Commissaries “critical instrument for supporting military family readiness.”
Trump’s budget proposal opening shot in the Congressional review process.
Historic 44 percent overall Defense funding increase including major military pay hikes.
The President’s fiscal year 2027 budget that was released April 3 funds commissaries at $1.51 billion and the Department of War has concluded that privatization of commissaries is not feasible.
The Deputy Undersecretary of War for Personnel and Readiness (Secretary Sean O’Keefe) sent a notification to Congress on April 3 that the Department of War, as a result of the RFI process, is not going to pursue privatization of commissaries that was directed in an April 7, 2025, memo by DoW Deputy Secretary Steve Feinberg. ALA vehemently opposed the privatization effort.
In a privatization notification to the Chairmen and Ranking Members of the House and Senate Armed Service Committees, O’Keefe said that the Department has determined that privatization “would create an unacceptable risk to the readiness and well-being of Service members and families.”
“In evaluating the military resale system, the Department reviewed its foundational mission as a critical instrument for delivering non-pay compensation and supporting military family readiness,” the Department of War said.
“A private entity would face significant challenges operating profitably in remote, overseas, and strategically vital but low-volume locations, such as Naval vessels and forward deployed sites, without substantial Government subsidies, that would negate potential savings to the taxpayer…and introducing a profit motive could likely threaten the quality, consistency, and value of that essential support,” the DoW letter said. “The Department will maintain its current operational structure and existing contractual partnerships, ensuring continuity of service,” the letter said.
The Department of War assured Congress that “existing contractors supporting retail programs will experience no disruption, and that the Department will maintain its current operational structure and existing contracts.”
Further, the letter said that “private companies would likely avoid logistically complex and often unprofitable markets, creating an equity gap that would negatively impact morale and readiness for forward-deployed personnel and their families.”
ALA opposed the privatization proposal and there was considerable Congressional push back including letters as well as House report language and legislative language that was included in the FY 2026 Defense bill.
The President sent to Congress yesterday its top line budget for Fiscal Year 2027 and a fact sheet on “rebuilding our Military”. This includes an astonishing $445 billion increase in defense spending from the prior year. They are also going for a 7 percent pay raise for junior enlisted troops along with 5-6 percent raises for others. DoW is referring to $1.6 billion in wasteful spending that has been “reallocated”. Commissaries are funded at $1.501 billion, down from $1.528 billion last year and from $1.625 billion in fiscal 2025.
The President’s budget also said that DeCA is planning to operate 236 stores with 10,160 employees. With the massive increase in the Department’s top line, it is likely that the exchanges will have all of the necessary funding to pay for items that traditionally are paid for from appropriations—transportation, utilities, facility maintenance and so forth.
Also, the budget includes major changes to boost the Defense Industrial Base and ALA will be integrating and leveraging the ALA compliance platform with this industrial base effort.
