DoD's $19.3M Chilled Meats Contract with Tyson Foods Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $19,288,004 ($19.3M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Defense

Start Date: 2011-07-01

End Date: 2011-09-30

Contract Duration: 91 days

Daily Burn Rate: $212.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE-SEC B CHILLED MEATS

Place of Performance

Location: SPRINGDALE, WASHINGTON County, ARKANSAS, 72762

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to TYSON FOODS INC. for work described as: RESALE-SEC B CHILLED MEATS Key points: 1. The contract awarded to Tyson Foods Inc. for chilled meats represents a significant expenditure. 2. Competition was explicitly noted as 'NOT AVAILABLE FOR COMPETITION', raising concerns about price discovery. 3. The sole-source nature of this award presents a potential risk of inflated pricing. 4. The Defense Commissary Agency's procurement falls within the broader food services sector.

Value Assessment

Rating: questionable

The contract value of $19.3 million for a 91-day period is substantial. Without competitive bidding, it's difficult to assess if this price is fair market value compared to similar large-scale food service contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition likely results in taxpayers paying more than they would for a competitively bid contract.

Public Impact

Military personnel and their families rely on commissary services for groceries, including meat products. The significant contract value indicates a large volume of goods, impacting supply chains. Procurement practices that lack competition can erode public trust in government spending efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Positive Signals

Essential Goods Provided
Established Vendor

Sector Analysis

This procurement falls under the food and beverage sector, specifically processed meats. Government spending in this area is substantial, supporting agricultural and food processing industries. Benchmarks for similar large-volume meat contracts are often influenced by market volatility and scale.

Small Business Impact

The data indicates this contract was awarded to a large corporation, Tyson Foods Inc. There is no indication of small business participation in this specific award, which is common for large sole-source contracts.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the pricing is justified and that future opportunities for competition are explored.

Related Government Programs

Poultry Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to absence of market pressure.
Limited transparency in the procurement process.
No clear mechanism for price validation presented.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to TYSON FOODS INC.. RESALE-SEC B CHILLED MEATS

Who is the contractor on this award?

The obligated recipient is TYSON FOODS INC..

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

What specific circumstances prevented competition for this significant chilled meats contract?

The provided data states 'NOT AVAILABLE FOR COMPETITION' without further explanation. Typically, this designation might arise from urgent needs, unique capabilities of a single vendor, or specific government requirements that only one entity can meet. However, without detailed justification, the rationale remains unclear and raises concerns about the procurement process.

How can the Department of Defense ensure fair pricing when competition is not feasible?

When competition is not feasible, the Department of Defense can employ several strategies to ensure fair pricing. This includes conducting thorough market research to establish a reasonable price range, negotiating aggressively with the sole-source provider, and potentially utilizing independent cost estimates. Robust internal review and justification processes are also crucial to validate the selected price.

What is the potential long-term impact of sole-source awards on market dynamics and government costs?

Sole-source awards, especially when repeated, can stifle market competition over the long term by discouraging new entrants and reducing incentives for incumbent firms to offer competitive pricing. This can lead to persistently higher costs for the government and taxpayers. It may also limit the government's access to innovative solutions that might be offered by a more diverse supplier base.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Poultry 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: 2200 DON TYSON PKWY, SPRINGDALE, AR, 72762

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,288,004

Exercised Options: $19,288,004

Current Obligation: $19,288,004

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4001

IDV Type: BOA

Timeline