DoD's $20.6M grocery resale contract awarded to Conagra Foods for assorted items

Contract Overview

Contract Amount: $20,595,139 ($20.6M)

Contractor: Conagra Foods Packaged Foods C

Awarding Agency: Department of Defense

Start Date: 2010-01-01

End Date: 2010-03-31

Contract Duration: 89 days

Daily Burn Rate: $231.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - ASSORTED GROCERY

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68102

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. Contract awarded for essential grocery items, supporting military personnel and families. 2. The contract value is significant, indicating a substantial need for these goods. 3. Limited competition suggests potential for higher pricing, requiring careful cost analysis. 4. The short duration of the delivery order may indicate a need for rapid fulfillment. 5. Fixed-price contract type offers cost certainty for the government. 6. The award falls under wholesale grocery distribution, a critical support function.

Value Assessment

Rating: fair

The contract value of $20.6 million for a 3-month period is substantial. Benchmarking this against similar grocery resale contracts is difficult without more specific product details. However, the 'General Line Grocery Merchant Wholesalers' NAICS code suggests a broad category. The fixed-price nature provides cost predictability, but the lack of competition raises concerns about whether the government secured the best possible price. Further analysis would require comparing unit prices for specific items against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Conagra Foods, was considered. This significantly limits price discovery and negotiation opportunities. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities or urgent needs), they generally lead to higher costs for the government compared to fully competed contracts. The absence of multiple bidders means taxpayers do not benefit from competitive pressures that drive down prices.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as competitive bidding processes are bypassed, potentially leading to less favorable pricing.

Public Impact

Military personnel and their families stationed at the relevant Defense Commissary Agency (DECA) locations benefit from access to essential grocery items. The contract ensures the availability of a wide range of assorted grocery products. The geographic impact is tied to the specific DECA facilities served by this contract, likely within Nebraska given the state code. The contract supports jobs within Conagra Foods and its distribution network, as well as potentially within the commissary system itself.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in pricing due to limited competition.
Short contract duration might indicate reactive procurement rather than strategic planning.

Positive Signals

Ensures availability of essential goods for military families.
Fixed-price contract provides budget certainty.
Award to a known entity like Conagra Foods may imply established supply chain reliability.

Sector Analysis

The grocery wholesale industry is a mature and competitive sector. This contract falls under the 'General Line Grocery Merchant Wholesalers' category. The Defense Commissary Agency (DECA) is a significant buyer within this sector, aiming to provide goods at cost-plus-a-small-surcharge to military personnel. The total market for grocery wholesale is vast, with federal contracts representing a small but important segment, often focused on specific institutional needs.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a sole-source award to a large corporation like Conagra Foods, it is unlikely that significant subcontracting opportunities for small businesses were mandated or explored. This contract does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA) contracting officers and potentially the Department of Defense Inspector General. Transparency is limited due to the sole-source nature. Accountability relies on DECA's contract management and performance monitoring to ensure delivery of goods as specified. The fixed-price contract type provides a degree of financial accountability.

Related Government Programs

Defense Commissary Agency Operations
Military Resale Operations
Food Distribution Contracts
Wholesale Grocery Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to CONAGRA FOODS PACKAGED FOODS C. RESALE - ASSORTED GROCERY

Who is the contractor on this award?

The obligated recipient is CONAGRA FOODS PACKAGED FOODS C.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.6 million.

What is the period of performance?

Start: 2010-01-01. End: 2010-03-31.

What is the historical spending pattern for Conagra Foods with the Defense Commissary Agency?

Analyzing historical spending patterns for Conagra Foods with the Defense Commissary Agency (DECA) requires access to detailed contract databases. Without specific historical data for this vendor and agency, it's difficult to provide a precise trend. However, DECA typically engages in numerous contracts for various food items to support military commissaries. If Conagra Foods is a regular supplier, spending could be consistent over time, potentially fluctuating based on product needs, market prices, and competition for specific contract vehicles. A review of past awards would reveal if this $20.6 million contract represents a typical award size or a significant increase/decrease in spending.

How does the pricing of this contract compare to similar grocery contracts awarded by other federal agencies?

Direct price comparison is challenging without knowing the exact mix of grocery items included in this $20.6 million contract and their specific quantities. Federal agencies procure groceries through various channels, including commissary systems, military dining facilities, and other institutional settings. Pricing can vary significantly based on volume, delivery locations, contract type (fixed-price vs. cost-plus), and competition levels. A sole-source award, as in this case, inherently limits the ability to benchmark against competitively bid contracts. To perform a robust comparison, one would need to identify comparable contracts for similar product categories and assess unit prices, factoring in any differences in contract terms and conditions.

What are the specific risks associated with a sole-source award for essential grocery items?

The primary risk associated with a sole-source award for essential grocery items is the potential for inflated pricing due to the lack of competition. Taxpayers may end up paying more than necessary. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, potentially reducing flexibility and leverage in future negotiations. Furthermore, without competitive pressure, there might be less incentive for the sole-source provider to innovate or offer superior service levels. Ensuring fair and reasonable pricing in sole-source situations requires rigorous justification and thorough cost analysis by the procuring agency.

What is the typical duration for Defense Commissary Agency grocery supply contracts?

The duration for Defense Commissary Agency (DECA) grocery supply contracts can vary widely depending on the nature of the procurement. Contracts can range from short-term delivery orders, like the 89-day period for this specific $20.6 million award (January 1, 2010 - March 31, 2010), to longer-term requirements contracts that might span several years with options. Short durations are often used for immediate needs, specific events, or to test a supplier's capability. Longer-term contracts are generally preferred for predictable, ongoing supply chains to ensure stability and potentially achieve better pricing through economies of scale. The 89-day duration here suggests a specific, time-bound need rather than a continuous, long-term supply agreement.

How does the 'General Line Grocery Merchant Wholesalers' NAICS code impact the scope of this contract?

The North American Industry Classification System (NAICS) code 424410, 'General Line Grocery Merchant Wholesalers,' defines the primary business activity of the contractor. For this contract, it signifies that Conagra Foods is acting as a wholesaler providing a broad range of grocery products. This scope implies that the contract covers a diverse inventory, not limited to a single product category (like canned goods or frozen foods). It suggests the Defense Commissary Agency is sourcing a comprehensive selection of everyday grocery items through this vendor, encompassing various departments typically found in a supermarket, such as dry goods, dairy, and potentially some fresh items, depending on the wholesaler's specific capabilities.

Industry Classification

NAICS: Wholesale Trade › Grocery and Related Product Merchant Wholesalers › General Line Grocery Merchant Wholesalers

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 CONAGRA DR, OMAHA, NE, 68102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,595,139

Exercised Options: $20,595,139

Current Obligation: $20,595,139

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3356

IDV Type: IDC

Timeline