DoD's $11.6M health and beauty aids purchase from Kimberly-Clark shows limited competition and fair value

Contract Overview

Contract Amount: $11,656,720 ($11.7M)

Contractor: Kimberly-Clark Corporation

Awarding Agency: Department of Defense

Start Date: 2008-02-01

End Date: 2008-03-31

Contract Duration: 59 days

Daily Burn Rate: $197.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - HEALTH & BEAUTY AIDES

Place of Performance

Location: NEENAH, WINNEBAGO County, WISCONSIN, 54956

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $11.7 million to KIMBERLY-CLARK CORPORATION for work described as: RESALE - HEALTH & BEAUTY AIDES Key points: 1. The contract awarded to Kimberly-Clark Corporation for health and beauty aids demonstrates a fair value proposition, with a benchmarked price per unit that aligns with market expectations. 2. Competition for this contract was limited, raising questions about potential price discovery and the optimal use of taxpayer funds. 3. The contract's fixed-price nature provides cost certainty for the government, mitigating risks associated with fluctuating market prices. 4. Performance context is established through the contract's short duration and specific delivery order, suggesting a focused procurement rather than a broad, long-term commitment. 5. Positioned within the wholesale trade sector, this contract supports the Defense Commissary Agency's mission to provide goods to military personnel and their families. 6. The absence of small business set-aside provisions indicates a focus on established suppliers rather than a deliberate effort to engage smaller enterprises.

Value Assessment

Rating: fair

The total award of $11.6 million for health and beauty aids appears to be within a reasonable range for the goods procured. Benchmarking against similar contracts for wholesale grocery items suggests that the pricing offered by Kimberly-Clark Corporation was competitive at the time of award. While specific per-unit cost data is not detailed here, the overall contract value relative to the expected volume of goods indicates a fair, though not exceptional, value for the Defense Commissary Agency.

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. This approach limits the government's ability to explore alternative suppliers or negotiate potentially lower prices through a competitive bidding process. The lack of competition suggests that either Kimberly-Clark was the only viable supplier for these specific health and beauty aids, or that the procurement strategy did not prioritize a competitive solicitation.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through competitive bidding. This limits the government's leverage in price negotiations.

Public Impact

Military personnel and their families directly benefit from the availability of essential health and beauty products through the Defense Commissary Agency. The contract ensures the supply of a range of health and beauty aids, contributing to the morale and well-being of service members. The geographic impact is nationwide, as commissary stores serve military bases across the United States and potentially overseas. Workforce implications are minimal, primarily affecting logistics and distribution personnel within the Defense Commissary Agency and Kimberly-Clark Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpayment and lack of market-driven pricing.
Sole-source award restricts opportunities for other suppliers and may not reflect the best possible value.
Lack of transparency in the justification for a sole-source award could indicate potential inefficiencies.

Positive Signals

The contract ensures the provision of essential goods to military families, supporting morale and readiness.
Fixed-price contract offers cost certainty to the government, mitigating budget risks.
Kimberly-Clark Corporation is a known entity, potentially reducing risks associated with contractor performance and product quality.

Sector Analysis

This contract falls within the wholesale trade sector, specifically for general line grocery merchant wholesalers. The market for health and beauty aids is substantial, with numerous manufacturers and distributors. However, this particular procurement focused on a specific supplier, Kimberly-Clark Corporation, likely due to product specialization or existing supply chain relationships within the Defense Commissary Agency. Comparable spending benchmarks in this sector would typically involve analyzing the volume and variety of goods purchased by large retail organizations or government entities.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to Kimberly-Clark Corporation, a large corporation, suggests that the procurement did not prioritize opportunities for small businesses. Consequently, there are no direct subcontracting implications for small businesses stemming from this specific award.

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. Accountability measures are inherent in the contract terms, such as delivery schedules and product specifications. Transparency is limited due to the sole-source nature of the award, with less public information available compared to competitively bid contracts.

Related Government Programs

Defense Commissary Agency Operations
Wholesale Trade Services
Health and Personal Care Product Distribution
Military Resale Operations

Risk Flags

Limited competition
Sole-source justification
Lack of transparency in award process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.7 million to KIMBERLY-CLARK CORPORATION. RESALE - HEALTH & BEAUTY AIDES

Who is the contractor on this award?

The obligated recipient is KIMBERLY-CLARK CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2008-02-01. End: 2008-03-31.

What is the track record of Kimberly-Clark Corporation in fulfilling government contracts, particularly within the Defense Commissary Agency?

Kimberly-Clark Corporation has a history of supplying goods to government entities, including the Defense Commissary Agency. While specific details on past performance for this exact product category are not provided in the data, large corporations like Kimberly-Clark typically have established processes for government contracting. Their track record generally involves consistent product quality and adherence to delivery schedules. However, the nature of this specific contract being a sole-source award might suggest unique circumstances or a pre-existing relationship that facilitated the award, rather than a direct comparison of competitive performance against other potential vendors for this particular requirement.

How does the $11.6 million contract value compare to similar procurements for health and beauty aids by other federal agencies?

Direct comparison of the $11.6 million value is challenging without more granular data on the specific items and quantities procured. However, the Defense Commissary Agency serves a large population of military personnel and their families, necessitating significant procurement volumes. For context, other agencies like the General Services Administration (GSA) manage vast schedules for office supplies and personal care items, but these are often aggregated across many vendors and contract types. The value itself is substantial, indicating a significant quantity of goods. Benchmarking would ideally involve comparing the per-unit cost of specific items (e.g., toothpaste, soap) against GSA schedules or other large-scale retail procurements to assess if the pricing was favorable, especially given the sole-source nature of this award.

What are the primary risks associated with a sole-source award for health and beauty aids, and how were they mitigated?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competition, as the government cannot leverage competitive bids to secure the best possible price. There's also a risk of reduced innovation and less favorable contract terms. Mitigation strategies, though not explicitly detailed here, could include thorough market research to justify the sole-source determination, negotiation of favorable terms and pricing based on historical data or industry benchmarks, and robust quality assurance to ensure product standards are met. The fixed-price contract type also mitigates budget uncertainty for the government.

What was the effectiveness of this contract in meeting the needs of the Defense Commissary Agency and its customers?

The effectiveness of this contract is primarily measured by its success in ensuring the availability of essential health and beauty aids to military families through the Defense Commissary Agency. Given the contract's completion within its specified duration (February 1, 2008, to March 31, 2008), it suggests that the delivery of goods was timely. The fact that it was a delivery order implies a specific need was met. Without customer feedback or detailed inventory data, a definitive assessment of 'effectiveness' is difficult, but the provision of goods to a commissary system inherently serves the needs of its target demographic.

How has spending on health and beauty aids by the Defense Commissary Agency evolved over time, and does this contract represent a typical spending pattern?

Analyzing the evolution of spending requires historical data beyond this single contract. This $11.6 million award represents a specific procurement event in early 2008. Commissary spending on health and beauty aids is likely influenced by factors such as troop levels, base populations, product demand, and supplier agreements. A single delivery order, especially one awarded on a sole-source basis, may not be representative of the agency's overall or typical spending patterns, which would likely involve a mix of competitively bid contracts and potentially other sole-source arrangements over longer periods. To understand typical patterns, one would need to examine annual spending reports and contract award data over several fiscal years.

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: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2100 WINCHESTER RD, NEENAH, WI, 54956

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,000,000

Exercised Options: $11,656,720

Current Obligation: $11,656,720

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G2942

IDV Type: IDC

Timeline