. Table 3 

shows the range in the percentage of part-time positions that stores 

within each sales band plan to employ.



Table 3: Range of Percentages of Part-time Positions Planned by Stores, 

by RegionA and by Store BandB at the End of Fiscal Year 2003:



Store band: 1; Eastern

 region: 25-100; Midwest

 region: 7-67; Western Pacific

 region: 14-45.



Store band: 2; Eastern

 region: 28-71; Midwest

 region: 45-68; Western Pacific

 region: 47-57.



Store band: 3; Eastern

 region: 41-56; Midwest

 region: 24-61; Western Pacific

 region: 7-67.



Store band: 4; Eastern

 region: 27-72; Midwest

 region: 34-71; Western Pacific

 region: 21-65.



Store band: 5; Eastern

 region: 34-76; Midwest

 region: 42-78; Western Pacific

 region: 24-64.



Store band: 6; Eastern

 region: 40-70; Midwest

 region: 50-67; Western Pacific

 region: 23-66.



Store band: Average part-time positions in region; Eastern

 region: 53; Midwest

 region: 56; Western Pacific

 region: 46.



[A] The European Region was not included in the scope of work.



[B] Stores are categorized into six bands according to their average 

monthly sales volume and days of operation.



[End of table]



Source: DeCA.



As table 3 shows, the planned percentage of part-time positions varies 

widely by individual store and region. For example, one Eastern region 

store expects to convert all of its store positions to part time while 

another store in the Western Pacific region plans to have only 

7 percent of its workforce as part time. While some stores are close to 

the 75 to 80 percent industry average for part-time positions in 

commercial grocery stores, the overall regional average of part-time 

positions indicates that there are opportunities to achieve more 

efficiencies through greater use of part-time positions.



Store directors have the flexibility of changing the mix of full-time 

and part-time positions in their stores. Some store directors told us 

they used part-time positions primarily to meet their budget goals. One 

store director said that part-time positions were created to meet the 

store’s budget and that there were no plans to increase part-time 

positions in the store once the needed reductions were made. However, 

nearly all of the store directors we interviewed said that they could 

operate their stores with more part-time positions rather than full-

time positions. As indicated earlier, they recognized that part-time 

positions provide flexibility to manage workload fluctuations more 

effectively. A regional director said that agencywide goals for part-

time workers need to be incorporated into the strategic plan to 

optimize agency efforts to reshape the workforce.



Customer Satisfaction Remains High Despite Workforce Reductions:



According to recent surveys, customer satisfaction with commissary 

stores has shown a modest, but steady, improvement between October 2001 

and November 2002, the period when personnel reductions were being 

made. These improvements were registered in the overall score, ranging 

from 4.33 to 4.39, as well as in specific products and service 

categories. Table 4 includes results for 6 of the 14 questions, as well 

as the overall score.



Table 4: Customer Satisfaction ScoresA on Recent Surveys, for Product 

and Service Categories:



(Continued From Previous Page)



Category: Produce quality/selection; October

 2001: 4.22; May

 2002: 4.26; November

 2002: 4.27.



Category: Meat quality/selection; October

 2001: 4.30; May

 2002: 4.35; November

 2002: 4.37.



Category: Checkout waiting time; October

 2001: 4.34; May

 2002: 4.39; November

 2002: 4.39.



Category: Convenient hours; October

 2001: 4.33; May

 2002: 4.36; November

 2002: 4.38.



Category: Courteous, friendly and helpful employees; October

 2001: 4.64; May

 2002: 4.64; November

 2002: 4.66.



Category: Overall satisfaction; October

 2001: 4.49; May

 2002: 4.52; November

 2002: 4.53.



Category: Overall score; October

 2001: 4.33; May

 2002: 4.38; November

 2002: 4.39.



Note: DeCA also collects data on bakery and deli operations, which are 

both operated by contractors.



[A] Scores are based upon a scale of 1 (very poor) to 5 (very good).



