A new Defense Department memo — and its clarification of three words — may ease the way for more military spouses to operate home-based businesses on military installations, especially when it comes to long-standing conflicts with competing with military exchanges and morale, welfare and recreation activities.
Military exchanges may be the “primary” resale activity on installations for certain items, but that doesn’t mean they’re the “exclusive” retailer, according to the DoD memo, signed Sept. 26 by Stephanie Barna, acting under secretary of defense for personnel and readiness. The memo also addresses some examples to clarify two other important words — whether a business might “supplement” what’s offered on the base rather than “compete” with the retail activities.
The memo deals specifically with whether a business conflicts with or unfairly competes with commissaries, exchanges, or morale, welfare and recreation activities on an installation. The decision-making authority still rests with the installation commanders, but the memo provides some clarity in that area.
Military spouse entrepreneurs would welcome more consistency in the process, as they move from installation to installation, said Sue Hoppin, founder and president of National Military Spouse Network.
“They’re not frustrated that commanders have the authority” to make the decisions, she said. Instead, “it’s the inconsistency in the interpretation," which differs from installation to installation, and sometimes changes when a new commander arrives.
It’s often difficult to find out what the requirements are, said Lauren Hope, owner of Hope Design.
“I don’t mind meeting a high bar. I just need to know where the bar is,” she said, during a NMSN panel discussion Thursday of military spouse entrepreneurs.
Hope, who designs, hand crafts and sells military jewelry, said she has encountered a number of issues trying to operate her business out of her home on installations, including concerns about competition with on-base retail operations.
Because of the inconsistencies regarding home based businesses at previous installations, she said, “we chose to live off base at Fort Leavenworth. I couldn’t jeopardize my business and my income.”
Her business is five years old.
Current DoD policy says that exchanges are the “primary resale activity on DoD installations for non-food merchandise and patron services.”
But according to this new memo, “primary” doesn’t mean “exclusive.”
The policy that makes exchanges the primary resale activity for these items was intended to prevent major businesses from setting up shop on military bases and competing with the exchanges, commissaries and MWR activities, the memo states. It wasn’t intended to keep small businesses from operating on bases.
The memo is an effort to address some restrictions that have affected military spouse business owners, by allowing commanders to use their discretion, according to DoD spokeswoman Air Force Maj. Carla Gleason.
The document gives two examples of how a small business might not necessarily compete with retail activities but supplement them:
- A military spouse or dependent who operates a small business out of his or her on-installation home that sells items such as cosmetics, kitchen utensils, or card-making supplies to on-installation friends and neighbors generally does not materially threaten the economic viability of the installation military exchange operation.
- A military spouse or dependent who offers services such as piano lessons or art classes generally does not materially threaten the economic viability of the installation MWR program.
The memo also provides some clarity on other business activities operated out of the home that may not fall under these guidelines.
- Businesses operated out of the on-base home exclusively through online means, such as eBay and Etsy, and/or at physical locations outside the installation don’t constitute operating on the installation, when determining whether they compete with on-base retail activities.
- People who live on base and work remotely for businesses or organizations that operate exclusively through online, and/or at physical locations outside the base aren’t considered to be a non-federal entity operating on the installation.
Installations can get reimbursed from the entity — including small businesses — for the “fair market value” of any cost to the installation to support that entity, such as facility use, utility use, custodial service, according to the memo.
“Installation commanders should consider the clarifications in this memorandum when exercising discretion and sound judgment in weighing the impact of having a non-federal entity or entities operating on the military installation,” the memo states.
The services will likely have more guidance.
The Army, for example, will develop more policy over the next few months to help clarify its guidelines, said Col. Megan Gumpf, acting director of installation services for the Army’s office of the assistant chief of staff for installation management, speaking Tuesday at a family forum during the annual meeting of the Association of the United States Army.
“We acknowledge there are a few challenging processes, and spouses have to navigate several different areas online and at different installations to gain approval for a home-based business," she said.
Typically, Army Community Services is going to be the first stop, she said, and the housing office — privatized housing or Army housing — also needs to be consulted. Spouses need to make sure they’re in compliance with any federal, state and local requirements, to include regulations regarding professional licenses and certifications. Overseas, there are additional requirements and restrictions because of Status of Forces Agreements with host countries.
Information was not immediately available about whether defense officials are working with State Department officials to discuss some of those issues.
“For the Army, we’re going to focus on very broad guidelines and still provide the garrison commander and the installation commanders that authority to determine, based on their location, whether or not the home-based business may be considered competition for MWR or [Army and Air Force Exchange Service],” Gumpf said, in an interview.
“We hope to streamline, establish a directive that provides guidance from installation to installation,” she said. “Each garrison may do things differently, but it would certainly be helpful for the patron and the home-based business owner if they could just know which point of contact to go to for the initial information.”
That might include bringing this information to the forefront of a garrison’s home page.
The opportunities are “immense” for different types of businesses, Gumpf said.
"We need to ensure at the installation level that safety, security and community tranquility is at the forefront of all of it — which is why [installation commanders] need to stay in the loop and need to have that final authority,” Gumpf said. “We also need to provide the spouse with the opportunity to excel.”
NMSN’s Hoppin said spouses understand situations differ from installation to installation, and that commanders have many priorities to deal with, but perhaps officials could flesh out some commonalities to streamline the process.
“There are so many difficult things in the transient lifestyle, why does this have to be one of them?" she said. "Can’t we make this easier on both sides?
"This may never [get] to the top three issues that a commander has to deal with, but for the spouse it may be their top issue, and may be the difference between being able to feed their family or paying for child care. It matters.”