DoD's $19.1M contract for jams, jellies, and syrups awarded to J.M. Smucker Company

Contract Overview

Contract Amount: $19,113,285 ($19.1M)

Contractor: THE J. M. Smucker Company

Awarding Agency: Department of Defense

Start Date: 2011-04-01

End Date: 2011-06-30

Contract Duration: 90 days

Daily Burn Rate: $212.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - JAM/JELLY/SYRUP

Place of Performance

Location: ORRVILLE, WAYNE County, OHIO, 44667

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to THE J. M. SMUCKER COMPANY for work described as: RESALE - JAM/JELLY/SYRUP Key points: 1. Contract awarded to a single, well-established supplier, raising questions about competitive pricing. 2. Limited competition suggests potential for above-market pricing and reduced value for taxpayer dollars. 3. The contract's short duration (90 days) may indicate an urgent need or a gap-filling measure. 4. Focus on shelf-stable food items points to logistical support for military personnel. 5. The specific product codes (NAICS 311222) relate to sugar and confectionery manufacturing. 6. Awarded by the Defense Commissary Agency, indicating a focus on retail operations for service members.

Value Assessment

Rating: questionable

The contract value of $19.1 million for a 90-day period for jams, jellies, and syrups appears high, especially given the lack of competition. Without benchmark data for similar large-scale commissary provisions or competitive bids, it's difficult to definitively assess value for money. The sole-source nature of the award prevents direct comparison to market rates achieved through competitive processes, suggesting that taxpayers may not have received the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The J. M. Smucker Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition significantly limits price discovery and may lead to higher costs than if the contract had been competed.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding, potentially leading to overpayment for goods.

Public Impact

Military personnel and their families stationed at bases served by the Defense Commissary Agency are the primary beneficiaries, gaining access to essential food items. The contract ensures the supply of jams, jellies, and syrups, contributing to the variety and availability of food products in commissaries. The geographic impact is likely nationwide, covering commissary operations across various Department of Defense installations. The contract supports the food manufacturing and distribution workforce involved in producing and delivering these products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about price reasonableness and potential for inflated costs.
Sole-source award limits transparency and opportunities for other suppliers to compete for government business.
High dollar value for a short-term contract warrants scrutiny of the necessity and pricing structure.

Positive Signals

Award to a known entity, J.M. Smucker, suggests a reliable supplier with established quality controls.
Contract supports essential food provisions for military families, contributing to morale and well-being.
The Defense Commissary Agency's role ensures access to goods at or below comparable civilian retail prices.

Sector Analysis

The food manufacturing sector, specifically sugar and confectionery production (NAICS 311222), is a significant part of the broader food and beverage industry. Government contracts for food supplies are common, supporting military operations, federal agencies, and institutional feeding programs. While specific benchmarks for jams and jellies are scarce, the overall food manufacturing market is highly competitive, making sole-source awards for such common goods notable.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to a large corporation. There is no information provided regarding subcontracting plans for small businesses. The lack of a set-aside means that opportunities for small businesses to participate in supplying these goods to the Defense Commissary Agency are missed under this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting and procurement divisions, with potential review by the Department of Defense Inspector General. Transparency is limited due to the sole-source nature of the award. Accountability measures would involve performance monitoring and adherence to contract terms, but specific details on these mechanisms are not provided.

Related Government Programs

Defense Commissary Agency Food Procurement
Department of Defense Food Services
Federal Food, Drug, and Cosmetic Act Compliance
Commodity Procurement Contracts

Risk Flags

Sole-source award
High dollar value for short duration
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to THE J. M. SMUCKER COMPANY. RESALE - JAM/JELLY/SYRUP

Who is the contractor on this award?

The obligated recipient is THE J. M. SMUCKER COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2011-04-01. End: 2011-06-30.

What is the historical spending pattern for jams, jellies, and syrups by the Defense Commissary Agency?

