DoD's $16.8M Pet Food Contract with Nestle Purina Raises Questions on Competition and Value

Contract Overview

Contract Amount: $16,812,981 ($16.8M)

Contractor: Nestle Purina Petcare CO

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2010-06-30

Contract Duration: 90 days

Daily Burn Rate: $186.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - PET FOOD

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63102

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to NESTLE PURINA PETCARE CO for work described as: RESALE - PET FOOD Key points: 1. Significant spending on pet food by the Defense Commissary Agency. 2. Sole reliance on Nestle Purina PetCare Co. for this contract. 3. Potential for inflated costs due to lack of competitive bidding. 4. The sector is dog and cat food manufacturing, a common consumer good.

Value Assessment

Rating: questionable

The contract value of $16.8M for a 90-day period is substantial. Without competitive pricing data or benchmarks for pet food procurement, it's difficult to definitively assess value. The firm fixed price suggests cost certainty, but the lack of competition is a concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and negotiation leverage, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be overpaying for pet food, as there was no market pressure to drive down prices.

Public Impact

Military families relying on commissary services for pet food may face higher prices due to the lack of competition. Taxpayer funds are being spent without the assurance of the best possible price. The Defense Commissary Agency's procurement practices for essential goods like pet food warrant closer examination.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Lack of clear value assessment
Potential for overpayment

Positive Signals

Firm fixed price contract provides cost certainty

Sector Analysis

The Defense Commissary Agency procures a wide range of goods, including pet food, to support military families. Spending benchmarks for pet food procurement are not readily available, but the scale of this contract suggests a significant demand.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, which limits opportunities for smaller enterprises in the pet food manufacturing sector to secure government contracts.

Oversight & Accountability

The sole-source nature of this award raises questions about the oversight processes within the Defense Commissary Agency to ensure competitive sourcing whenever possible. Further review is needed to understand why this contract was not opened to competition.

Related Government Programs

Dog and Cat Food Manufacturing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award limits competition
Lack of price transparency
Potential for overpayment
No small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to NESTLE PURINA PETCARE CO. RESALE - PET FOOD

Who is the contractor on this award?

The obligated recipient is NESTLE PURINA PETCARE CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

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

What is the justification for awarding this pet food contract on a sole-source basis to Nestle Purina?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source justification was made. However, the specific reasons for this determination are not detailed. Typically, sole-source awards are justified by factors such as unique capabilities, urgent needs, or lack of adequate competition. Without further information, it's impossible to verify the validity of this justification.

How does the per-unit cost of this pet food compare to commercially available prices or other government contracts?

A direct per-unit cost benchmark is not available in the provided data. The contract is for 'Dog and Cat Food Manufacturing' with a total value of $16.8M over 90 days. Without specific product details or unit quantities, a meaningful comparison to commercial prices or other contracts is not feasible. The lack of competition further hinders price validation.

What is the potential financial impact on taxpayers due to the lack of competition for this contract?

The primary financial impact on taxpayers stems from the absence of competitive bidding. When a contract is sole-sourced, the government loses the opportunity to leverage market competition to secure the lowest possible price. This can lead to inflated costs, meaning taxpayer money is spent less efficiently than it could be if multiple vendors had competed for the contract.

Industry Classification

NAICS: Manufacturing › Animal Food Manufacturing › Dog and Cat Food Manufacturing

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: 801 CHOUTEAU AVE, SAINT LOUIS, MO, 63102

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

Financial Breakdown

Contract Ceiling: $16,812,981

Exercised Options: $16,812,981

Current Obligation: $16,812,981

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G3930

IDV Type: IDC

Timeline