Department of Defense awarded $17.3M for soybean processing, with J. M. Smucker Company as the sole provider

Contract Overview

Contract Amount: $17,366,238 ($17.4M)

Contractor: THE J. M. Smucker Company

Awarding Agency: Department of Defense

Start Date: 2010-01-01

End Date: 2010-03-31

Contract Duration: 89 days

Daily Burn Rate: $195.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - JAM/JELLY/SYRUP

Place of Performance

Location: ORRVILLE, WAYNE County, OHIO, 44667

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to THE J. M. SMUCKER COMPANY for work described as: RESALE - JAM/JELLY/SYRUP Key points: 1. Value for money is difficult to assess due to lack of competitive bidding. 2. The contract was awarded on a sole-source basis, limiting price discovery. 3. Risk indicators are moderate, primarily related to the lack of competition. 4. Performance context is limited to a short 89-day duration. 5. This contract falls within the food manufacturing and processing sector. 6. The J. M. Smucker Company is a large, established entity in this market.

Value Assessment

Rating: fair

The contract value of $17.3 million for soybean processing over 89 days appears substantial. However, without competitive bidding, it is challenging to benchmark the pricing against market rates or similar contracts. The sole-source nature prevents a direct comparison of value for money. The fixed-price contract type offers some cost certainty, but the absence of competition raises questions about whether the government achieved the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded directly to The J. M. Smucker Company. The reason for the sole-source award is not specified in the provided data. A sole-source award means there was no opportunity for other vendors to bid, which can limit price negotiation and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure to drive down prices. Without a competitive process, it's harder to ensure that taxpayer funds are being used in the most cost-effective manner.

Public Impact

The primary beneficiaries are likely military personnel and their families served by the Defense Commissary Agency, who receive processed soybean products. The services delivered include the processing of soybeans into various food products such as jam, jelly, and syrup. The geographic impact is primarily within the United States, supporting the Defense Commissary Agency's supply chain. Workforce implications are likely within The J. M. Smucker Company's existing operational structure, with no direct indication of new job creation for the government.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source award raises concerns about transparency and fairness in procurement.
Short contract duration might indicate a specific, limited need or a bridge contract.

Positive Signals

Award to a well-established company suggests reliability in product delivery.
Fixed-price contract provides cost predictability for the government.

Sector Analysis

The contract falls within the broader food manufacturing and processing industry, specifically focusing on soybean-derived products. The North American Industry Classification System (NAICS) code 311222 for Soybean Processing indicates a specialized segment. The market for processed food ingredients is competitive, but sole-source awards can bypass typical market dynamics. Comparable spending benchmarks for soybean processing contracts are not readily available without more specific market data.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no information on subcontracting (sb: false). This suggests that the award was made to a large business, and there is no explicit mechanism in place to ensure small business participation through subcontracting on this particular award.

Oversight & Accountability

Oversight mechanisms for this contract would typically fall under the purview of the Defense Commissary Agency and the Department of Defense's contracting oversight bodies. Accountability measures are inherent in contract terms and performance expectations. Transparency is limited due to the sole-source nature of the award, with details on the justification for this approach not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Operations
Food and Agricultural Procurement
Soybean Commodity Markets
Department of Defense Food Services

Risk Flags

Sole-source award lacks transparency.
Potential for non-competitive pricing.
Limited performance data due to short duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to THE J. M. SMUCKER COMPANY. RESALE - JAM/JELLY/SYRUP

Who is the contractor on this award?

The obligated recipient is THE J. M. SMUCKER COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

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

What was the specific justification for awarding this contract on a sole-source basis to The J. M. Smucker Company?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation from the Department of Defense or the Defense Commissary Agency, the exact rationale remains unknown. This lack of transparency is a common concern with sole-source procurements, as it limits the ability to verify if competition was truly not feasible or if it was simply bypassed.

How does the pricing of this contract compare to industry benchmarks for soybean processing?

Direct comparison to industry benchmarks is challenging without specific details on the exact products and quantities procured under this $17.3 million contract. The data only specifies 'RESALE - JAM/JELLY/SYRUP' and 'Soybean Processing'. The J. M. Smucker Company is a major food producer, and their pricing would reflect their scale and operational efficiencies. However, the absence of competitive bidding means this price was not tested against market alternatives. To assess value, one would need to compare the per-unit cost of specific items (e.g., per pound of jam) against similar bulk food contracts or commercial wholesale prices, adjusted for government-specific requirements and delivery logistics.

What are the potential risks associated with a sole-source award for essential food supplies?

The primary risk associated with a sole-source award for essential food supplies is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not be securing the most cost-effective solution. Additionally, reliance on a single supplier can create supply chain vulnerabilities; if the sole provider experiences production issues, quality control problems, or business disruptions, the Defense Commissary Agency could face shortages or compromised product quality. This also reduces leverage for the government in negotiating terms or addressing performance issues.

What is the historical spending pattern for soybean processing or similar food products by the Defense Commissary Agency?

The provided data only details a single contract award of $17.3 million for soybean processing products with an 89-day duration, awarded on January 1, 2010, and ending March 31, 2010. This limited snapshot does not provide sufficient information to establish a historical spending pattern. To understand historical spending, one would need to analyze procurement data over multiple years for the Defense Commissary Agency, looking at contracts for similar food categories (jams, jellies, syrups) and potentially other processed soybean products. This would reveal trends in contract values, award types (competitive vs. sole-source), and the number of suppliers utilized.

How does the contract duration of 89 days impact the assessment of value and risk?

The short duration of 89 days (approximately three months) for this $17.3 million contract is notable. It suggests that this award might have been for a specific, short-term need, perhaps to fulfill immediate requirements or as a bridge to a longer-term solution. From a value perspective, it's difficult to amortize fixed costs or establish long-term efficiencies. From a risk perspective, such a short term might indicate a less strategic procurement, potentially increasing the frequency of future contract actions and associated administrative burdens. It also limits the time for performance issues to manifest or be fully addressed.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean Processing

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: ONE STRAWBERRY LANE, ORRVILLE, OH, 44667

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,366,238

Exercised Options: $17,366,238

Current Obligation: $17,366,238

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0107G3563

IDV Type: IDC

Timeline