DoD's $20.5M Chilled Meats Contract with Tyson Foods Raises Concerns Over Competition and Value

Contract Overview

Contract Amount: $20,246,886 ($20.2M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Defense

Start Date: 2012-01-01

End Date: 2012-03-31

Contract Duration: 90 days

Daily Burn Rate: $225.0K/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 $20.2 million to TYSON FOODS INC. for work described as: RESALE-SEC B CHILLED MEATS Key points: 1. Significant contract value of $20.5 million for chilled meats. 2. Sole-source award to Tyson Foods Inc. limits competitive pricing. 3. Lack of competition raises questions about potential overpayment. 4. Poultry processing sector context is important for benchmarking.

Value Assessment

Rating: questionable

The contract value of $20.5 million for chilled meats is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts for poultry products.

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 taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for chilled meats.

Public Impact

Military personnel and their families may be impacted by the quality and cost of food services. The Defense Commissary Agency's procurement practices are under scrutiny. Taxpayer funds are being allocated to a contract lacking competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment
Limited transparency

Positive Signals

Established supplier (Tyson Foods)
Specific product category (chilled meats)

Sector Analysis

The Defense Commissary Agency procures a wide range of food products to support military families. Contracts for perishable goods like chilled meats are critical for morale and require careful cost management.

Small Business Impact

This contract was awarded to a large corporation, Tyson Foods Inc., and there is no indication of small business participation. This represents a missed opportunity for small business engagement.

Oversight & Accountability

Oversight of sole-source contracts is crucial to ensure fair pricing and prevent waste. The Defense Commissary Agency should have robust justification for non-competitive awards.

Related Government Programs

Poultry Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award lacks competition.
Potential for inflated pricing.
Limited transparency in procurement.
No small business participation.
Contract duration is short (90 days), but the value is high for that period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 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 $20.2 million.

What is the period of performance?

Start: 2012-01-01. End: 2012-03-31.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available competition. Without further documentation, it's impossible to determine the specific rationale. However, sole-source awards warrant close scrutiny to ensure they are truly necessary and that the government is not disadvantaged in price negotiation.

How does the pricing of this contract compare to market rates for similar poultry products?

Without access to competitive bids or market analysis data, a direct comparison is challenging. However, sole-source contracts inherently lack the price pressure that competition provides. It is likely that the pricing is higher than it would be in a competitive environment, potentially leading to increased costs for the government and taxpayers.

What measures are in place to ensure the quality and effectiveness of the chilled meats provided under this contract?

While the contract type is 'FIRM FIXED PRICE,' which sets the price, quality assurance measures are still essential. The Department of Defense and the Defense Commissary Agency should have inspection protocols and performance standards in place to ensure the delivered products meet specified quality requirements. Failure to meet these standards could lead to contract remedies.

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: $20,246,886

Exercised Options: $20,246,886

Current Obligation: $20,246,886

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4001

IDV Type: BOA

Timeline