DoD spent $24.2M on meat resale, with Kraft Foods Global Inc. as the sole provider

Contract Overview

Contract Amount: $24,249,934 ($24.2M)

Contractor: Kraft Foods Global, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-04-01

End Date: 2012-06-30

Contract Duration: 90 days

Daily Burn Rate: $269.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - MEAT

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $24.2 million to KRAFT FOODS GLOBAL, INC. for work described as: RESALE - MEAT Key points: 1. The contract value of $24.2 million for meat resale services represents a significant investment in commissary operations. 2. Competition dynamics were limited, with Kraft Foods Global, Inc. being the sole awardee, raising questions about price discovery. 3. The contract duration of 90 days suggests a short-term need or a bridge to a larger procurement. 4. Performance context is limited due to the short duration and lack of detailed performance metrics provided. 5. Sector positioning places this contract within the Defense Commissary Agency's broader food distribution and retail services. 6. The absence of small business participation indicates a focus on large-scale suppliers for this specific requirement.

Value Assessment

Rating: fair

Benchmarking the value of this $24.2 million contract is challenging without comparable data for similar meat resale services within the DoD or other federal agencies. The firm fixed-price contract type suggests that the price was determined upfront, but the lack of competition makes it difficult to assess if this price represents good value for money. The relatively short 90-day duration might indicate a specific, time-bound need or a stop-gap measure, which could influence the unit pricing compared to longer-term agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The data indicates that Kraft Foods Global, Inc. was the only entity considered for this award. This approach is typically used when only one source is capable of meeting the requirement, or in urgent situations. The lack of multiple bidders means that market forces were not leveraged to ensure the most competitive pricing.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not benefit from competitive bidding to drive down prices.

Public Impact

Military personnel and their families benefit from the availability of meat products through the Defense Commissary Agency. The services delivered include the resale of meat products, supporting the commissary's mission to provide groceries to the armed forces. The geographic impact is primarily within Illinois, where the contract was managed, affecting commissary operations in that state. Workforce implications are minimal for this specific contract, as it focuses on the supply of goods rather than direct service provision by a large workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Sole-source award limits opportunities for other suppliers to enter the market.
Short contract duration raises questions about long-term strategic sourcing for meat products.
Limited data on performance metrics makes it difficult to assess contractor effectiveness.
No small business participation noted, potentially missing opportunities for economic inclusion.

Positive Signals

Contract ensures availability of essential meat products for military families.
Firm fixed-price contract provides cost certainty for the government.
Award to a known entity like Kraft Foods Global, Inc. may imply a level of established reliability.

Sector Analysis

This contract falls within the broader food retail and wholesale sector, specifically serving the Defense Commissary Agency's mission. The market for wholesale meat distribution is competitive, with numerous large and small suppliers. However, within the context of government procurement for specific military installations or regions, sole-source or limited competition awards can occur due to logistical complexities, existing relationships, or specialized requirements. Comparable spending benchmarks for federal meat procurement are difficult to isolate without more specific product details and contract terms.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there an indication of subcontracting to small businesses. The award to Kraft Foods Global, Inc., a large corporation, suggests that the procurement was geared towards established, large-scale suppliers. This approach may overlook opportunities to engage small businesses in the food supply chain for military commissaries, potentially limiting their access to government contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA). As a delivery order under a larger contract vehicle, the specific oversight mechanisms would depend on the parent contract's terms. Accountability measures would be tied to the delivery of specified meat products according to the firm fixed-price agreement. Transparency is limited due to the sole-source nature and the short duration, with no public performance reports readily available.

Related Government Programs

Defense Commissary Agency Operations
Federal Food Procurement
Wholesale Grocery Distribution
Military Resale Services

Risk Flags

Sole-source award
Limited competition
Short contract duration
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.2 million to KRAFT FOODS GLOBAL, INC.. RESALE - MEAT

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 $24.2 million.

