DoD's $59.3M MRE contract awarded to SO-PAK-CO, INC. shows fair value with 3 bidders

Contract Overview

Contract Amount: $59,314,520 ($59.3M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2012-11-30

End Date: 2013-12-30

Contract Duration: 395 days

Daily Burn Rate: $150.2K/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: 4523066919!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: MULLINS, MARION County, SOUTH CAROLINA, 29574, UNITED STATES OF AMERICA

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $59.3 million to SO-PAK-CO, INC for work described as: 4523066919!MEAL, READY-TO-EAT, IND, Key points: 1. Contract value of $59.3 million for MREs suggests a significant procurement for military rations. 2. The award to SO-PAK-CO, INC. indicates a competitive process with multiple bidders. 3. A firm fixed-price contract type generally offers predictable costs for the government. 4. The contract duration of approximately one year points to a focused supply need. 5. The North American Industry Classification System (NAICS) code 311421 suggests a focus on canned fruits and vegetables within the MRE. 6. The contract was awarded under 'Full and Open Competition After Exclusion of Sources', indicating a specific reason for excluding some sources initially but ultimately allowing broad competition.

Value Assessment

Rating: good

The contract's value of $59.3 million for MREs appears reasonable given the scale of military logistics. Benchmarking against similar large-scale ration procurements would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs, but the specific unit price is not provided for direct comparison. The award to a single contractor suggests they offered the best overall value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under 'Full and Open Competition After Exclusion of Sources', which implies an initial phase where certain sources might have been excluded, followed by a broader competition. With 3 bidders, the competition level appears moderate, suggesting that while multiple companies were interested, the market might not be saturated with potential suppliers for this specific type of MRE. This level of competition is generally sufficient to drive reasonable pricing.

Taxpayer Impact: A moderate level of competition with 3 bidders helps ensure that taxpayer funds are used efficiently by preventing excessive pricing. It indicates that the government received multiple offers, allowing for a selection based on best value rather than being limited to a single source.

Public Impact

Service members deployed domestically and internationally will receive essential nutritional support through these MREs. The contract ensures the availability of ready-to-eat meals, critical for operational readiness and troop morale. The primary beneficiaries are the men and women of the U.S. Armed Forces. The geographic impact is broad, potentially covering various military installations and deployment locations worldwide. The contract supports jobs within the food manufacturing and logistics sectors, particularly at SO-PAK-CO, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type warrants further investigation to understand if it limited potential competition unnecessarily.
Lack of detailed unit pricing makes it difficult to assess granular value for money.
The contract duration is relatively short (approx. 1 year), which might lead to frequent re-competition and associated administrative costs.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost certainty for the government.
Multiple bidders (3) suggest a degree of market interest and potential for competitive pricing.
The contractor, SO-PAK-CO, INC., was selected, implying they met the government's requirements effectively.

Sector Analysis

The procurement falls within the Food and Beverage Manufacturing sector, specifically canned goods. The overall market for military rations is substantial, driven by the logistical needs of armed forces globally. This contract represents a portion of the Department of Defense's significant annual spending on subsistence and operational supplies. Comparable spending benchmarks would involve analyzing other large-scale contracts for military rations or similar food service provisions to the government.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting requirements mentioned in the provided data. The award to SO-PAK-CO, INC. does not specify if it is a small business itself. Further analysis would be needed to determine if small businesses were involved as subcontractors or if this contract was specifically excluded from small business participation goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The firm fixed-price nature of the contract simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed cost breakdowns may not always be publicly available.

Related Government Programs

Military Rations Procurement
Department of Defense Subsistence
Food and Beverage Manufacturing Contracts
Logistics and Supply Chain Services

Risk Flags

Potential for cost overruns if raw material prices increase significantly.
Risk of contractor underperformance if production or logistical challenges are underestimated.
Limited flexibility to incorporate changes or improvements once the contract is awarded.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.3 million to SO-PAK-CO, INC. 4523066919!MEAL, READY-TO-EAT, IND,

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 $59.3 million.

What is the period of performance?

Start: 2012-11-30. End: 2013-12-30.

What is the historical spending pattern for MREs by the Defense Logistics Agency?

Historical spending data for MREs by the Defense Logistics Agency (DLA) reveals a consistent and significant investment in troop nutrition. Over the past decade, DLA has awarded numerous contracts for various types of MREs, often in the hundreds of millions of dollars annually, to ensure global operational readiness. Spending fluctuates based on deployment levels, strategic needs, and the introduction of new ration technologies. For instance, major operational periods often see increased demand and, consequently, higher contract values. Analyzing trends shows a steady reliance on MREs as a core component of military logistics, with contract values often ranging from $50 million to over $150 million per year, depending on the specific contract vehicles and quantities procured. This particular $59.3 million award fits within the typical range for a single, large MRE contract.

How does the price per MRE unit in this contract compare to industry benchmarks?

Without specific unit pricing data for this $59.3 million contract, a direct comparison to industry benchmarks is not possible. However, MREs are complex products involving specialized packaging, shelf-stability requirements, and nutritional standards, which typically command a higher price than standard commercial food items. Industry benchmarks for bulk-purchased, shelf-stable military rations can vary widely based on specific components, nutritional content, and packaging technology. Generally, prices can range from $5 to $15 per MRE unit, depending on these factors and the scale of the procurement. The number of bidders (3) and the 'full and open competition' aspect suggest the pricing was likely competitive within the specialized market for military rations.

What are the key performance indicators (KPIs) used to evaluate contractor performance for MRE contracts?

Key performance indicators (KPIs) for MRE contracts typically focus on ensuring the quality, timeliness, and suitability of the rations. Critical KPIs include on-time delivery rates to designated military depots or operational areas, adherence to strict quality control standards (e.g., absence of defects, proper packaging integrity), compliance with nutritional specifications, and shelf-life validity. Contractors are also evaluated on their ability to meet production schedules and respond to potential surges in demand. Performance is often measured through metrics like defect rates, delivery timeliness scores, and customer satisfaction surveys from military units. Failure to meet these KPIs can result in penalties, reduced future contract opportunities, or even contract termination.

What is the track record of SO-PAK-CO, INC. in fulfilling government contracts, particularly for food supplies?

SO-PAK-CO, INC. has a history of fulfilling government contracts, including those related to food supplies. Publicly available data indicates previous awards for various food items, suggesting experience in meeting government procurement standards and logistical requirements. While specific details on past performance metrics for this particular contractor are not detailed here, their ability to secure this significant MRE contract implies a satisfactory track record in previous dealings with agencies like the Defense Logistics Agency. Government contract databases often track contractor performance ratings, which would provide a more in-depth view of their reliability, quality of goods, and adherence to delivery schedules on prior awards.

What are the potential risks associated with a firm fixed-price contract for MREs?

While firm fixed-price (FFP) contracts offer cost certainty to the government, they carry potential risks, primarily for the contractor. For MREs, risks include unforeseen increases in raw material costs (e.g., agricultural commodities, packaging materials) or labor expenses that could erode the contractor's profit margin if not adequately accounted for in the initial bid. If the contractor underestimated production complexities or logistical challenges, they might incur losses. Conversely, for the government, the risk is that the contractor may have built significant contingency into their price to cover these potential contractor risks, potentially leading to a higher overall price than might be achieved under a cost-reimbursable contract, although FFP generally incentivizes efficiency.

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, Labor Surplus Area Firm, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,314,520

Exercised Options: $59,314,520

Current Obligation: $59,314,520

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM3S112DZ108

IDV Type: IDC

Timeline