Organized Retail Crime

Kristin M. Finklea
Specialist in Domestic Security

Organized retail crime (ORC) involves the large-scale theft of everyday consumer items and potentially has much broader implications. Organized groups of professional shoplifters, or “boosters,” steal or fraudulently obtain merchandise that is then sold, or “fenced,” to individuals and retailers through a variety of venues. In an increasingly globalized society, more and more transactions take place online rather than face-to-face. As such, in addition to relying on physical resale markets, organized retail thieves have turned to online marketplaces as means to fence their ill-gotten goods.

ORC exposes the United States to costs and harms in the economic, public health, and domestic security arenas. The exact loss from ORC to the retail industry is unknown, but estimates have ranged from $15 billion to $37 billion annually. The economic impact, however, extends beyond the manufacturing and retail industry and includes costs incurred by consumers and taxes lost by the states. The theft and resale of stolen consumable or health and beauty products such as infant formula (that may have been repackaged, relabeled, and subjected to altered expiration dates) poses potential safety concerns for individuals purchasing such goods from ORC fences. In addition, some industry experts and policy makers have expressed concern about the possibility that proceeds from ORC may be used to fund terrorist activities.

Current efforts to combat ORC largely come from retailers, online marketplaces, and law enforcement alike. Retailers responding to the 2010 National Retail Security Survey spent an average of 0.46% of their annual sales on loss prevention measures. These loss prevention costs are ultimately borne by consumers in the form of higher prices on goods. Also, online marketplaces report taking various measures to combat the sale of stolen and fraudulently obtained goods on their websites, including educating sellers and consumers, monitoring suspicious activity, and partnering with retailers and law enforcement. Combating retail theft has traditionally been handled by state law enforcement under state criminal laws. Some, however, have begun to question whether state laws—which vary in the quantity of monetary losses that constitute major theft—are adequate to combat ORC.

While many agree that ORC is a national problem, there is debate over the federal government’s role in deterring ORC and sanctioning various actors that may be involved in committing or aiding these crimes. One policy issue facing Congress is whether criminalizing organized retail crime in the U.S. Code would allow for more effective investigation and prosecution of these criminals. Congress may also wish to consider whether regulating resale marketplaces (online markets, in particular), to require such entities to increase information sharing with retailers and law enforcement, would strengthen investigations and prosecutions of ORC as well as decrease the prevalence of retail thieves relying on legitimate online marketplaces to fence stolen goods.


Date of Report: January 17, 2012
Number of Pages: 26
Order Number: R41118
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Circular A-76 and the Moratorium on DOD Competitions: Background and Issues for Congress

Valerie Bailey Grasso
Specialist in Defense Acquisition

This report discusses the current moratorium on the conduct of Department of Defense (DOD) public-private competitions under Office of Management and Budget (OMB) Circular A-76 and issues for Congress.

There is a long-standing public debate over the conduct of A-76 competitions. The policy of the government relying on the private sector for the performance of commercial services was first initiated by the Bureau of the Budget during the Eisenhower Administration. OMB Circular A- 76, first issued in 1966, defines federal policy for determining whether recurring commercial activities should be performed by the private sector or federal employees. The Circular has been revised several times; the latest revision was released in 2003.

Public debate over A-76 policy ignited in February 2007 as a result of a series of articles in the Washington Post on the conditions at the former Walter Reed Army Medical Center in Washington, DC. The articles led to several investigations, resignations of some senior Army officials, congressional hearings, and legislation passed by Congress to prohibit the conduct of A- 76 competitions at military medical facilities. Congress passed legislation in Public Law (P.L.) 110-181, the National Defense Authorization Act for Fiscal Year (FY) 2008 to suspend DOD public-private competitions under OMB Circular A-76. Congress also passed legislation in P.L. 111-8, the Omnibus Appropriations Act for FY2009, to halt the beginning of any new A-76 competitions throughout the rest of the federal government. The government-wide moratorium has continued to the present. Section 733 of H.R. 2434, the proposed Financial Services and General Government Appropriations Act for FY2012, would prohibit funds from being used to begin or announce a study or public-private competition regarding the conversion to contractor performance of any function performed by Federal employees pursuant to Office of Management and Budget Circular A-76 or any other administrative regulation, directive, or policy.

