DoD's $16.6M Pet Food Contract with Nestle Purina Raises Questions on Competition and Value
Contract Overview
Contract Amount: $16,594,398 ($16.6M)
Contractor: Nestle Purina Petcare CO
Awarding Agency: Department of Defense
Start Date: 2010-10-01
End Date: 2010-12-31
Contract Duration: 91 days
Daily Burn Rate: $182.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RESALE - PET FOOD
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63102
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $16.6 million to NESTLE PURINA PETCARE CO for work described as: RESALE - PET FOOD Key points: 1. Significant spending on pet food by the Defense Commissary Agency highlights a niche but essential service. 2. Sole-source award to Nestle Purina suggests a lack of competitive bidding, potentially impacting price discovery. 3. The contract's duration and firm fixed-price structure offer some cost certainty but may limit flexibility. 4. Analysis of per-unit costs against industry benchmarks is crucial for assessing value for money.
Value Assessment
Rating: questionable
The contract value of $16.6 million for a 91-day period is substantial. Without specific product details or volume, a direct per-unit cost comparison is difficult. However, the lack of competitive bidding raises concerns about whether the government secured the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating that competition was not sought or was deemed impractical. This method limits price discovery and may lead to higher costs compared to a competitive process.
Taxpayer Impact: Taxpayer funds are used for this contract. The lack of competition means there's a risk of overpayment, impacting the overall value derived from public funds.
Public Impact
Supports military families by providing essential pet food through commissaries. Ensures a consistent supply of pet food for a specific period, maintaining morale for service members. The sole-source nature of the award may limit the availability of diverse pet food options for consumers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of bidding.
- Short contract duration may not reflect long-term market prices.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Addresses a specific need for military personnel and their families.
Sector Analysis
The Dog and Cat Food Manufacturing sector (NAICS 311111) is a mature industry. Government spending in this area, particularly through agencies like the Defense Commissary Agency, supports the well-being of military families. Benchmarks for this sector would typically focus on bulk purchasing agreements and competitive pricing within the retail and wholesale markets.
Small Business Impact
The data indicates this contract was awarded to Nestle Purina PetCare Co., a large corporation. There is no indication that small businesses were involved in this specific award, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the pricing is fair and reasonable. The Defense Commissary Agency should have justification for not pursuing competition and mechanisms to validate the pricing against market rates.
Related Government Programs
- Dog and Cat Food Manufacturing
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competition
- Potential for overpricing
- Limited transparency on price justification
- Short contract duration may not be optimal for long-term supply agreements
Tags
dog-and-cat-food-manufacturing, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.6 million to NESTLE PURINA PETCARE CO. RESALE - PET FOOD
Who is the contractor on this award?
The obligated recipient is NESTLE PURINA PETCARE CO.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Commissary Agency).
What is the total obligated amount?
The obligated amount is $16.6 million.
What is the period of performance?
Start: 2010-10-01. End: 2010-12-31.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?
The justification for a sole-source award typically involves factors like unique capabilities, urgent needs, or lack of available sources. The Defense Commissary Agency would need to provide documentation demonstrating why competition was not feasible. Price reasonableness is usually assessed by comparing the proposed price to historical prices, commercial price lists, or other government contracts for similar items, even if awarded sole-source.
What is the per-unit cost of the pet food, and how does it compare to commercial retail prices?
Without specific product details (e.g., brand, size, type of food) and quantities, calculating a precise per-unit cost is challenging. The total award of $16.6 million over 91 days suggests a significant volume. A comparison to commercial retail prices would require detailed product matching and consideration of bulk purchasing discounts potentially available to the government.
What is the impact of this sole-source contract on the availability and pricing of pet food for consumers outside the military community?
This specific contract is unlikely to have a direct, significant impact on the broader commercial pet food market. Nestle Purina operates on a large scale, and this contract represents a portion of their overall business. However, if the government were consistently awarding contracts sole-source in a category where competition exists, it could indirectly influence market dynamics over time.
Industry Classification
NAICS: Manufacturing › Animal Food Manufacturing › Dog and Cat Food Manufacturing
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: 801 CHOUTEAU AVE, SAINT LOUIS, MO, 63102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,594,398
Exercised Options: $16,594,398
Current Obligation: $16,594,398
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0110G3930
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
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