DoD's $24.8M Grocery Contract with Kraft Foods Raises Questions on Competition and Value
Contract Overview
Contract Amount: $24,861,311 ($24.9M)
Contractor: Kraft Foods Global, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-10-01
End Date: 2010-12-31
Contract Duration: 91 days
Daily Burn Rate: $273.2K/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: NORTHFIELD, COOK County, ILLINOIS, 60093
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $24.9 million to KRAFT FOODS GLOBAL, INC. for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Significant spending on miscellaneous groceries highlights reliance on established suppliers. 2. The contract's value is substantial, warranting scrutiny of pricing and alternatives. 3. Limited competition raises concerns about potential overpayment and lack of innovation. 4. The grocery wholesale sector is generally competitive, making this contract's structure unusual.
Value Assessment
Rating: questionable
The contract value of $24.8M for a 91-day period is high. Without comparable contract data or a competitive bidding process, it's difficult to assess if the pricing is reasonable compared to market rates for similar wholesale grocery services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a potential sole-source or limited-source award. This lack of open competition limits price discovery and may result in higher costs for the government.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, potentially leading to inefficient use of funds for essential grocery supplies.
Public Impact
Commissary shoppers may see a wide variety of Kraft products, but potentially at higher prices than if sourced competitively. Military families rely on commissaries for affordable goods; non-competitive contracts could impact this benefit. The Defense Commissary Agency's procurement practices are under scrutiny for efficiency and cost-effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value for short duration
- Potential for price inflation
Positive Signals
- Ensures availability of specific grocery items
- Supports established supplier relationships
Sector Analysis
The Defense Commissary Agency operates within the broader retail and wholesale grocery sector. While this sector is typically competitive, large government contracts can sometimes be awarded under limited competition due to specific requirements or existing relationships.
Small Business Impact
The data does not indicate any specific provisions or benefits for small businesses within this contract. The award to Kraft Foods Global, Inc., a large corporation, suggests limited direct opportunity for small businesses in this particular transaction.
Oversight & Accountability
The Defense Commissary Agency is responsible for providing quality goods at competitive prices to military personnel and their families. Oversight is crucial to ensure that contracts, especially those with limited competition, deliver value and are managed effectively.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competitive bidding
- High dollar value for a short period
- Potential for inflated pricing
- Limited transparency in award justification
Tags
general-line-grocery-merchant-wholesaler, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.9 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 $24.9 million.
What is the period of performance?
Start: 2010-10-01. End: 2010-12-31.
What was the justification for limiting competition on this significant grocery contract?
The justification for limiting competition is not provided in the data. Typically, such limitations might stem from urgent needs, unique product requirements, or existing infrastructure dependencies. However, for a general line grocery contract, a lack of competition is unusual and warrants further investigation into the specific circumstances and rationale behind the procurement decision.
How does the per-unit cost of these groceries compare to commercial market prices?
Without specific itemized pricing and a direct comparison to commercial market rates, it is impossible to determine the per-unit cost effectiveness. The absence of competitive bidding makes this comparison even more challenging, as the negotiated price may not reflect the best possible value achievable through an open and competitive process.
What is the long-term impact of awarding such contracts without competition on the Defense Commissary Agency's overall budget?
Awarding contracts without competition can lead to sustained higher costs over the long term, potentially straining the Defense Commissary Agency's budget. This can reduce the agency's ability to offer competitive pricing to its customers and may necessitate increased appropriations or cuts in other areas.
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: $24,861,311
Exercised Options: $24,861,311
Current Obligation: $24,861,311
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0109G3750
IDV Type: IDC
Timeline
Start Date: 2010-10-01
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2019-06-07
More Contracts from Kraft Foods Global, Inc.
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- Resale - Miscellaneous Grocery — $26.6M (Department of Defense)
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