DoD's $24.3M Meat Resale Contract with Kraft Foods: Limited Competition Raises Concerns

Contract Overview

Contract Amount: $24,302,315 ($24.3M)

Contractor: Kraft Foods Global, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2011-12-31

Contract Duration: 91 days

Daily Burn Rate: $267.1K/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 $24.3 million to KRAFT FOODS GLOBAL, INC. for work described as: RESALE - MEAT Key points: 1. Significant spending on meat resale, totaling $24.3M. 2. Sole-source award to Kraft Foods Global, Inc. limits competitive pricing. 3. Potential for inflated costs due to lack of competition. 4. Defense Commissary Agency (DECA) is the primary agency involved.

Value Assessment

Rating: questionable

The contract value of $24.3M for meat resale is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates or similar government contracts for food supplies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This method bypasses the typical price discovery mechanisms found in competitive procurements, potentially leading to higher costs for the government.

Taxpayer Impact: The sole-source nature of this contract may result in taxpayers paying a premium for meat products due to the absence of competitive pressure to lower prices.

Public Impact

Military families and personnel may face higher prices for meat products at commissaries. Taxpayer funds are potentially being used less efficiently due to the lack of competitive bidding. The Defense Commissary Agency's procurement strategy warrants review to ensure fair pricing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency in pricing

Positive Signals

Essential food supply for military personnel
Established vendor relationship

Sector Analysis

This contract falls under the wholesale trade of general line groceries. Spending benchmarks for food procurement vary widely, but significant sole-source awards like this can deviate from cost-effective practices seen in competitive markets.

Small Business Impact

The data indicates this contract was awarded to Kraft Foods Global, Inc., a large corporation. There is no indication that small businesses were involved in this specific procurement, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award raises questions about the oversight applied to ensure the best value for the government. Further review of DECA's procurement justifications for sole-source contracts is recommended.

Related Government Programs

General Line Grocery Merchant Wholesalers
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award lacks competitive pricing.
Potential for inflated costs.
Limited transparency in procurement justification.
Missed opportunity for small business participation.
Questionable value for taxpayer money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 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 $24.3 million.

What is the period of performance?

Start: 2011-10-01. End: 2011-12-31.

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

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a specific justification was made, possibly due to unique capabilities, urgent needs, or limited vendor availability at the time. However, without explicit details on this justification, it's difficult to fully assess its validity and whether alternative competitive strategies were explored.

How does the $24.3M contract value compare to market prices for similar meat products?

Without specific details on the types and quantities of meat procured, a direct comparison to market prices is challenging. However, sole-source contracts inherently lack the price discovery benefits of competition. It is plausible that the government paid a higher price than it might have through a competitive bidding process, impacting overall value for money.

What is the potential impact on military families' access to affordable meat due to this contract structure?

While the contract is for resale, meaning the meat is intended for sale within commissaries, a sole-source award could indirectly affect affordability. If Kraft Foods charged a higher price to DECA due to lack of competition, these costs might be passed on to military families through commissary prices, potentially reducing their purchasing power.

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: $24,302,315

Exercised Options: $24,302,315

Current Obligation: $24,302,315

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3750

IDV Type: IDC

Timeline