DoD's $19.3M grocery resale contract awarded to Conagra Foods for general line wholesale distribution

Contract Overview

Contract Amount: $19,342,177 ($19.3M)

Contractor: Conagra Foods Packaged Foods C

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2010-06-30

Contract Duration: 90 days

Daily Burn Rate: $214.9K/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 $19.3 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. Value for money assessed through comparison to similar wholesale grocery contracts. 2. Competition dynamics indicate a sole-source award, potentially impacting price discovery. 3. Risk indicators include the short duration and fixed-price nature of the contract. 4. Performance context is within the Defense Commissary Agency's mission to provide groceries to military personnel. 5. Sector positioning is within wholesale trade, specifically for food products.

Value Assessment

Rating: fair

The contract's value of $19.3 million for a 90-day period suggests a significant volume of goods. Benchmarking against similar large-scale wholesale grocery contracts would be necessary to definitively assess value for money. The fixed-price structure aims to control costs, but without competitive bidding, it's difficult to ascertain if the price reflects optimal market rates. The absence of a specific Product and Service Code (PSC) makes direct comparison challenging.

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 approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances, they limit the government's ability to explore a wider range of pricing and service options.

Taxpayer Impact: Sole-source awards can potentially lead to higher prices for taxpayers as the benefit of competition, which drives down costs, is absent.

Public Impact

Military personnel and their families benefit from the availability of groceries through the Defense Commissary Agency. The contract ensures the supply of general line grocery items. The geographic impact is likely focused on military installations served by the Defense Commissary Agency. Workforce implications are primarily within Conagra Foods' distribution and logistics operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source awards can reduce transparency in the procurement process.
Short contract duration might indicate a need for immediate supply or a placeholder for future competition.

Positive Signals

Award to a known entity (Conagra Foods) suggests a potentially reliable supplier.
Fixed-price contract provides cost certainty for the government.
Contract supports the essential mission of providing goods to military families.

Sector Analysis

The wholesale trade sector, particularly for food products, is a critical component of the supply chain for various organizations, including government agencies. This contract falls under the general line grocery merchant wholesalers category. The Defense Commissary Agency relies on such contracts to ensure a steady supply of goods to its facilities, serving a significant population. Comparable spending benchmarks would involve analyzing other large-scale food distribution contracts awarded by government entities or major retailers.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large corporation, it is unlikely to involve significant subcontracting opportunities for small businesses within the scope of this specific delivery order. The primary impact is on the large prime contractor's operations.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting officers and potentially the Department of Defense's Inspector General. Accountability measures are usually tied to contract performance clauses and delivery schedules. Transparency is limited due to the sole-source nature of the award, with less public visibility into the negotiation and pricing compared to a competed contract.

Related Government Programs

Defense Commissary Agency Operations
Federal Food Procurement
Wholesale Grocery Distribution Contracts

Risk Flags

Sole-source award limits competition.
Lack of detailed performance metrics for this specific delivery order.
Short contract duration may indicate a temporary solution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 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 $19.3 million.

What is the period of performance?

Start: 2010-04-01. End: 2010-06-30.

What is Conagra Foods' track record with the Defense Commissary Agency and similar government contracts?

Conagra Foods has a history of supplying various food products to government agencies, including the Defense Commissary Agency (DECA). Their experience likely encompasses large-scale distribution and adherence to government procurement standards. Analyzing past performance reviews, delivery success rates, and any past disputes or corrective actions related to DECA or similar contracts would provide a clearer picture of their reliability and capability. Without specific data on this contract's performance, we infer general capabilities based on their market position and history with government entities. Their established presence suggests a capacity to fulfill such orders, but specific contract performance metrics are crucial for a definitive assessment.

How does the $19.3 million value compare to similar wholesale grocery contracts awarded by the government?

The $19.3 million value for a 90-day period is substantial, indicating a significant volume of goods. To benchmark this, one would compare it to other large-scale wholesale grocery contracts awarded by DECA or other federal agencies like the General Services Administration (GSA) or the Department of Agriculture. Factors such as the specific mix of grocery items, delivery locations, and contract duration would need to be considered for a precise comparison. However, generally, contracts of this magnitude suggest a high level of demand and a need for efficient, large-scale distribution capabilities. The absence of competitive bidding makes it harder to determine if this price point represents optimal value compared to what could have been achieved through a competitive process.

What are the primary risks associated with this sole-source award?

The primary risk associated with this sole-source award 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. Another risk is reduced transparency in the procurement process, making it harder to scrutinize the fairness of the price and terms. Furthermore, a sole-source award might indicate a lack of available alternative suppliers or a situation where only one supplier possesses the unique capabilities required, which could create dependency. The short duration also poses a risk if it's a stop-gap measure, potentially leading to repeated sole-source awards without addressing long-term strategic sourcing needs.

How effective is the Defense Commissary Agency in leveraging its purchasing power for grocery items?

The Defense Commissary Agency (DECA) aims to leverage its purchasing power to provide groceries to military members and their families at a significant savings compared to civilian retail prices. This is achieved through bulk purchasing and direct sourcing. The effectiveness can be measured by comparing commissary prices to average retail prices, tracking customer satisfaction, and monitoring the efficiency of their supply chain operations. Large contracts, even if sole-sourced in some instances, contribute to DECA's ability to negotiate volume discounts. However, the agency's overall effectiveness is also influenced by its ability to foster competition where feasible to ensure the best possible value and service.

What are the historical spending patterns for general line grocery wholesale distribution by the Department of Defense?

Historical spending patterns for general line grocery wholesale distribution by the Department of Defense (DoD) would likely show consistent, substantial investment to support military commissaries and other food service operations. This spending is driven by the continuous need to supply food products to a large, geographically dispersed population. Analyzing past contracts would reveal trends in award types (competitive vs. sole-source), average contract values, durations, and the primary suppliers. Fluctuations might be observed based on changes in military base populations, strategic priorities, or shifts in procurement strategies. Understanding these patterns helps in assessing the current contract's context and identifying potential areas for cost savings or improved efficiency in future procurements.

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: $19,342,177

Exercised Options: $19,342,177

Current Obligation: $19,342,177

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3356

IDV Type: IDC

Timeline