Congress has directed the completion of several reports before the moratorium can be lifted. The congressionally-required reports are the “Section 325” report which DOD was required to submit to Congress within 30 days of the enactment of the FY2010 National Defense Authorization Act, the DOD Inspector General’s report on issues involving DOD’s conduct of A-76 competitions, and two Government Accountability Office (GAO) reports: one on DOD’s conduct of publicprivate competitions, and the other on DOD’s inventory of service contracts. All of these reports have been completed except the GAO assessment on the inventory of service contracts.

Some policymakers advocate an end to the moratorium on the conduct of DOD A-76 competitions. Questions about the moratorium are largely centered around to what extent the problems identified with Circular A-76 have been corrected, and whether the congressionally required reports have been completed and the issues resolved to the satisfaction of Congress.


Date of Report: January 18, 2012
Number of Pages: 35
Order Number: R40854
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Concurrent Receipt: Background and Issues for Congress

Charles A. Henning
Specialist in Military Manpower Policy

“Concurrent Receipt” refers to the simultaneous receipt of two types of monetary benefits: military retired pay and Department of Veterans Affairs (VA) disability compensation. Prior to 2004, existing laws and regulations dictated that a military retiree could not receive two payments from federal agencies for the same purpose. As a result, military retirees with physical disabilities recognized by the VA would have their retired pay “offset” or reduced dollar-for-dollar by the amount of their VA compensation.

Proponents for the concurrent receipt of both military retired pay and VA disability compensation have argued that these pays were for discrete and different purposes: military retired pay is postservice compensation for services rendered while VA compensation recognizes physical or mental disability incurred while in the service. Opponents have maintained that concurrent receipt is expensive, not supported by precedent and could result in the elimination of similar offsets between other federal programs.

Legislative activity on the issue of concurrent receipt began in the late 1980s and culminated in the provision for Combat-Related Special Compensation (CRSC) in the Bob Stump National Defense Authorization Act for FY2003 (P.L. 107-314). Successive legislation since then has extended concurrent receipt to additional eligible populations and further refined and clarified the program. While the legislation enacted in 2004 and later has incrementally expanded the eligible population, there are still nearly 550,000 military retirees who are receiving VA disability compensation but are not eligible for Concurrent Receipt. Determining whether to make some or all of this population eligible for concurrent receipt remains a key point of contention in Congress.

There are two common criteria that define eligibility for Concurrent Receipt: (1) all recipients must be military retirees and (2) they must also be eligible for VA disability compensation. There are two separate and distinct components that are commonly referred to as the Concurrent Receipt program: (1) Concurrent Retirement and Disability Payments (CRDP) and (2) Combat-Related Special Compensation (CRSC). A retiree cannot receive both CRSC and CRDP benefits. The retiree must choose whichever is most financially advantageous to him or her and may move back and forth between either benefit during an annual “open season”.

This report addresses the two primary components of the concurrent receipt program: Combat- Related Special Compensation (CRSC) and Concurrent Retirement and Disability Payments (CRDP). It reviews the possible legislative expansion of the program to additional populations and provide several potential options for Congress to consider.

Concurrent receipt continues to be one of the most misunderstood and controversial military retirement issues and one that remains the object of intense public and congressional interest.


Date of Report: January 17, 2012
Number of Pages: 27
Order Number: R40589
Price: $29.95

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Intelligence Authorization Legislation: Status and Challenges

Richard F. Grimmett
Specialist in International Security

Since President Bush signed the FY2005 Intelligence Authorization bill (P.L. 108-487) in December 2004, no subsequent intelligence authorization legislation was enacted until the FY2010 bill was signed by President Obama in October 2010 (after the end of FY2010), becoming P.L. 111-259. Although the National Security Act requires intelligence activities to be specifically authorized, this requirement has been satisfied in recent years by one-sentence catchall provisions in defense appropriations acts authorizing intelligence activities. This procedure meets the statutory requirement but has, according to some observers, weakened the ability of Congress to oversee intelligence activities.

In May 2011, Congress passed the Intelligence Authorization Act for FY2011, which did contain a classified schedule of authorizations; on June 8, the President signed the bill and it became P.L. 112-18. In December 2011, both the House and Senate passed H.R. 1892, the Intelligence Authorization for FY2012, which also contained a classified schedule. H.R. 1892 was signed into law by the President on January 3, 2012 (P.L. 112-87). The passage of these two bills appears to reflect a determination to underscore the continuing need for specific annual intelligence authorization legislation.

