DoD's $18.7M grocery contract awarded to Conagra Foods for miscellaneous items

Contract Overview

Contract Amount: $18,669,420 ($18.7M)

Contractor: Conagra Foods Packaged Foods, LLC

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2011-03-31

Contract Duration: 89 days

Daily Burn Rate: $209.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - MISCELLANEOUS GROCERY

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68122

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to CONAGRA FOODS PACKAGED FOODS, LLC for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Contract awarded for essential grocery supplies, indicating a need for consistent provisioning. 2. The contract value suggests a significant volume of goods, impacting supply chain logistics. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. Fixed-price contract type offers cost certainty for the government but may limit flexibility. 5. The short duration of the delivery order points to a specific, immediate need rather than long-term provisioning. 6. The award falls under wholesale grocery distribution, a critical but often overlooked sector for military support.

Value Assessment

Rating: fair

The contract value of $18.7 million for a 3-month period is substantial, suggesting a high volume of goods. Without comparable contract data for similar 'miscellaneous grocery' provisions, a precise value-for-money assessment is challenging. However, the fixed-price nature provides cost predictability. The absence of competition in this award warrants further scrutiny to ensure fair market pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available, or in cases of urgent need. The lack of competition means there was no opportunity for price negotiation or comparison against other potential suppliers, which could lead to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competitive bidding to secure the best possible prices, potentially resulting in less favorable terms for taxpayers.

Public Impact

Service members and their families stationed at facilities served by the Defense Commissary Agency benefit from the availability of these grocery items. The contract ensures the supply of miscellaneous grocery products, contributing to the overall morale and well-being of personnel. The geographic impact is tied to the locations served by the Defense Commissary Agency, primarily military bases. This contract supports the logistics and distribution workforce within the Defense Commissary Agency and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can indicate potential market failures or barriers to entry for other suppliers.
Limited transparency in pricing due to the absence of competitive bids.

Positive Signals

Ensures essential goods are provided to military personnel and families.
Fixed-price contract offers budget certainty.
Award to an established supplier may indicate reliability in delivery.

Sector Analysis

The grocery wholesale sector is characterized by large distributors and complex supply chains. This contract falls under the 'General Line Grocery Merchant Wholesalers' category (NAICS 424410). The Defense Commissary Agency (DeCA) plays a significant role in providing goods to military communities, often operating with unique logistical challenges. Benchmarking this specific contract is difficult without more granular data on 'miscellaneous grocery' items, but the overall value suggests a substantial portion of DeCA's procurement needs for this category.

Small Business Impact

This contract was awarded directly to Conagra Foods Packaged Foods, LLC, and there is no indication of a small business set-aside. The value of the contract suggests it is unlikely to be subcontracted to small businesses for the primary fulfillment of the goods, though smaller suppliers might be part of Conagra's broader supply chain. The direct award to a large corporation bypasses opportunities for small businesses to compete for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Commissary Agency (DeCA), which is responsible for managing commissary operations and procurements. Accountability measures would include performance monitoring against delivery schedules and product quality standards. Transparency is limited due to the sole-source nature of the award, with less public visibility into the negotiation and pricing justification compared to a competitively bid contract. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Commissary Agency Operations
Military Food Service Contracts
Grocery Wholesale Procurement
Federal Supply Chain Management

Risk Flags

Sole-source award lacks competitive pricing.
Potential for above-market pricing due to lack of competition.
Limited transparency in contract justification and pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to CONAGRA FOODS PACKAGED FOODS, LLC. RESALE - MISCELLANEOUS GROCERY

Who is the contractor on this award?

The obligated recipient is CONAGRA FOODS PACKAGED FOODS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2011-01-01. End: 2011-03-31.

What is the historical spending pattern for 'RESALE - MISCELLANEOUS GROCERY' by the Defense Commissary Agency?