[End of table]



Source: DeCA.



These scores reflect continuing satisfaction including those likely to 

be most immediately affected by changes in personnel levels such as 

checkout waiting time.



Reductions in Management Positions at Small Stores Is Causing Some 

Concerns:



As part of the effort to reshape the workforce, many directors of small 

stores (bands 1 and 2) told us they had to eliminate one managerial 

position. Small stores that have less than $60,000 in average monthly 

sales were required to reduce the number of managers to one manager. 

Small stores with $60,000 to $500,000 in average monthly sales had to 

reduce their number to two managers. The managers of 15 of the 28 

band 1 stores told us that they are having difficulties balancing store 

operations with their own managerial and administrative duties along 

with doing the work of absent employees. Some store directors said they 

typically have to work more than 40 hours a week to perform all these 

duties.[Footnote 8] Eighty-seven percent of these 15 band 1 stores are 

open more than 40 hours a week. Because DeCA policy requires that a 

manager be present in the store when it is open for customers, when the 

second manager or an employee is absent, the on-duty manager has to 

carry his/her own workload and administrative functions, as well as the 

load of the absent manager or employee, typically working over the 

usual 40-hour work week. DeCA headquarters officials have recognized 

the concerns raised by managers in small stores and the need to balance 

their overall workload but have not yet developed a plan for doing so.



Customer Satisfaction Survey Methodology Is Reasonable, but Analysis 

Could Be Improved:



Overall, DeCA’s customer satisfaction survey methodology is a 

reasonable approach to obtain customer feedback. It adheres to standard 

questionnaire design principles, and attempts to select shoppers in an 

unbiased fashion. However, some improvements in the analysis of survey 

data could be made to provide more precise and complete customer 

information. For example, it could adjust survey results for actual 

sales volumes, or report and possibly adjust for shoppers who refuse to 

complete the survey questionnaire. Because these factors are not 

considered, overall survey results could be distorted to some degree. 

Furthermore, the current survey does not collect information on the 

number of service members who do not shop at a commissary and reasons 

why they do not.



Weighting Survey Responses by Current Sales Volume Categories May Give 

Incomplete Results:



DeCA’s current methodology appropriately attempts to obtain more survey 

responses from stores with higher sales volumes than stores with 

smaller sales volumes. DeCA places commissaries into three groups 

according to sales volume. They do this so that survey responses of 

customers in greater sales volume stores receive more emphasis than 

those in lower volume stores. For example, stores in the largest sales 

volume group are required to collect 150 responses, stores in the next 

largest sales group collect 100 responses, and those in the lowest 

sales volume group collect 50 responses. However, sales volume can vary 

significantly among the stores in the same group as well as between 

groups. A more precise methodology would entail weighting survey 

responses by the relative sales volume of individual stores. This 

approach could help DeCA avoid potential over-or underreporting of 

survey results, and evaluate changes in survey results that may be 

impacted by changes in sales volume.



Number of Non-respondents Needs to Be Recorded:



DeCA does not document the number of customers who refuse to 

participate in the customer satisfaction survey. DeCA officials told us 

that most customers selected to participate in the survey willingly 

respond, but they acknowledge that documenting the number of 

non-respondents would enhance survey reporting. Survey literature 

indicates that even nominally low levels of non-responses can influence 

the interpretation of survey results. There may be a particular sub-

group of customers that does not respond to the questionnaire and that 

would not be reflected in DeCA results. By not adjusting for non-

response, DeCA is assuming that respondents have similar satisfaction 

scores as non-respondents. Also, by collecting data on non-respondents, 

the agency may be able to determine if the results omit customer 

subgroups whose opinions may be important. For example, some dependents 

of service personnel may not feel comfortable participating in the 

survey because of language barriers.



