DoD's $19.8M grocery resale contract awarded to Conagra Foods for general line wholesale distribution

Contract Overview

Contract Amount: $19,857,179 ($19.9M)

Contractor: Conagra Foods Packaged Foods, LLC

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2011-12-31

Contract Duration: 91 days

Daily Burn Rate: $218.2K/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: OMAHA, DOUGLAS County, NEBRASKA, 68122

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $19.9 million to CONAGRA FOODS PACKAGED FOODS, LLC for work described as: RESALE - MISCELLANEOUS GROCERY Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost savings through competition. 2. The contract value of $19.8M for a 3-month period suggests a high per-diem spending rate. 3. Focus on resale of miscellaneous grocery items indicates a specific niche within the Defense Commissary Agency's supply chain. 4. The firm fixed-price contract type offers cost certainty but may limit flexibility for the agency. 5. Awarded to a single supplier, Conagra Foods, highlighting potential single-source dependency. 6. The contract duration of 91 days is relatively short, suggesting it may be a bridge or task order.

Value Assessment

Rating: questionable

The contract value of approximately $19.8 million for a 91-day period equates to a daily spend of over $217,000. Without comparable contracts for similar niche grocery resale services, it is difficult to definitively benchmark value. However, the non-competitive award mechanism raises concerns about whether the Defense Commissary Agency secured the most advantageous pricing possible. Further analysis would require understanding the specific items procured and their market prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating that a full and open competition was not conducted. The specific reasons for this sole-source award are not detailed in the provided data. A sole-source award typically means only one vendor was considered capable of meeting the requirement, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding, as the government did not explore alternative suppliers or negotiate prices against multiple offers.

Public Impact

Military personnel and their families benefit from the availability of grocery items through the Defense Commissary Agency. The contract supports the supply chain for miscellaneous grocery items, ensuring a range of products are available. The geographic impact is likely widespread, serving commissary locations managed by the Defense Commissary Agency. The contract supports the wholesale distribution sector, indirectly impacting jobs in logistics and food supply.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award raises concerns about vendor lock-in and future pricing.
Short contract duration could indicate a stop-gap measure, potentially leading to repeated non-competitive awards.

Positive Signals

Firm fixed-price contract provides budget certainty.
Award to an established supplier like Conagra Foods may ensure reliable delivery.
Contract supports essential goods for military families.

Sector Analysis

This contract falls within the wholesale trade sector, specifically for general line grocery merchants. The Defense Commissary Agency (DeCA) operates as a retail arm of the Department of Defense, providing groceries to military personnel and their families. The market for wholesale grocery distribution is large and competitive, but this specific contract appears to serve a unique governmental need, potentially limiting the pool of eligible contractors. Benchmarking would require comparing DeCA's procurement practices to other large institutional buyers.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this award (sb: false). As this was a sole-source award, there were likely no subcontracting opportunities specifically set aside for small businesses as part of this particular contract. The impact on the small business ecosystem is minimal for this specific award, though DeCA's broader procurement strategy may include small business considerations elsewhere.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Commissary Agency's contracting officers and potentially the Department of Defense's Inspector General. Transparency is limited by the sole-source nature of the award, as the justification and evaluation process are not publicly detailed. Accountability would be measured by the contractor's adherence to the firm fixed-price terms and delivery schedules.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
High daily spend rate

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.9 million to CONAGRA FOODS PACKAGED FOODS, LLC. RESALE - MISCELLANEOUS GROCERY

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 $19.9 million.

What is the period of performance?

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

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

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. The specific justification, such as unique capabilities, urgent need, or lack of market availability, is not detailed. Typically, sole-source justifications are documented and approved internally within the agency, often citing reasons like the unavailability of other sources, a critical need that cannot be met by competition, or a follow-on contract where only one source can provide the required service or item. Without this documentation, it's impossible to fully assess the necessity of the sole-source approach.

How does the pricing of this contract compare to similar grocery resale contracts within the federal government or private sector?

Direct comparison is challenging without knowing the exact 'miscellaneous grocery' items procured and their quantities. However, the contract's total value of $19.8 million over 91 days ($217,557 per day) is substantial. To benchmark, one would need to identify contracts for similar wholesale grocery distribution services, ideally with comparable delivery volumes and item categories. Analyzing the unit prices for key commodities within the contract against market indices or other government contracts (like GSA schedules or other agency food buys) would be necessary. The sole-source nature, however, inherently limits the ability to confirm if the price is competitive.

What are the potential risks associated with awarding a contract of this value on a sole-source basis?

The primary risk of a sole-source award is the potential for paying a higher price than would be achieved through competition. Without competing offers, the government lacks leverage to negotiate the best possible terms and pricing. There's also a risk of vendor complacency, as the contractor faces no immediate competitive threat. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if that supplier experiences disruptions. For a contract of this size and duration, these risks are amplified, potentially impacting the Defense Commissary Agency's budget and operational efficiency.

What is the historical spending pattern for this specific type of grocery resale service by the Defense Commissary Agency?

The provided data only captures a single contract award from October 1, 2011, to December 31, 2011. To understand historical spending patterns, one would need to access procurement data for previous and subsequent periods. Analyzing trends in contract values, award types (competitive vs. sole-source), and awarded vendors for similar 'miscellaneous grocery resale' services would reveal whether this $19.8 million award is typical, an outlier, or part of a recurring sole-source arrangement. Without this broader historical context, it's difficult to assess if spending has increased, decreased, or remained consistent over time.

What specific types of 'miscellaneous grocery' items are included in this contract, and how critical are they to commissary operations?

The description 'RESALE - MISCELLANEOUS GROCERY' is broad and does not specify the exact items. These could range from specialty food items, non-standard pantry staples, or seasonal products not typically covered under larger, more standardized grocery contracts. The criticality would depend on their role in fulfilling the commissary's mission to provide a full range of goods to service members and their families. If these items are unique or highly sought after, their availability could be crucial for customer satisfaction, even if they represent a smaller portion of the overall grocery offering.

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: $19,857,179

Exercised Options: $19,857,179

Current Obligation: $19,857,179

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4069

IDV Type: BOA

Timeline