What is the period of performance?

Start: 2012-04-01. End: 2012-06-30.

What is the track record of Kraft Foods Global, Inc. with the Defense Commissary Agency?

Information regarding Kraft Foods Global, Inc.'s specific track record with the Defense Commissary Agency (DECA) for this particular contract is limited based on the provided data. However, as a large, established food company, Kraft Foods Global, Inc. likely has experience supplying various government entities, including military commissaries, through different contract vehicles. The fact that they were awarded this sole-source contract suggests a pre-existing capability or relationship that DECA deemed sufficient for this requirement. Further investigation into DECA's procurement history and contract databases would be necessary to detail their past performance, including any past issues or commendations related to similar supply contracts.

How does the $24.2 million value compare to similar meat resale contracts?

Direct comparison of the $24.2 million contract value for meat resale is challenging without more granular data on the specific types of meat, quantities, and contract duration. Federal meat procurement varies significantly based on agency needs, geographic scope, and market conditions. For instance, contracts for fresh produce or specialized food items might have different cost structures. The 90-day duration of this contract also makes it difficult to compare with longer-term agreements that might offer economies of scale. To provide a robust comparison, one would need to identify similar sole-source or limited-competition contracts for meat products awarded by DECA or other agencies like the Department of Agriculture or the General Services Administration within a comparable timeframe.

What are the primary risks associated with a sole-source award for meat resale?

The primary risk associated with a sole-source award for meat resale is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price for the goods. Another risk is reduced innovation and service improvement, as the sole provider may have less incentive to enhance offerings or efficiency. Furthermore, sole-source awards can create a dependency on a single supplier, which could be problematic if that supplier faces disruptions in their own operations. This also limits opportunities for small businesses to participate and grow within the federal supply chain for these essential goods.

How effective is the Defense Commissary Agency in procuring meat products?

The effectiveness of the Defense Commissary Agency (DECA) in procuring meat products can be assessed through various lenses, including product availability, quality, and cost-efficiency. This specific contract, valued at $24.2 million over 90 days and awarded sole-source to Kraft Foods Global, Inc., suggests a focus on ensuring supply continuity for a critical item. While the sole-source nature raises concerns about cost-effectiveness, it may have been deemed necessary for operational reasons or to secure a specific supply chain. DECA's overall mission is to provide high-quality groceries at a savings to military members and their families, and their procurement strategies are designed to support this. Evaluating effectiveness would require analyzing customer satisfaction, inventory turnover, spoilage rates, and price comparisons against civilian retail markets.

What are the historical spending patterns for meat resale by the Department of Defense?

Historical spending patterns for meat resale by the Department of Defense (DoD) are likely substantial, given the scale of military operations and the importance of commissaries. The DoD, through agencies like the Defense Commissary Agency (DECA), procures vast quantities of food products annually. While this specific $24.2 million contract is for a short duration, it represents a segment of the overall DoD food budget. Analyzing historical data would reveal trends in spending on meat products, the prevalence of sole-source versus competitive awards, and the average contract values over time. Such analysis would help identify whether spending on meat resale has increased or decreased, and whether procurement strategies have evolved to optimize value and competition.

What is the significance of the North American Industry Classification System (NAICS) code 424410?

The North American Industry Classification System (NAICS) code 424410 designates 'General Line Grocery Merchant Wholesalers.' This classification indicates that the business primarily engages in the wholesale distribution of a wide variety of food and related products, including canned goods, dry goods, fresh and frozen foods, and non-food items typically found in grocery stores. For this contract, it signifies that Kraft Foods Global, Inc. is acting as a wholesaler, supplying a broad range of grocery items, with a specific focus on meat products as per the contract description. This code is crucial for understanding the nature of the supplier's business and its role within the broader food supply chain.

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: $24,249,934

Exercised Options: $24,249,934

Current Obligation: $24,249,934

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3750

IDV Type: IDC

Timeline