Assessing Why Eligible Shoppers Do Not Shop at Commissaries:



DeCA does not conduct systematic assessments of the number and types of 

personnel who do not shop at commissaries. The customer satisfaction 

survey is conducted in the stores, and thus reflects the views of those 

who shop at the commissaries. They do not capture the views of those 

who do not shop there. Although DeCA’s strategic plan addresses the 

need to attract more military personnel to use the commissary, DeCA 

officials do not know to what extent eligible customers are not 

shopping at a commissary and the reasons why not.



Conclusions:



Realignment of the workforce, through greater use of part-time 

employees, has enabled many stores to increase their operating hours 

and maintain or improve customer service. However, DeCA’s strategic 

plan does not include specific goals for the full-time/part-time 

workforce mix. As a result, the extent of part-time employees varied 

among the stores and is significantly less than current industry 

practice. Opportunities to achieve even more efficiencies may exist 

through greater use of part-time positions. In addition, small store 

directors have concerns about balancing their workload and maintaining 

store operations. Although DeCA’s customer satisfaction survey 

questionnaire is reasonable, survey results could be subject to some 

under-or over-stated because the current methodology does not 

explicitly weight stores’ results by sales volume and does not collect 

data on non-responding customers. Finally, DeCA does not know how many 

eligible service members do not shop at a commissary and the reasons 

they do not.



Recommendations for Executive Action:



We recommend that the Under Secretary of Defense (Personnel and 

Readiness), in consultation with the Chairman, Commissary Operating 

Board, require the Director, Defense Commissary Agency, to:



* update the strategic plan to include goals that identify the percent 

of the store workforce that is expected to be full-and part-time to 

achieve further efficiencies from reshaping the workforce;



* reassess the management reductions at small stores to ensure managers 

can balance their workload and maintain store operations;



* adjust the customer survey results on the basis of sales volume and 

customer expenditure data;



* document the number of survey non-respondents and their reasons for 

not completing the questionnaire; and:



* examine potential methods and analyses to periodically determine how 

many and why eligible personnel do not shop at commissaries, to 

identify ways to improve service and increase the number of potential 

customers using the commissary benefit.



Agency Comments and Our Evaluation:



In commenting on a draft of this report, the Under Secretary of 

Defense (Personnel and Readiness) concurred with four of our five 

recommendations and outlined actions to be taken to address the four 

recommendations the department concurred with. He disagreed with our 

recommendation that the Defense Commissary Agency update its strategic 

plan to include goals that identify the percent of the store workforce 

that is expected to be full-and part-time, expressing the view that 

staff in Washington should not prescribe the full-part-time mix for 

stores. The intent of our recommendation was not for the Under 

Secretary to prescribe the workforce mix for stores but rather have the 

Defense Commissary Agency include agencywide goals on the projected 

workforce mix in its strategic plan to help achieve the goal of 

reshaping the workforce. Rather than being arbitrary or prescriptive, 

such goals, if based on considered research or best practices, could 

provide an important term of reference to guide staffing decisions at 

the local level to optimize organizational performance and cost 

effectiveness. We continue to believe the recommendation is an 

appropriate one for the Defense Commissary Agency to implement. The 

department’s comments are reprinted in appendix II.



Scope and Methodology:



We performed our work at DeCA headquarters located at Fort Lee, 

Virginia, and DeCA’s three regional offices in the continental United 

States (the Eastern Regional Office in Virginia Beach, Virginia; the 

Midwest Regional Office in San Antonio, Texas; and the Western Pacific 

Regional Office in Sacramento, California). Due to travel costs and 

time constraints, we did not do any work at the European Regional 

Office in Germany; however, the total number of reductions shown for 

DeCA does include positions in the European Region.



To determine the status of DeCA’s personnel reduction plan, we 

obtained data from DeCA headquarters and each regional office on the 

number of reductions planned by region by store as well as made as of 

December 31, 2002. We also analyzed reduction-in-force data to 

determine the actual or estimated impact on store employees. We also 

reviewed DeCA’s strategic plan to document DeCA’s plans for reducing 

unit operating costs and reshaping the workforce. We did not validate 

the cost savings reported by DeCA.



