DoD awards Campbell Soup Company $19M contract for soups, raising questions about competition and value

Contract Overview

Contract Amount: $19,035,568 ($19.0M)

Contractor: Campbell Soup Company

Awarding Agency: Department of Defense

Start Date: 2009-10-01

End Date: 2009-12-31

Contract Duration: 91 days

Daily Burn Rate: $209.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - SOUPS (SECTION A)

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08103

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to CAMPBELL SOUP COMPANY for work described as: RESALE - SOUPS (SECTION A) Key points: 1. Contract awarded to a single, well-known brand suggests limited market exploration. 2. Pricing and value for money require deeper analysis against commercial equivalents. 3. Sole-source nature may indicate a lack of competitive pressure on pricing. 4. Short contract duration (91 days) might limit long-term strategic benefits. 5. Focus on commissary sales points to a specific consumer base within the military. 6. Lack of small business participation noted, with no set-aside or subcontracting mentioned.

Value Assessment

Rating: questionable

The contract value of approximately $19 million for a 91-day period for soups is substantial. Without direct comparison data for similar government contracts for bulk soup procurement, it's difficult to definitively benchmark value. However, the sole-source award to a single, established brand like Campbell's raises concerns about whether the government secured the most competitive pricing available. A competitive bidding process would typically yield better price discovery and potentially lower costs for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Campbell Soup Company, was solicited. The data indicates it was 'NOT AVAILABLE FOR COMPETITION.' This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified under specific circumstances (e.g., urgency, unique capabilities), they generally lead to less price competition and potentially higher costs.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings in government procurement.

Public Impact

Military personnel and their families shopping at commissaries are the primary beneficiaries, receiving access to Campbell's soup products. The contract ensures the availability of essential food items within the Defense Commissary Agency's supply chain. Geographic impact is primarily within New Jersey, where the contractor is based, and wherever commissaries are supplied. Workforce implications are likely concentrated within Campbell Soup Company's manufacturing and distribution operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award raises concerns about justification and potential for better deals elsewhere.
Limited contract duration might not reflect long-term supply needs or cost efficiencies.
No indication of small business involvement, missing opportunities for economic inclusion.

Positive Signals

Ensures supply of a recognized and potentially preferred brand for military consumers.
Award to an established company may imply reliability in delivery and product quality.
Firm Fixed Price contract type provides cost certainty for the government.

Sector Analysis

The food manufacturing and wholesale sector is highly competitive, with numerous suppliers of canned goods and soups. The Defense Commissary Agency (DECA) is a significant purchaser of food products for military installations worldwide. This contract, while substantial at $19 million, represents a small fraction of the overall food procurement market. Benchmarking against commercial wholesale prices for similar volumes would be necessary to assess value, but the sole-source nature limits direct comparison within the government contracting space.

Small Business Impact

This contract does not appear to have involved small business participation. There is no indication of a small business set-aside, nor is there information suggesting subcontracting opportunities for small businesses. This represents a missed opportunity to leverage the small business industrial base and potentially foster competition through set-aside awards.

Oversight & Accountability

The primary oversight for this contract would fall under the Department of Defense and the Defense Commissary Agency. As a delivery order under an unspecified basic agreement, oversight would focus on delivery, quality, and adherence to the firm fixed price terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Food Procurement
Department of Defense Food Services
General Line Grocery Merchant Wholesalers Contracts
Canned Goods and Soups Federal Supply

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
Limited transparency in procurement process.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to CAMPBELL SOUP COMPANY. RESALE - SOUPS (SECTION A)

Who is the contractor on this award?

The obligated recipient is CAMPBELL SOUP COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.0 million.

What is the period of performance?

Start: 2009-10-01. End: 2009-12-31.

What is the justification for awarding this contract on a sole-source basis to Campbell Soup Company?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. Without further documentation, the specific justification remains unclear. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. For a common item like soup, such justifications would require rigorous vetting to ensure no viable alternatives existed or that a competitive process was genuinely infeasible. The lack of competition raises concerns about whether the government explored all avenues to secure the best value.

How does the pricing of this contract compare to commercial market rates for similar quantities of soup?

Direct comparison to commercial market rates is challenging without specific product details (e.g., type of soup, packaging size) and volume discounts. However, the contract value of $19 million for a 91-day period suggests a significant volume. Given that Campbell's Soup Company is a major commercial brand, their pricing within the commercial sector might offer a benchmark. Government procurement often involves administrative costs and specific packaging requirements that can influence price. The absence of competition in this sole-source award makes it less likely that the government achieved the most favorable pricing achievable through a competitive process.

What are the risks associated with awarding a contract for essential food items on a sole-source basis?

The primary risk of a sole-source award for essential items like soup is the potential for overpayment due to the lack of competitive pressure. This can lead to inefficient use of taxpayer funds. Another risk is reduced innovation or responsiveness from the sole provider, as they face no direct competition for future business. Furthermore, it limits the government's ability to foster a broader supplier base, potentially excluding smaller or emerging businesses that could offer competitive alternatives or specialized products. Dependence on a single supplier can also create supply chain vulnerabilities.

What is the historical spending pattern with Campbell Soup Company for similar items within the Department of Defense?

The provided data only details this specific contract award. To understand historical spending patterns, a broader search of federal procurement databases (like FPDS or USASpending) would be necessary. This would involve looking for previous contracts awarded to Campbell Soup Company by the Department of Defense or the Defense Commissary Agency for soup or related grocery items. Analyzing past awards could reveal trends in contract types, values, competition levels, and pricing, providing context for the current sole-source award and whether it aligns with or deviates from historical practices.

What is the performance track record of Campbell Soup Company as a government contractor?

Campbell Soup Company is a well-established commercial entity with a long history. As a government contractor, their track record would typically be assessed based on past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS). Without access to these specific evaluations for this contract or related prior contracts, it's difficult to provide a detailed assessment. However, their longevity in the commercial market suggests a capacity for production and distribution. The sole-source nature of this award implies that either their past performance was deemed satisfactory, or the justification for sole-sourcing outweighed a formal performance review against competitors.

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 CAMPBELL PLACE SW4, CAMDEN, NJ, 08103

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,035,568

Exercised Options: $19,035,568

Current Obligation: $19,035,568

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3271

IDV Type: IDC

Timeline