DoD's $20.3M Jelly/Syrup Contract with J.M. Smucker Raises Questions on Competition and Value

Contract Overview

Contract Amount: $20,282,080 ($20.3M)

Contractor: THE J. M. Smucker Company

Awarding Agency: Department of Defense

Start Date: 2011-07-01

End Date: 2011-09-30

Contract Duration: 91 days

Daily Burn Rate: $222.9K/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 $20.3 million to THE J. M. SMUCKER COMPANY for work described as: RESALE - JAM/JELLY/SYRUP Key points: 1. Significant contract value awarded to a single, well-known supplier. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. Limited contract duration may indicate a need for ongoing procurement. 4. The sector is food and beverage, a common area for government procurement.

Value Assessment

Rating: questionable

The contract value of $20.3M for a 91-day period is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar bulk food purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, suggesting a sole-source or limited source award. This lack of competition hinders price negotiation and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competitive bidding likely results in a higher cost to taxpayers than a fully competed contract.

Public Impact

Taxpayers may be paying a premium for essential food items due to lack of competition. The Defense Commissary Agency relies on consistent supply chains, but competitive processes ensure efficiency. This contract highlights the importance of scrutinizing non-competitive awards, even for common goods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Limited contract duration

Positive Signals

Awarded to a known supplier
Essential goods procurement

Sector Analysis

The food and beverage sector, particularly for staples like jams, jellies, and syrups, is a recurring area of government spending. Benchmarks for such contracts are typically established through competitive bidding processes.

Small Business Impact

The data does not indicate any specific provisions or considerations for small businesses in this contract award. The award went to a large, established company.

Oversight & Accountability

The limited competition and lack of detailed justification for the award method warrant further oversight to ensure taxpayer funds are used efficiently and effectively.

Related Government Programs

Soybean Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited contract duration suggests ongoing need
No clear justification for non-competitive award
Absence of small business considerations

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.3 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 $20.3 million.

What is the period of performance?

Start: 2011-07-01. End: 2011-09-30.

What was the justification for not competing this contract, and what steps were taken to ensure fair pricing?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' Without further documentation, it's unclear if this was due to a specific exception, emergency, or other reason. Standard procurement regulations require justification for non-competitive awards, including efforts to obtain fair and reasonable pricing through market research or negotiation.

How does the per-unit cost of these food items compare to commercially available prices or other government contracts?

A direct per-unit cost comparison is not possible with the provided data. However, the lack of competition suggests that the negotiated price might be higher than what could be achieved through a competitive bidding process. Benchmarking against similar contracts or commercial prices would be necessary for a thorough assessment.

What is the long-term strategy for procuring these food items, and will future contracts be competed?

The contract duration is only 91 days, indicating a short-term need. Future procurement strategies are not detailed in the provided data. It is crucial for the Defense Commissary Agency to plan for competitive solicitations for ongoing requirements to ensure cost-effectiveness and value for taxpayer dollars.

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: $20,282,080

Exercised Options: $20,282,080

Current Obligation: $20,282,080

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0107G3563

IDV Type: IDC

Timeline