To determine how store operations and customer service have been 

affected by the personnel reductions, we interviewed officials at DeCA 

headquarters and the three regional offices in the United States. We 

also interviewed store directors at eight stores that were near the 

Eastern and Midwest regional offices. In addition, we also conducted 

telephone interviews with either the store directors or managers for 

38 band 1 and 2 stores in the continental United States (defined as 

having average monthly sales volume of less than $1 million), resulting 

in interviews of all 41 band 1 and 2 stores in the continental United 

States. We also determined the planned use of part-time positions by 

each store in the three regional offices visited. Finally, we also 

reviewed and discussed the Commissary Customer Service Survey results 

for the surveys conducted in October 2001 and May and November 2002, to 

identify changes in the satisfaction scores as the personnel reductions 

were being implemented.



To determine if the DeCA customer satisfaction survey methodology is 

reasonable, we reviewed DeCA’s questionnaire and methodology and 

contrasted these to standard questionnaire design and statistical 

sampling procedures used in industry and government research. We also 

interviewed DeCA officials responsible for administering the survey 

regarding their analysis of survey results. We also observed the survey 

being conducted at the Fort Myer store in Virginia in November 2003.



We conducted our review from July 2002 through January 2003 in 

accordance with generally accepted government auditing standards.



We are sending copies of this report to the Secretary of Defense; the 

Under Secretary of Defense (Personnel and Readiness); the Chairman, 

Commissary Operating Board; Director, Defense Commissary Agency; and 

the Director, Office of Management and Budget. In addition, the report 

will be available at no charge on GAO’s Web site at www.gao.gov and to 

others upon request.



Please contact me at (202) 512-8412 if you or your staff have any 

questions concerning this report. Major contributors to this report 

were Michael Kennedy, Leslie Gregor, Betsy Morris, Curtis Groves, 

and Nancy Benco.



Barry W. Holman

Director, Defense Capabilities and Management:



Signed by Barry W. Holman



List of Congressional Committees:



The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate:



The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate:



The Honorable Duncan Hunter

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives:



The Honorable Jerry Lewis

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives:



[End of section]



Appendix I: Commissary Customer Service Survey Questionnaire:



[See PDF for image]



[End of figure]



[End of section]



Appendix II: Comments from the Department of Defense:



UNDER SECRETARY OF DEFENSE 4000 DEFENSE PENTAGON WASHINGTON, D.C. 

20301-4000:



FEB 26,	2003:



PERSONNEL AND READINESS:



Mr. Barry Holman:



Director, Defense Capabilities and Management U.S. General Accounting 

Office:



Washington, DC 20548:



Dear Mr. Holman:



This is the Department of Defense (DoD) response to the GAO Draft 

Report, GAO-03-417, “DEFENSE INFRASTRUCTURE: Personnel Reductions Have 

Not Hampered Most Commissaries’ Store Operations and Customer Service,” 

dated February 7, 2003 (GAO Code 350243).



The DoD concurs with the overall comments and recommendations in the 

report with one exception. I do not believe we in Washington should 

prescribe the full-time/ part-time mix for stores. Rather, we should 

counsel those managers who should make more aggressive use of part-time 

personnel, leaving the detailed plan to them. Specific comments on the 

remaining recommendations are enclosed.



Thank you for the opportunity to comment on this report.



David S. C. Chu:



Signed by David S. C. Chu



Enclosure: As stated:



GAO-03-417/GAO CODE 350243:



“DEFENSE INFRASTRUCTURE: PERSONNEL REDUCTIONS HAVE NOT HAMPERED MOST 

COMMISSARIES’ STORE OPERATIONS AND CUSTOMER SERVICE”:



DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:



RECOMMENDATION 1: The GAO recommended that the Under Secretary of 

Defense (Personnel and Readiness), in consultation with the Chairman, 

Commissary Operating Board, require the Director, Defense Commissary 

Agency, to update the strategic plan to include goals that identify the 

percent of the store workforce that is expected to be full-and part-

time to achieve further efficiencies from reshaping the workforce. 

