DoD's $17.6M health and beauty products contract awarded to Kimberly-Clark Corporation shows no competition

Contract Overview

Contract Amount: $17,652,902 ($17.7M)

Contractor: Kimberly-Clark Corporation

Awarding Agency: Department of Defense

Start Date: 2009-10-01

End Date: 2009-12-31

Contract Duration: 91 days

Daily Burn Rate: $194.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - HEALTH AND BEAUTY PRODUCTS

Place of Performance

Location: NEENAH, WINNEBAGO County, WISCONSIN, 54956

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to KIMBERLY-CLARK CORPORATION for work described as: RESALE - HEALTH AND BEAUTY PRODUCTS Key points: 1. The contract was awarded on a non-competitive basis, raising questions about potential value for money. 2. Limited competition may lead to higher prices than if the contract were openly competed. 3. The contract duration of 91 days is relatively short, suggesting a potential for frequent re-competition or task order adjustments. 4. The award was a delivery order under an existing contract, indicating a potential for established relationships and pricing. 5. The product category, health and beauty products, is generally subject to market fluctuations and competitive pricing. 6. The absence of small business set-aside flags suggests this contract did not prioritize small business participation. 7. The fixed-price contract type shifts risk to the contractor, which can be beneficial for the government if priced appropriately.

Value Assessment

Rating: questionable

Benchmarking the value of this $17.6 million contract for health and beauty products is challenging without comparable contract data or detailed pricing breakdowns. The fact that it was not competed raises concerns about whether the government secured the best possible price. While a firm-fixed-price contract type is generally favorable, the lack of competition means it's difficult to assess if the price reflects market rates or if there was an opportunity for better value through a competitive process. The short duration of 91 days also makes it hard to establish long-term value trends.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source or limited competition procurement. This means that only one vendor, Kimberly-Clark Corporation, was solicited or considered for this award. The lack of open competition limits the government's ability to leverage market forces to drive down prices and ensure the most innovative solutions are considered. It suggests specific circumstances or justifications were cited for not pursuing a broader solicitation.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects true market value, potentially leading to less efficient use of public funds.

Public Impact

Service members and their families stationed in Wisconsin will benefit from the availability of essential health and beauty products through military commissaries. The contract ensures the supply of a range of health and beauty items, contributing to the morale and well-being of military personnel. The Defense Commissary Agency (DeCA) is the primary beneficiary, managing the distribution and sale of these products. The contract supports the retail operations of military commissaries, a key benefit for the military community.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant dollar amount raises concerns about price reasonableness and potential overpayment.
The sole-source nature of the award prevents an assessment of the contractor's performance against potential competitors.
Limited transparency into the justification for sole-source award makes it difficult to evaluate the necessity of this approach.
The short contract duration could indicate a stop-gap measure or an inability to plan for longer-term needs competitively.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, assuming the price was negotiated effectively.
The award was a delivery order, suggesting it was part of a pre-existing framework that may have had some level of vetting.
The products supplied are essential for the well-being of military personnel and their families, fulfilling a critical need.

Sector Analysis

The wholesale trade of drugs and druggists' sundries (NAICS 424210) is a substantial sector within the broader retail and wholesale industries. This contract falls under the category of reselling health and beauty products, which are common consumer goods. The Defense Commissary Agency (DeCA) operates a retail network that requires consistent supply chain management for a wide array of products, including personal care items. Comparable spending in this sector by large retailers or government entities would typically involve competitive bidding to secure favorable pricing on high-volume goods.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to Kimberly-Clark Corporation, a large established company, suggests that small businesses were likely not primary participants in this specific procurement. Subcontracting opportunities for small businesses are not explicitly mentioned, and given the nature of the award and the product category, it is unlikely that significant subcontracting was a requirement or a focus.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Commissary Agency (DeCA) and potentially the Department of Defense's Inspector General if specific concerns or irregularities were raised. Transparency is limited due to the sole-source nature of the award, making it difficult to assess the full extent of oversight applied during the procurement process. Accountability would be measured by the successful delivery of products as specified in the contract terms.

Related Government Programs

Defense Commissary Agency Operations
Wholesale Trade of Health and Beauty Products
Federal Retail Operations

Risk Flags

Sole-source award without clear justification
Potential for non-competitive pricing
Limited transparency into procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to KIMBERLY-CLARK CORPORATION. RESALE - HEALTH AND BEAUTY PRODUCTS

Who is the contractor on this award?

The obligated recipient is KIMBERLY-CLARK CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

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

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source awards. However, the specific justification (e.g., urgency, unique capabilities, lack of market research indicating other sources) is not detailed in the provided snippet. Typically, federal agencies must document and justify sole-source procurements to ensure they are necessary and that the government is still seeking fair and reasonable pricing. Without this documentation, it's impossible to fully assess the rationale behind bypassing a competitive process for this $17.6 million award.

How does the pricing of this contract compare to similar health and beauty product contracts awarded competitively?

Direct comparison is difficult without access to specific pricing data for this contract and comparable competitively awarded contracts. However, the general principle in government contracting is that competitive bidding leads to lower prices than sole-source awards. The absence of competition for this $17.6 million contract suggests that the government may not have achieved the most favorable pricing possible. A thorough analysis would require benchmarking unit prices against other DeCA contracts or similar large-scale procurements for health and beauty items, considering factors like volume, delivery terms, and product specifications.

What is Kimberly-Clark Corporation's track record with the Defense Commissary Agency and other federal agencies?

Kimberly-Clark Corporation is a large, established manufacturer and distributor of consumer goods, including health and beauty products. While specific details of their past performance with DeCA are not in the provided data, their presence as a sole-source awardee suggests a pre-existing relationship or a recognized capability to supply these items. A comprehensive review would involve examining their contract history, past performance evaluations (if publicly available), and any reported issues or successes in fulfilling government requirements across various agencies.

What are the potential risks associated with awarding a contract for essential goods like health and beauty products on a sole-source basis?

The primary risk associated with sole-source awards for essential goods is the potential for inflated prices due to the lack of competitive pressure. This can lead to a less efficient use of taxpayer funds. Additionally, it can stifle innovation, as contractors may have less incentive to offer cost-saving improvements or new product lines when they are the only option. There's also a risk of complacency, where the incumbent contractor might not prioritize service or cost-effectiveness as rigorously as they would in a competitive environment. For essential items, ensuring a reliable supply chain is critical, and a sole-source award might not always guarantee the most robust or cost-effective supply chain.

How does the $17.6 million spending on health and beauty products compare to historical spending patterns for this category by the Defense Commissary Agency?

The provided data only reflects a single delivery order of $17.6 million with a 91-day duration, not the total annual or historical spending for health and beauty products by the Defense Commissary Agency (DeCA). To assess historical patterns, one would need to aggregate spending data over multiple years, identify all contracts related to health and beauty products, and analyze trends in award values, competition levels, and pricing. This single data point does not provide sufficient context to determine if $17.6 million is high, low, or typical for this category over time.

Industry Classification

NAICS: Wholesale Trade › Drugs and Druggists' Sundries Merchant Wholesalers › Drugs and Druggists' Sundries Merchant Wholesalers

Product/Service Code: MISCELLANEOUS

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: 401 N WAKE ST, NEENAH, WI, 54956

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

Financial Breakdown

Contract Ceiling: $17,652,902

Exercised Options: $17,652,902

Current Obligation: $17,652,902

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3828

IDV Type: IDC

Timeline