The U.S. military has a long-standing tradition of caring forits own. Since 1879, the Department of Defense (DoD) hassupplemented military pay by operating commissaries that providegrocery, meat, and produce items at low cost to military personnel,retirees, and their families. The Defense Commissary Agency (DeCA),a component of the DoD, runs the commissary system, which servesall branches of the U.S. military.

DeCA operates a global network of 243 grocery stores. It isheadquartered at Fort Lee near Petersburg, Va. The organization isstructured into five geographical units. Three units administeroperations in the continental United States and Puerto Rico. Theother two units manage international operations in Europe, Africa,and Asia.

There are 176 domestic commissaries and 67 internationalcommissaries. Twenty-two domestic commissaries are located in areasthat the military has classified as “remote and isolated.” A remoteand isolated location generally has no nearby town and usually hasan extreme environment (for example, Fort Irwin in the MojaveDesert). 5 The commissary is the only grocery option for militarystationed at remote bases.

As part of the Budget Control Act of 2011, Congress enactedsequestration: automatic, across-the-board budget cuts triggered ifCongress fails to reach a budget agreement. If the sequester istriggered, an automatic 9% cut is applied to all military programs,including the commissaries. This means that DeCA’sCongressional appropriation could be immediately reduced by 9%, or$114.7 million. In this scenario, DeCA administrators would need toreduce the agency’s net cost of operations by that amount.

Given the very real possibility of a budget cut, consultantshired by the DoD have developed a contingency plan that presentstwo viable options. The first option is to eliminate regular(nonremote) domestic commissaries and instead give militarypersonnel food vouchers that can be used at commercial grocerystores. The second option is to keep the U.S. commissary systemlargely intact and strategically close commissaries that providethe least benefit to the military community (under the secondoption, there are two metrics: benefit per appropriation, andbenefit per potential customer).

How do you balance the organizationalgoals with financialconsiderations?