DoD spent $19.3M on grocery wholesale, with Quaker Oats receiving a significant portion

Contract Overview

Contract Amount: $19,279,699 ($19.3M)

Contractor: Quaker Oats Company, the

Awarding Agency: Department of Defense

Start Date: 2011-04-01

End Date: 2011-06-30

Contract Duration: 90 days

Daily Burn Rate: $214.2K/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: CHICAGO, COOK County, ILLINOIS, 60661

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to QUAKER OATS COMPANY, THE for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Value for money is difficult to assess due to lack of detailed pricing data. 2. Competition was limited, raising questions about price discovery and potential overspending. 3. Risk indicators are moderate, with a short performance period but a single award. 4. Performance context shows a single delivery order for a short duration. 5. Sector positioning is within wholesale grocery distribution for military commissaries.

Value Assessment

Rating: fair

The total contract value of $19.3 million for wholesale grocery distribution is substantial. However, without a breakdown of specific items or comparison to similar contracts for the same goods, assessing value for money is challenging. The pricing structure is firm fixed price, which offers predictability but may not reflect market fluctuations effectively. Benchmarking against other federal grocery contracts or commercial wholesale prices would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services. The lack of competition limits the government's ability to secure the best possible pricing through a bidding process and may indicate a reliance on a specific supplier for these miscellaneous grocery items.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices.

Public Impact

Military personnel and their families benefit from access to grocery items through the Defense Commissary Agency. The contract supports the supply chain for essential food and household goods within military communities. Geographic impact is likely nationwide, serving commissaries across various military installations. Workforce implications include jobs in logistics, warehousing, and distribution within the food wholesale sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in suboptimal pricing.
Limited transparency on specific product mix and associated costs.
Potential for over-reliance on a single supplier for essential goods.

Positive Signals

Ensures availability of grocery items for military families.
Firm fixed price contract provides cost certainty.
Award to a known entity like Quaker Oats suggests established supply chain capabilities.

Sector Analysis

The contract falls within the wholesale trade sector, specifically general line grocery merchant wholesaling. This sector is characterized by large volumes and established distribution networks. The market size for federal grocery procurement is significant, supporting military commissaries and other government feeding programs. This contract represents a portion of that overall spending, focusing on miscellaneous grocery items.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award was made directly to Quaker Oats Company, a large corporation. This means that the direct economic benefit to small businesses from this specific contract is likely minimal, unless Quaker Oats engaged them as suppliers outside of the direct contract terms.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA) and potentially the Department of Defense's Inspector General. Accountability measures would include ensuring delivery of specified goods according to the contract terms. Transparency is limited due to the sole-source nature and lack of publicly available detailed performance reports.

Related Government Programs

Defense Commissary Agency Operations
Federal Food Procurement
Wholesale Trade Services
Military Resale Operations

Risk Flags

Sole-source award limits price competition.
Lack of detailed product information hinders value assessment.
Short performance period may not reflect long-term supply chain reliability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to QUAKER OATS COMPANY, THE. RESALE - MISCELLANEOUS GROCERY

Who is the contractor on this award?

The obligated recipient is QUAKER OATS COMPANY, THE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

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

What specific types of 'miscellaneous grocery' items were included in this $19.3 million contract?

The provided data indicates the contract was for 'RESALE - MISCELLANEOUS GROCERY' and was awarded to Quaker Oats Company. However, it does not specify the exact mix of products. 'Miscellaneous grocery' typically encompasses a broad range of non-perishable food items, beverages, and potentially some household goods not falling into standard categories like dairy, produce, or meat. Without a detailed product list or statement of work, it's impossible to ascertain the precise composition of the goods procured under this contract. This lack of specificity makes it difficult to benchmark pricing or assess the true value delivered.

Why was this contract awarded on a sole-source basis to Quaker Oats Company?

The data explicitly states the contract type was 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The rationale for such an award is not detailed in the provided information. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or when there's a compelling urgency that precludes competition. For a large distributor like Quaker Oats, this could potentially relate to exclusive distribution rights for certain brands, specialized logistics capabilities, or a specific need within the Defense Commissary Agency's inventory management system that only they could fulfill efficiently within the given timeframe.

How does the $19.3 million spending compare to historical or projected spending on similar grocery wholesale contracts by the Defense Commissary Agency?

The provided data only covers this single contract award of $19.3 million for a 90-day period (April 1, 2011, to June 30, 2011). To compare this spending, one would need access to historical contract data for the Defense Commissary Agency (DECA) related to wholesale grocery distribution. Analyzing trends over multiple years, including average contract values, number of bidders, and pricing fluctuations for similar goods, would be necessary. Without this broader dataset, it's impossible to determine if $19.3 million for a quarter represents an increase, decrease, or is in line with typical spending patterns for this category of goods.

What were the key performance indicators (KPIs) and how did Quaker Oats Company perform against them during the contract period?

The provided data does not include any information regarding Key Performance Indicators (KPIs) or the performance evaluation of Quaker Oats Company for this contract. Contract performance is typically detailed in post-award performance reports, which are not included here. For a contract of this nature, common KPIs might include on-time delivery rates, order accuracy, product quality, and responsiveness to issues. The absence of performance data makes it difficult to assess the effectiveness of the contractor in fulfilling the requirements of the $19.3 million award.

What is the significance of the 'General Line Grocery Merchant Wholesalers' (NAICS 424410) classification in the context of this contract?

The NAICS code 424410, 'General Line Grocery Merchant Wholesalers,' signifies that the primary business activity of the contractor, in relation to this contract, is the wholesale distribution of a wide variety of food and non-food grocery items. This classification indicates that Quaker Oats Company, through this contract, was acting as a broad-line distributor, supplying numerous types of grocery products rather than specializing in a narrow category. This is crucial for the Defense Commissary Agency as it allows them to source a diverse range of products from a single entity, streamlining procurement and logistics for their retail operations.

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

Parent Company: Pepsico, Inc. (UEI: 001287762)

Address: 555 W MONROE ST, CHICAGO, IL, 60661

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,279,699

Exercised Options: $19,279,699

Current Obligation: $19,279,699

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3799

IDV Type: IDC

Timeline