DoD's $28.2M grocery resale contract to Kraft Foods Global, Inc. awarded via non-competitive means

Contract Overview

Contract Amount: $28,196,490 ($28.2M)

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: $309.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - MISCELLANEOUS GROCERY

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $28.2 million to KRAFT FOODS GLOBAL, INC. for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract duration was short at 91 days, suggesting a tactical or short-term need. 3. Awarded as a delivery order, implying it was part of a larger contract vehicle. 4. The North American Industry Classification System (NAICS) code 424410 points to wholesale grocery distribution. 5. The contract was not set aside for small businesses, nor does it indicate subcontracting goals. 6. The prime contractor, Kraft Foods Global, Inc., is a major player in the food industry.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without knowing the broader contract it belongs to or the specific goods procured. However, the total award amount of $28.2 million for a 91-day period suggests a significant volume of goods. Without competitive bidding, it's difficult to ascertain if this price represents optimal value for money compared to market alternatives. The lack of detailed performance metrics or comparison data makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or non-competitive procurement. This means only one vendor was solicited or considered. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract. It suggests a specific need that could only be met by this particular contractor, or a failure to adequately plan for competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially leading to less efficient use of public funds.

Public Impact

Military personnel and their families stationed in Illinois benefit from access to grocery items through the Defense Commissary Agency. The contract supports the Defense Commissary Agency's mission to provide high-quality goods at a savings to service members. The geographic impact is primarily within Illinois, where the delivery order was fulfilled. The contract supports jobs within Kraft Foods Global, Inc. and its distribution network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price scrutiny and potential savings.
Short contract duration raises questions about long-term strategic sourcing and planning.
Lack of small business participation noted.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to a known entity (Kraft Foods Global) may imply reliability for specific product needs.
Supports essential services for military families.

Sector Analysis

This contract falls within the wholesale trade sector, specifically general line grocery merchant wholesaling. The Defense Commissary Agency (DeCA) operates commissaries worldwide, providing groceries to military personnel and their families. This sector is characterized by large distributors and manufacturers supplying a wide range of food products. Comparable spending benchmarks would typically involve other large-scale food distribution contracts to government entities or large retail chains, which often involve significant volume discounts.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award, there was no opportunity for small businesses to compete. There is no information provided regarding subcontracting plans or performance, suggesting that small business participation was not a primary consideration for this specific delivery order.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DeCA) and potentially the Department of Defense's Inspector General. As a delivery order under a larger contract vehicle, oversight might be integrated into the management of that parent contract. Transparency is limited due to the non-competitive nature and the lack of publicly available performance reports specific to this order.

Related Government Programs

Defense Commissary Agency Operations
Grocery Resale Programs
Wholesale Food Distribution Contracts
Department of Defense Procurement

Risk Flags

Non-competitive award
Lack of transparency on justification for sole-source
Potential for higher costs due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.2 million to KRAFT FOODS GLOBAL, INC.. RESALE - MISCELLANEOUS GROCERY

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 $28.2 million.

What is the period of performance?

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

What was the specific justification for awarding this contract on a non-competitive basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION' (ct: 'NOT AVAILABLE FOR COMPETITION'). This classification typically implies that only one responsible source was available or that the government had urgent, compelling reasons to award without competition. Specific justifications, such as proprietary data, unique capabilities, or extreme urgency, would normally be detailed in the contract award justification documentation (e.g., a Justification and Approval document). Without access to that specific documentation, the precise reason remains unknown, but it signifies a departure from full and open competition.

How does the per-unit cost of goods under this contract compare to similar contracts or market rates?

A direct per-unit cost comparison is not feasible with the provided data. The contract value is a total award amount ($28,196,489.84) for a 91-day period, and the specific items procured are described broadly as 'RESALE - MISCELLANEOUS GROCERY.' Without itemized pricing, quantities, or details of the specific grocery items, benchmarking per-unit costs against other contracts or market rates is impossible. Furthermore, as a sole-source award, there's no competitive baseline to establish a fair market price.

What is the track record of Kraft Foods Global, Inc. in fulfilling similar government contracts?

Kraft Foods Global, Inc. is a major food manufacturer and distributor with a significant presence in the commercial market. While specific details on their historical performance with the Defense Commissary Agency or other government entities for similar 'miscellaneous grocery' resale contracts are not provided in this data snippet, their scale suggests experience in large-volume distribution. Government contract performance databases (like SAM.gov or FPDS) would typically contain more detailed information on past performance ratings, past issues, and the volume/types of contracts previously awarded to the company.

What were the key performance indicators (KPIs) or service level agreements (SLAs) for this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, government contracts include clauses related to delivery timeliness, product quality, order accuracy, and potentially inventory management. For a grocery resale contract, adherence to food safety standards and maintaining adequate stock levels would be critical. The absence of this information in the summary data suggests it might be detailed in the full contract document or associated performance work statement.

What is the historical spending pattern for 'RESALE - MISCELLANEOUS GROCERY' by the Defense Commissary Agency?

The provided data only covers a single delivery order from October 1, 2011, to December 31, 2011, totaling approximately $28.2 million. To understand historical spending patterns for 'RESALE - MISCELLANEOUS GROCERY' by the Defense Commissary Agency (DeCA), one would need to analyze spending data over multiple fiscal years. This would involve querying procurement databases for similar contracts awarded by DeCA, looking at the total value, frequency, and types of contractors involved. This single data point is insufficient to establish a trend or pattern.

Were there any identified risks or challenges associated with this specific contract award or performance?

The primary risk indicated by the data is the non-competitive award ('NOT AVAILABLE FOR COMPETITION'). This inherently carries risks related to potentially higher costs due to lack of price competition, and reduced incentive for the contractor to innovate or optimize service delivery. Other potential risks, not explicitly stated but common in such contracts, could include supply chain disruptions, quality control issues with perishable goods, or logistical challenges in timely delivery to commissary locations. The short duration might also indicate a risk of service interruption if not properly managed.

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: $28,196,490

Exercised Options: $28,196,490

Current Obligation: $28,196,490

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3755

IDV Type: IDC

Timeline