DoD's $90M meal contract to SO-PAK-CO, Inc. shows potential value concerns and limited competition

Contract Overview

Contract Amount: $90,042,840 ($90.0M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2016-10-21

End Date: 2017-12-29

Contract Duration: 434 days

Daily Burn Rate: $207.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 4610029377!MEAL,INDIVIDUAL,POR

Place of Performance

Location: MULLINS, MARION County, SOUTH CAROLINA, 29574

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $90.0 million to SO-PAK-CO, INC for work described as: 4610029377!MEAL,INDIVIDUAL,POR Key points: 1. The contract's value appears high relative to the duration and scope, warranting further scrutiny. 2. Limited competition suggests potential for inflated pricing and reduced innovation. 3. The fixed-price contract type shifts risk to the contractor, but oversight is crucial. 4. Performance context is limited, but the contract was awarded to a single vendor. 5. This contract falls within the broader Defense Logistics Agency's food service and supply chain operations. 6. The contract's duration and value may indicate a significant operational requirement for the DoD.

Value Assessment

Rating: fair

The contract value of approximately $90 million over 1.3 years for individual meals suggests a high per-diem cost. Benchmarking against similar DoD contracts for ration support or individual meal provisions is necessary to determine if this represents a fair price. Without more granular data on the types of meals and delivery locations, a definitive value assessment is challenging, but the overall expenditure warrants careful review.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which is an unusual designation that implies initial broad competition was narrowed down. The presence of only one awardee, SO-PAK-CO, Inc., suggests limited competition for this specific delivery order. This limited competition could lead to less favorable pricing and terms for the government.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may have less leverage to negotiate favorable prices.

Public Impact

Service members in various locations will receive individual meals, supporting their operational readiness. The contract supports the Defense Logistics Agency's mission to provide logistical support to the armed forces. The geographic impact is likely widespread, depending on where the service members are deployed. Workforce implications include potential employment opportunities for those involved in food preparation, packaging, and distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpricing due to limited competition.
Lack of transparency in the 'exclusion of sources' process.
Risk of supply chain disruptions if the sole provider faces issues.
Ensuring consistent quality and nutritional value across all delivered meals.

Positive Signals

Contract awarded to a single entity, potentially streamlining management.
Fixed-price contract shifts some financial risk to the contractor.
The contract duration suggests a sustained need and potential for reliable service.

Sector Analysis

This contract falls within the broader food services and logistics sector, specifically supporting military operational needs. The market for military food supply is substantial, with agencies like the Defense Logistics Agency managing complex supply chains. Comparable spending benchmarks would involve analyzing other contracts for individual rations, catering services, and food distribution to military installations, both domestically and abroad.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor, SO-PAK-CO, Inc., may engage small businesses as subcontractors, though this information is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Logistics Agency's contracting officers and quality assurance representatives. Accountability measures would include performance monitoring against contract terms and delivery schedules. Transparency is facilitated through contract databases, but the specifics of the 'exclusion of sources' process may have limited public visibility. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Food and Subsistence Contracts
Military Rations and Food Service Contracts
Department of Defense Operational Support Contracts

Risk Flags

Limited competition may lead to higher costs.
Lack of detailed performance data.
Unclear justification for excluding sources.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.0 million to SO-PAK-CO, INC. 4610029377!MEAL,INDIVIDUAL,POR

Who is the contractor on this award?

The obligated recipient is SO-PAK-CO, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $90.0 million.

What is the period of performance?

Start: 2016-10-21. End: 2017-12-29.

What specific types of individual meals were procured under this contract, and what were the unit costs?

The contract data specifies 'MEAL,INDIVIDUAL,POR' (POR likely indicating 'Packaged Operational Rations' or similar). However, detailed breakdowns of meal types (e.g., breakfast, lunch, dinner, specific dietary options) and their associated unit costs are not provided in the summary data. The total award of $90,004,283.68 for 434 days suggests an average daily expenditure of approximately $207,472. This implies a significant volume of meals being procured daily. To assess value, a detailed breakdown of meal components, nutritional information, and cost per meal type would be essential.

How did the pricing of this contract compare to similar contracts awarded by the DoD or other federal agencies for individual meals?

Benchmarking this contract's pricing against similar federal procurements is crucial for a value assessment. Without access to a comprehensive database of comparable contracts, a direct comparison is difficult. However, the high total value and the limited competition suggest that the per-unit cost might be higher than if the contract had been more widely competed. Factors such as delivery location, required shelf-life, and specific meal components significantly influence pricing, making direct comparisons challenging without detailed specifications.

What were the specific reasons for excluding other sources, and what was the competitive landscape prior to this exclusion?

The contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while the initial solicitation may have been open, certain sources were subsequently excluded. The specific reasons for these exclusions are not detailed in the provided data. Typically, exclusions might be based on technical capabilities, past performance, or other criteria outlined in the solicitation. Understanding the number of initial bidders and the rationale for excluding them is critical to assessing whether the exclusion was justified and if it unduly limited competition, potentially impacting price discovery.

What is the track record of SO-PAK-CO, INC. in fulfilling similar government contracts, particularly regarding performance and delivery?

Information regarding SO-PAK-CO, INC.'s specific track record for this contract is not detailed in the summary data. A thorough assessment would require reviewing past performance evaluations, any reported delivery issues, or contract modifications associated with their previous government awards. Understanding their history with similar meal provisions or logistics contracts would provide insight into their reliability and ability to meet the demanding requirements of military operations.

What are the potential risks associated with relying on a single contractor for such a significant volume of individual meals?

Relying on a single contractor, SO-PAK-CO, INC., for a substantial volume of individual meals presents several risks. These include supply chain disruptions due to unforeseen events (e.g., natural disasters, labor disputes, financial instability of the contractor), potential for complacency leading to decreased quality or service, and limited leverage for the government in negotiating future terms or addressing performance issues. The government's contingency planning and robust oversight mechanisms are critical to mitigating these risks.

How does this contract's spending compare to historical spending patterns for individual meal provisions by the Defense Logistics Agency?

Analyzing historical spending patterns for individual meal provisions by the Defense Logistics Agency (DLA) is essential for context. Without access to DLA's historical procurement data, it's difficult to determine if the $90 million award represents an increase, decrease, or stable level of spending. Factors such as changes in troop levels, operational tempo, and food cost inflation would influence historical spending. A trend analysis over several fiscal years would reveal patterns and help assess the current contract's financial significance.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Fruit and Vegetable Canning

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unaka Company, Incorporated (UEI: 003374477)

Address: 118 S CYPRESS ST, MULLINS, SC, 29574

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $90,042,840

Exercised Options: $90,042,840

Current Obligation: $90,042,840

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ112

IDV Type: IDC

Timeline