Analyzing historical spending for 'RESALE - MISCELLANEOUS GROCERY' by the Defense Commissary Agency (DeCA) is crucial for understanding trends and identifying potential anomalies. While specific data for this exact category over multiple years is not provided, DeCA's overall budget and procurement activities indicate a consistent need for a wide range of food and household items to support military communities. Past contracts, even if for different specific items or broader categories, would reveal patterns in vendor selection, contract values, and duration. A significant increase or decrease in spending for miscellaneous groceries could signal changes in inventory management, demand, or strategic sourcing. Without access to DeCA's historical procurement databases or detailed contract award histories, a precise analysis of spending patterns for this specific sub-category remains speculative. However, the general trend for military resale operations is towards optimizing supply chains for cost-effectiveness and availability, suggesting that DeCA would aim for stable or optimized spending in this area.

How does the per-unit cost of items under this contract compare to commercial market rates?

Determining the precise per-unit cost comparison for items under this 'RESALE - MISCELLANEOUS GROCERY' contract is challenging without itemized pricing data. The contract is a Delivery Order under a larger agreement, and the 'miscellaneous' nature implies a broad range of products. However, the fact that it was awarded sole-source to Conagra Foods Packaged Foods, LLC, raises a flag regarding potential deviations from commercial market rates. Competitive bidding typically drives prices down towards market equilibrium. In a sole-source scenario, the government relies on the contractor's pricing, which may or may not reflect the most competitive options available. To perform a robust comparison, one would need to: 1) identify the specific items procured, 2) obtain their commercial prices from major retailers or wholesale distributors, and 3) compare these against the effective per-unit prices derived from the contract value and estimated quantities. Given the sole-source nature, it is plausible that the per-unit costs are higher than what might be achieved through open competition.

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

A sole-source award for essential grocery supplies, such as this $18.7 million contract to Conagra Foods, carries several risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from the price discovery mechanism inherent in competitive bidding. This means taxpayers may be paying more than necessary for these goods. Secondly, it can reduce the incentive for the awarded contractor to maintain high service levels or product quality, as there is no immediate threat of losing the business to a competitor. Thirdly, it may stifle innovation and limit the availability of alternative products or suppliers that could potentially offer better value or meet specific needs more effectively. Finally, sole-source awards can sometimes indicate underlying issues with market access or contractor relationships, potentially masking inefficiencies or a lack of proactive market research by the procuring agency.

What is Conagra Foods' track record with the Defense Commissary Agency and other federal agencies?

Conagra Foods, Inc., and its subsidiaries, including Conagra Foods Packaged Foods, LLC, have a significant history of supplying food products to various federal agencies, including the Department of Defense (DoD) and specifically the Defense Commissary Agency (DeCA). Their track record generally involves providing a wide array of branded and private-label food items. Federal procurement databases often show numerous awards to Conagra for food supplies, ranging from small individual orders to large, multi-year contracts. While specific performance metrics for each contract are not always publicly detailed, their continued success in securing federal contracts suggests a generally satisfactory performance history in terms of product quality, delivery, and compliance. However, like any large supplier, there may have been instances of minor disputes, delivery delays, or quality control issues across their extensive federal dealings, which would be documented in contract performance reports.

How does this contract fit into the broader context of military food service and logistics?

This contract for 'RESALE - MISCELLANEOUS GROCERY' is a component of the larger military food service and logistics ecosystem, specifically managed by the Defense Commissary Agency (DeCA). DeCA's mission is to provide high-quality groceries to military members, retirees, and their families at prices generally 25% lower than civilian supermarkets. This contract ensures that a range of essential grocery items are available through commissary channels. The value of $18.7 million for a 3-month period indicates a substantial volume, likely serving multiple installations or a large customer base. It complements other food procurement efforts, such as those for dining facilities (e.g., mess halls) managed by different branches of the DoD. The efficient procurement and distribution of these goods are critical for maintaining the morale, readiness, and overall well-being of the armed forces and their families.

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: 7350 WORLD COMMUNICATIONS DR, OMAHA, NE, 68122

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

Financial Breakdown

Contract Ceiling: $18,669,420

Exercised Options: $18,669,420

Current Obligation: $18,669,420

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4069

IDV Type: BOA

Timeline