Analyzing historical spending data for jams, jellies, and syrups by the Defense Commissary Agency (DECA) is crucial for understanding the context of the $19.1 million award. Without access to DECA's specific procurement history for these items, it's challenging to establish a baseline. However, federal agencies often procure such goods through various mechanisms, including prime vendor contracts, open market purchases, and sometimes through larger food service agreements. If DECA has historically relied on competitive bidding for similar product categories, this sole-source award for a significant amount over a short period would stand out. Conversely, if there's a history of sole-source awards due to specific supplier relationships or unique product requirements, the current award might be more consistent with past practices. Further investigation into DECA's procurement reports and contract databases would be necessary to determine if this $19.1 million represents an increase, decrease, or typical expenditure for these items.

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

Directly comparing the pricing of this $19.1 million sole-source contract to commercial market rates is difficult without specific product details (e.g., size, type of fruit, packaging) and volume discounts. However, sole-source contracts generally carry a higher risk of inflated pricing because they lack the competitive pressure that drives down costs. The J. M. Smucker Company is a major commercial supplier, and their products are widely available. If this contract represents a price significantly above what a large commercial retailer or food service distributor would pay for equivalent volumes, it suggests a potential lack of value for money. Benchmarking would require obtaining commercial price lists for comparable products and estimating the volume purchased under this contract to calculate a per-unit cost for comparison. Given the absence of competition, it is plausible that the per-unit cost is higher than what could be achieved through a competitive federal procurement process.

What are the specific risks associated with a sole-source award of this magnitude for food products?

The primary risk associated with a sole-source award of this magnitude ($19.1 million) for food products like jams, jellies, and syrups is financial. Without competition, the government may overpay for these goods, leading to inefficient use of taxpayer funds. There's also a risk of reduced quality or service if the sole provider faces no pressure to maintain high standards. Furthermore, sole-source awards limit market access for other potential suppliers, including small businesses, hindering broader economic participation. From a supply chain perspective, relying on a single source can create vulnerabilities; if the supplier experiences production issues, natural disasters, or other disruptions, the supply chain for these essential commissary items could be severely impacted, affecting military personnel and their families. The short duration (90 days) might mitigate some long-term risks but doesn't eliminate the immediate concerns regarding price and supply stability.

What is the track record of The J. M. Smucker Company in fulfilling government contracts, particularly with the Defense Commissary Agency?

The J. M. Smucker Company is a well-established food manufacturer with a long history in the commercial market. While specific details of their government contract history are not provided in the data, large corporations like Smucker often engage in government contracting, supplying products through various channels. Their experience likely includes navigating federal procurement regulations and quality standards. For the Defense Commissary Agency (DECA), Smucker's participation could stem from direct awards or through distributors supplying commissary shelves. A positive track record would involve consistent delivery of quality products on time and within budget. Conversely, any past performance issues, such as delivery delays, quality control problems, or pricing disputes, would be relevant to assessing the risk of this current contract. A review of federal contract databases (like SAM.gov) and past performance evaluations would provide a more comprehensive understanding of their government contracting history.

What is the strategic importance of this contract for the Defense Commissary Agency's operations?

This contract is strategically important for the Defense Commissary Agency (DECA) as it ensures the consistent availability of popular food staples like jams, jellies, and syrups for military members and their families. Commissaries aim to provide groceries at a savings compared to civilian retailers, and maintaining a diverse stock of essential and desirable items is key to their mission. By securing these products, DECA supports the quality of life for service members and their dependents, contributing to morale. The specific award value and short duration might suggest this contract is either fulfilling an immediate, high-volume need or is part of a larger, ongoing procurement strategy where individual delivery orders are placed against a broader agreement. Ensuring a reliable supply chain for these items is fundamental to DECA's operational effectiveness and its ability to deliver value to its customers.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean Processing

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: ONE STRAWBERRY LANE, ORRVILLE, OH, 44667

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,113,285

Exercised Options: $19,113,285

Current Obligation: $19,113,285

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0107G3563

IDV Type: IDC

Timeline