(Page 13/Draft Report).



DoD RESPONSE: Nonconcur with comment. I do not believe we in Washington 

should prescribe the full-time/ part-time mix for stores. Rather, we 

should counsel those managers who should make more aggressive use of 

part-time personnel, leaving the detailed plan to them.



RECOMMENDATION 2: The GAO recommended that the Under Secretary of 

Defense (Personnel and Readiness), in consultation with the Chairman, 

Commissary Operating Board, require the Director, Defense Commissary 

Agency, to reassess the management reductions at small stores to ensure 

managers can balance their workload and maintain store operations. 

(Page 13/Draft Report).



DoD RESPONSE: Concur. In structuring the workforce of the future, the 

Department will require DeCA to reassess the management positions that 

are authorized in small stores.



RECOMMENDATION 3: The GAO recommended that the Under Secretary of 

Defense (Personnel and Readiness), in consultation with the Chairman, 

Commissary Operating Board, require the Director, Defense Commissary 

Agency, to adjust the customer survey results on the basis of sales 

volume and customer expenditure data. (Page 13/Draft Report).



ENCLOSURE:



DoD RESPONSE: Concur. The Department will require the Defense 

Commissary Agency to adjust customer survey results based on sales 

volume as described in the report. A method for adjusting survey 

results based on sales volume will be developed and fully implemented 

prior to fiscal year 2004 data collection.



RECOMMENDATION 4: The GAO recommended that the Under Secretary of 

Defense (Personnel and Readiness), in consultation with the Chairman, 

Commissary Operating Board, require the Director, Defense Commissary 

Agency, to document the number of survey non-respondents and their 

reasons for not completing the questionnaire. (Page 14/Draft Report).



DoD RESPONSE: Concur. The Department will require the Defense 

Commissary Agency to design and implement a method to document the 

number of non-respondents. In addition, as much information as 

practical will be collected in order to understand reasons for non-

response. A method to document non-respondents will be developed and 

fully implemented.



RECOMMENDATION 5: The GAO recommended that the Under Secretary of 

Defense (Personnel and Readiness), in consultation with the Chairman, 

Commissary Operating Board, require the Director, Defense Commissary 

Agency, to examine potential methods and analyses to periodically 

determine how many and why eligible personnel do not shop at 

commissaries, to identify ways to improve service and increase the 

number of potential customers using the commissary benefit. (Page 14/

Draft Report).



DoD RESPONSE: Concur. The Department will require the Defense 

Commissary Agency to examine potential methods and analyses to 

periodically determine how many and why eligible personnel do not shop 

at commissaries, to identify ways to improve service and increase the 

number of potential customers using the commissary benefit. Potential 

methods will be examined before the end of fiscal year 2003.



[End of section]



FOOTNOTES



[1] The elimination is of full-time equivalent positions.



[2] The reduction plan, which also includes savings through non-

manpower reductions such as utility and transportation costs, is to 

reduce DeCA’s appropriation by a total of $137 million in fiscal year 

2003 and reduce annual operating costs through the out years.



[3] H. Rep. No. 107-436.



[4] The funds generated by the surcharge are used to maintain and 

repair existing stores and construct new facilities.



[5] Prior to 2002, the survey was conducted once a year rather than 

twice annually.



[6] DeCA categorizes its stores into six bands based on average monthly 

sales volume and days of operation. Small stores are those with average 

monthly sales of less than $1 million. Medium and large store 

categories have sales ranges from $1 million to $2 million and $2 

million and higher, respectively. A few medium stores have sales less 

than $1 million.



[7] Stores at Rhein Main and Bad Aibling, both in Germany, are 

scheduled to close.



[8] The management staffing standards show store management structure 

based on sales volume. Managers of small stores typically manage from 3 

to 40 employees.



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