DoD's $20.5M canned goods contract awarded to Conagra Foods for commissary resale

Contract Overview

Contract Amount: $20,508,439 ($20.5M)

Contractor: Conagra Foods Packaged Foods, LLC

Awarding Agency: Department of Defense

Start Date: 2012-01-01

End Date: 2012-03-31

Contract Duration: 90 days

Daily Burn Rate: $227.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - CAN BEANS AND CAN SAUSAGE

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68122

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to CONAGRA FOODS PACKAGED FOODS, LLC for work described as: RESALE - CAN BEANS AND CAN SAUSAGE Key points: 1. Value for money assessed through comparison with similar food supply contracts. 2. Competition dynamics indicate a sole-source award, potentially impacting price discovery. 3. Risk indicators include sole-source nature and limited contract duration. 4. Performance context is within the Defense Commissary Agency's food supply chain. 5. Sector positioning is in the wholesale grocery merchant sector for food products.

Value Assessment

Rating: fair

The contract value of $20.5 million for a 3-month period appears high for canned goods, suggesting potential overpricing or inclusion of significant overhead. Benchmarking against similar large-scale food procurement contracts for military commissaries or other government agencies would be necessary to determine true value for money. The fixed-price nature provides cost certainty but may not reflect market fluctuations effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one responsible source is available or in cases of urgent need. The lack of competition limits the government's ability to solicit multiple bids and negotiate the best possible price, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from competitive pricing, as the government did not explore options for lower bids from other qualified suppliers.

Public Impact

Military personnel and their families benefit from the availability of canned goods through commissaries. Services delivered include the supply of canned beans and canned sausage. Geographic impact is nationwide, serving Defense Commissary Agency locations. Workforce implications are minimal for this specific delivery order, primarily affecting logistics and distribution personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits.
Short contract duration (90 days) may indicate an interim solution or specific, limited need.
Lack of detailed performance metrics in the provided data makes assessing effectiveness difficult.

Positive Signals

Ensures availability of essential food items for military families.
Utilizes an established supplier (Conagra Foods) for potentially consistent product quality.

Sector Analysis

The contract falls within the wholesale grocery merchant sector, specifically for processed and canned foods. This sector is characterized by large distributors supplying a wide range of food products to retail outlets, including government commissaries. The market size for such goods is substantial, driven by consumer demand and institutional purchasing. This contract represents a small portion of the overall federal spending on food supplies.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the sole-source nature. Conagra Foods is a large corporation, and the direct award suggests a focus on established supply chains rather than fostering small business participation in this specific instance.

Oversight & Accountability

Oversight would typically be managed by the Defense Commissary Agency (DECA) contracting officers and quality assurance personnel. Accountability measures would involve ensuring timely delivery and product quality as per the contract terms. Transparency is limited due to the sole-source nature and the brevity of the contract period.

Related Government Programs

Defense Commissary Agency Food Procurement
Federal Food Supply Contracts
Wholesale Grocery Distribution Contracts

Risk Flags

Sole-source award may indicate limited market availability or urgency.
Short contract duration (90 days) could suggest an interim solution or specific, limited need.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to CONAGRA FOODS PACKAGED FOODS, LLC. RESALE - CAN BEANS AND CAN SAUSAGE

Who is the contractor on this award?

The obligated recipient is CONAGRA FOODS PACKAGED FOODS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.5 million.

What is the period of performance?

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

What is the historical spending pattern for canned goods by the Defense Commissary Agency?

Analyzing historical spending data for canned goods by the Defense Commissary Agency (DECA) is crucial for understanding trends and identifying potential anomalies. Without specific historical data for this contract, we can infer that DECA likely procures a wide variety of food items regularly to supply commissaries worldwide. Past contracts might reveal whether Conagra Foods has been a consistent supplier, the typical contract durations, and the average price points for similar items. A review of previous years' spending could highlight if this $20.5 million for a 90-day period represents a significant increase or decrease in expenditure for canned goods, potentially indicating shifts in demand, market prices, or procurement strategies. Understanding these patterns helps in assessing the reasonableness of the current contract's value and its place within the agency's overall food budget.

How does the unit cost of these canned goods compare to commercial market rates?

Determining the unit cost of the canned goods procured under this contract requires knowing the exact quantities of beans and sausage purchased. Assuming the $20.5 million covers a specific volume, we could calculate an average price per unit (e.g., per can or per pound). This calculated average would then need to be benchmarked against prevailing commercial market rates for similar products sold through retail channels or wholesale distributors. Factors such as bulk purchasing discounts, delivery logistics, and specific product quality standards for military commissaries can influence these costs. If the government's unit cost significantly exceeds commercial rates, it could indicate inefficiencies in the procurement process, higher overheads, or a lack of competitive pricing due to the sole-source award. Conversely, if it aligns with or is below market rates, it might suggest effective negotiation or favorable terms despite the limited competition.

What are the specific risks associated with a sole-source award for essential food supplies?

Sole-source awards for essential food supplies, like canned goods for military commissaries, carry several specific risks. Primarily, the lack of competition can lead to inflated prices, meaning taxpayers may bear a higher cost than necessary. Without competing bids, there's less incentive for the awarded contractor to offer the most competitive pricing. Secondly, it can reduce the government's leverage in negotiating terms and conditions. Thirdly, it limits the opportunity to discover potentially more innovative or cost-effective solutions from other suppliers. In the long term, over-reliance on sole-source contracts can stifle market competition and potentially lead to supply chain vulnerabilities if the single source faces disruptions. For essential items like food, ensuring a robust and competitive supply chain is critical for operational readiness and morale.

What is Conagra Foods' track record with government contracts, particularly for food supplies?

Conagra Foods, Inc. has a significant history of supplying food products to various government entities, including the Department of Defense (DoD) and other agencies. Their track record typically involves providing a wide array of packaged foods, often through large-scale contracts for military commissaries, institutional feeding programs, and disaster relief efforts. While specific performance details for every contract are not publicly available, Conagra is a major player in the food industry, suggesting a generally reliable capacity for production and distribution. Past contract awards and any associated performance reviews or disputes would offer a clearer picture. Examining their history with similar sole-source or competitively awarded contracts can provide insights into their pricing strategies, product quality consistency, and ability to meet delivery schedules for government requirements.

How does this contract fit into the broader context of federal food procurement spending?

This $20.5 million contract for canned goods represents a component of the larger federal spending on food and agricultural products. The Department of Defense, through entities like the Defense Commissary Agency (DECA), is a significant purchaser of food to support military personnel and their families globally. Federal food procurement encompasses a vast range of items, from raw agricultural commodities to processed and packaged goods, serving various institutions like military bases, prisons, and federal agency cafeterias. Contracts like this one, even if sole-source and short-term, contribute to the overall volume and value of federal food spending. Benchmarking this contract's value against total annual food spending by DECA or the broader federal government can help contextualize its significance and assess the efficiency of federal food acquisition strategies.

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

Address: 7350 WORLD COMMUNICATIONS DR, OMAHA, NE, 68122

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,508,439

Exercised Options: $20,508,439

Current Obligation: $20,508,439

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4069

IDV Type: BOA

Timeline