A proposal to allow all honorably discharged veterans to shop in the online military exchanges has hit some roadblocks. At least one Navy policy official has raised concerns, according to sources who spoke on condition of anonymity. But there is also some opposition within the Defense De­partment. In addition to a number of questions about the business plan, a main concern is that expanding on­line access would result in “benefit creep” — access for veterans to brick-and-mortar exchange stores and even to other quality-of-life benefits, sources said.  A 6 AUG point paper prepared by the Army and Air Force Exchange Service stresses that AAFES would clearly communicate that the new benefit would apply to online shopping only. “No additional benefits such as access to brick and mortar stores are im­plied or envisioned,” states the document, a copy of which was obtained by Military Times.

       The document, providing a business case, was prepared for the DoD Executive Resale Board, following a 29 JUL meeting at which a number of questions were raised. Currently, a limited number of honorably discharged veterans can shop in military exchanges — those who are hospitalized or determined to be 100 percent disabled. But about 90 percent of honorably discharged veterans are ineligible to shop.  AAFES notes that expanding the online customer base to all honorably discharged veterans would “offer enormous potential upside for the entire military community.” Allowing these additional 18.8 million veterans to shop “has the capacity to generate significant incremental sales and earnings.” A majority of those profits would be distributed to morale, welfare and recreation programs, and would be shared with all service branches, depending on branch of service of the veterans doing the shopping.  The document does not mention sharing profits with the veteran community or the Veteran Canteen Service, which operates retail stores inside Veterans Affairs Department hospitals.

      “The AAFES proposal was formally submitted to DoD on 14 MAY and is currently under review,” said DoD spokesman Navy Lt. Cmdr. Nate Christensen. “No decision has been made, nor is there a timetable for reaching one.” Asked about the Navy’s concerns, spokeswoman Lt. Richlyn Ivey said that service “is receptive to proposals that recognize and honor the contributions and sacrifices of our veterans. As with any potential change to statute and/or policy, a thorough evaluation to determine the viability and impact of the proposition is necessary.” The 12-page AAFES document was prepared in response to a request from the DoD Executive Resale Board for additional information. In an email sent to the board members 7 AUG, a defense official encouraged them to include questions they may have in feed­back provided to AAFES CEO Tom Shull after they reviewed the busi­ness case. “Hoping that all agree that the Board’s consideration of this proposal will benefit from an open exchange and discussion of any and all questions or concerns,” wrote Stephanie Barna, acting as­sistant secretary of defense for readiness and force management.

      The AAFES point paper refers to another concern — how online veteran shoppers would be validated. AAFES officials have said planning has already started between AAFES and the Defense Manpower Data Center to establish an on­line verification process. The only true “con,” in AAFES’ view, is the inability to quickly move on the veterans’ online shopping benefits. Each month of delay in implementing the initiative is costing DoD $8 million to $14 million in profits and is costing MWR $5 million to $9 million in dividends, the point paper states. AAFES has been taking steps to shore up its financial position, reducing its overhead by $250 million over the last three years. In 2013, it contributed $208 million in dividends to MWR programs out of $332 million in profits.

      As the Army and Air Force have reduced their personnel end strength, AAFES has seen a 10 percent decrease in sales. “While the organization’s intent is to maintain the same level of service, earnings and dividends, AAFES may be unable to meet these objectives without this change in policy,” said AAFES spokesman Judd Anstey, when asked what it could mean to AAFES’ viability if the proposal is turned down.  AAFES contends the new plan would require only a “modest change” to DoD policy, not a change in law. That remains to be seen; if the Executive Resale Board makes a recommendation to the Pentagon, DoD general counsel would determine whether a change in law would be required. 

 [Source:  Navy Times | Karen Jowers | Aug 25, 2014]