Annual intelligence authorization acts were first passed in 1978 after the establishment of the two congressional intelligence committees and were enacted every year until 2005. These acts provided specific authorizations of intelligence activities and were accompanied by reports that provided detailed guidance to the nation’s intelligence agencies. However, in practice, the absence of intelligence authorization acts has meant that key intelligence issues have been addressed in defense authorization acts and defense appropriations acts that focus primarily on the activities of the Department of Defense.

Several Members have maintained that this procedure has been characterized by misplaced priorities and wasteful spending estimates that could run into billions. One example is the eventual cancellation of a highly classified and very costly overhead surveillance system that had been approved without support from the two intelligence committees.

Some also argue that the ability to link together the collection and analytical efforts of intelligence agencies must extend well beyond the Defense Department given the challenges of the 21st century and that intelligence authorization legislation is essential to ensure the effectiveness of this linkage. When congressional approval of intelligence programs is limited to defense authorizations and appropriations legislation, the result arguably can be an overemphasis on military missions by the intelligence community.

Other observers counter, however, that, even without intelligence authorization acts, Congress makes its views known to the intelligence community and that defense authorization and appropriations acts continue to provide adequate legislative authority for major acquisition efforts of agencies that are in large measure integral parts of the Defense Department. Even with renewed enactment of intelligence authorization legislation in 2010 and 2011 many important intelligence issues are addressed in defense authorization and appropriations acts.


Date of Report: January 20, 2012
Number of Pages: 17
Order Number: R40240
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U.S. Special Operations Forces (SOF): Background and Issues for Congress

Andrew Feickert
Specialist in Military Ground Forces

Special Operations Forces (SOF) play a significant role in U.S. military operations, and the Administration has given U.S. SOF greater responsibility for planning and conducting worldwide counterterrorism operations. U.S. Special Operations Command (USSOCOM) has close to 60,000 active duty, National Guard, and reserve personnel from all four services and Department of Defense (DOD) civilians assigned to its headquarters, its four components, and one sub-unified command. The 2010 Quadrennial Defense Review (QDR) directs increases in SOF force structure, particularly in terms of increasing enabling units and rotary and fixed-wing SOF aviation assets and units.

Admiral William McRaven is the new USSOCOM commander. Admiral McRaven’s concerns include impacts on readiness as a result of high operational tempo for USSOCOM forces. High operational tempo is having a negative impact on language and cultural training and also has made it difficult for SOF personnel to attend requisite schools and training that are necessary to maintain proficiency in a variety of areas. In addition, a lack of access to U.S. based rotary/tilt wing aircraft needed to train air crews and SOF ground forces is also having a detrimental impact on training.

USSOCOM’s FY2012 Budget Request is $10.5 billion—with $7.2 billion in the baseline budget and $3.3 billion in the Overseas Contingency Operations (OCO) budget, representing an increase of 7% over the FY2011 Budget Request of $9.8 billion.

The National Defense Authorization Act for FY2012 (P.L. 112-81) authorized $10.4 billion for USSOCOM and contained a number of provisions. The provisions include a review of USSOCOM’s dry combat submersible programs; a prohibition on obligating funds for aviation foreign internal defense programs; establishment of an annual requirement for enabling forces; a study of SOF training ranges; re-designation of military information support operations; and a study on USSOCOM sub-unified command structure. The FY2012 Military Construction and Veterans Affairs and related Agencies Act (P.L. 112-74) includes reductions in funding for aviation foreign internal defense aircraft and equipment and requires cost estimates USSOCOM undersea mobility projects.

On January 5, 2012, the Administration unveiled its new strategic guidance refocusing U.S. strategic efforts to the Pacific and the Middle East and, at the same time, proposing significant cuts to ground forces. While there are presently few specifics known, this new strategic direction has the potential to significantly impact U.S. SOF. Of potential concern to Congress is that with fewer general purpose forces, SOF operational tempo might increase. While DOD maintains that it is willing to increase its investment in SOF, there are limitations on expansion because of stringent qualification and training standards. In addition, little is known how SOF would be employed under this new strategy and if it even has the ability to take on new mission requirements.

The further downsizing of ground forces (Army and Marines) also brings up concerns that the Services might be hard-pressed to establish and dedicate enabling units needed by USSOCOM while at the same time adequately supporting general purpose forces. An examination of proposed force structure in relation to anticipated requirements for enabling forces could prove useful to Congress.


Date of Report: January 11, 2012
Number of Pages: 16
Order Number: RS21048
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