DoD's $25.3M Grocery Resale Contract with Kraft Foods Lacked Competition

Contract Overview

Contract Amount: $25,324,039 ($25.3M)

Contractor: Kraft Foods Global, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-07-01

End Date: 2011-09-30

Contract Duration: 91 days

Daily Burn Rate: $278.3K/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: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $25.3 million to KRAFT FOODS GLOBAL, INC. for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Significant spending on miscellaneous groceries via a single delivery order. 2. Sole-source award to Kraft Foods Global, Inc. raises competition concerns. 3. High value contract with a short duration suggests urgent need or specific circumstances. 4. Lack of competition may lead to suboptimal pricing and reduced value for taxpayers.

Value Assessment

Rating: questionable

The contract value of $25.3M for a 91-day period is substantial. Without competitive bidding, it's difficult to assess if this price is fair compared to market rates for similar grocery wholesale services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating no competition was sought. This method bypasses the price discovery benefits of a competitive process, potentially increasing costs.

Taxpayer Impact: The absence of competition for a $25.3M contract means taxpayers may have paid more than necessary for these grocery items.

Public Impact

Commissary shoppers may face higher prices due to lack of competitive sourcing. Taxpayer funds are allocated without assurance of best value. Limited transparency into the justification for sole-source procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High dollar value for short duration
Lack of competition justification

Positive Signals

Contract awarded to a known supplier
Specific need met for commissary operations

Sector Analysis

This contract falls under wholesale trade for groceries, specifically serving the Defense Commissary Agency. Spending benchmarks in this sector vary widely based on product mix and volume, but competitive sourcing is standard practice.

Small Business Impact

The contract was awarded to Kraft Foods Global, Inc., a large corporation. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the justification was robust and that proper oversight was applied to prevent potential waste or fraud.

Related Government Programs

General Line Grocery Merchant Wholesalers
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award lacks transparency
Potential for overpayment due to no competition
Limited duration may indicate a stop-gap measure, not strategic sourcing
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.3 million to KRAFT FOODS GLOBAL, INC.. RESALE - MISCELLANEOUS GROCERY

Who is the contractor on this award?

The obligated recipient is KRAFT FOODS GLOBAL, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.3 million.

What is the period of performance?

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

What was the specific justification for awarding this $25.3M grocery contract on a sole-source basis?

The provided data does not include the justification for the sole-source award. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Further investigation into the contract file would be required to determine the exact rationale.

What is the potential risk to taxpayers due to the lack of competition?

The primary risk to taxpayers is paying a premium price. Without competitive bidding, the government cannot be assured it received the best possible price for the $25.3M in groceries. This could lead to inefficient use of funds and potentially higher costs for commissary operations.

How effective was this contract in meeting the Defense Commissary Agency's needs?

While the contract was awarded and presumably fulfilled, its effectiveness in terms of value for money is questionable due to the sole-source nature. The agency received the groceries, but the cost-effectiveness and potential for better alternatives through competition remain unknown.

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: Kraft Foods Inc. (UEI: 877147228)

Address: THREE LAKE DR, NORTHFIELD, IL, 60093

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

Financial Breakdown

Contract Ceiling: $25,324,039

Exercised Options: $25,324,039

Current Obligation: $25,324,039

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3750

IDV Type: IDC

Timeline