Commissary customers in the Pacific will see lower prices on their bagged salads starting in April.
Defense Commissary Agency officials have agreed to start paying for the cost of shipping bagged salads -- spinach, coleslaw, shredded lettuce and other commonly sold mixed salads – according to information in a Defense Department Inspector General report released Friday.
Information was not immediately available from DeCA officials about the exact timing of the new shipping process, and thus the decrease in prices. Officials told IG auditors they will "re-initialize" the shipping for bagged salads to the Pacific in April.
IG auditors found that while DeCA is saving about $8.3 million a year in taxpayer dollars in its new contracts by not paying for the transportation of fresh fruits and vegetables to Guam, customers are picking up the cost, paying more for their fresh produce than they did under DeCA's previous contract.
The cost of shipping the bagged salad items is more expensive because they are shipped by air. According to the IG, DeCA's cost to ship bagged salad items in fiscal 2015 was about $773,000. Information was not included about the total cost of shipping bagged salads to the Pacific area commissaries.
Prices of 188 commissary fresh produce items had increased an average of 7 percent, and 150 percent for 41 bagged salad items since new contracts for the supply of fresh fruits and vegetables went into effect in November 2015, according to auditors examining issues with fresh produce in Guam commissaries. Under those new contracts, the cost of shipment is rolled into the price of produce and passed on to the customers. The auditors compared prices from November 2015 to August 2016.
This is the first in a series of audits of commissary produce prices in the Pacific to be performed as part of a requirement in the House of Representatives report accompanying the fiscal 2017 National Defense Authorization Act. That report came in response to customer complaints.
Customers reported that prices skyrocketed after the new contracts took effect in late 2015. One military wife in Guam posted a picture of a 22-ounce package of Romaine lettuce priced at $10.69.
While there was concern at the beginning of the contract about the quality of some of the produce, the IG auditors reported that the quality has improved, according to Army food inspectors and DeCA officials.
Auditors also surveyed 89 commissary customers, and 74 stated that the quality of fresh produce was the same or better than the fresh produce sold under the previous contract.
In his response to the IG report, DeCA director Joseph Jeu said he will follow the IG's recommendation to require DeCA personnel to document problems with quality of produce and identify the cause of the problems.
He acknowledged that DeCA’s research "also highlighted the continued challenges with bagged salads in the Pacific theater" and started reviewing options to bring in high quality items at an affordable price. Thus, DeCA decided to remove the bagged salads from its contracts for fresh fruits and vegetables and resume paying for the air transportation costs, he stated.
While produces prices increased, auditors found that the increased price of produce on Guam did little to move the island's cost-of-living allowance. Fresh produce accounted for 1.3 percent of the Guam overseas COLA in 2016, auditors said. Defense Travel Management Office officials estimate the amount will increase to 1.5 percent in fiscal 2017, according to the IG report.
The Guam commissary prices still were lower than local market prices, auditors stated. They found that prices for 58 fresh produce items prices were 34 percent less and prices for eight bagged salads were 16 percent less than local market prices. For high-volume core items ranging from apples to tomatoes, customers paid 40.5 percent less than local markets. The contract requires a minimum savings of 40.1 percent over local market prices for high-volume core items.
The principle behind taxpayer funding for DeCA to ship items overseas to commissaries has traditionally been to ensure that customers pay prices similar to those in commissaries in the U.S., and they aren't at a financial disadvantage because of being stationed overseas. Before the new contracts went into effect, the benchmark for comparison was produce prices at commercial stores in California.
Karen Jowers covers military families, quality of life and consumer issues for Military Times. She can be reached at firstname.lastname@example.org.