DoD's $11.8M contract for meat resale to Tyson Fresh Meats Inc. shows fair value

Contract Overview

Contract Amount: $11,881,383 ($11.9M)

Contractor: Tyson Fresh Meats Inc

Awarding Agency: Department of Defense

Start Date: 2008-06-01

End Date: 2008-06-30

Contract Duration: 29 days

Daily Burn Rate: $409.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE

Sector: Other

Official Description: MEAT FOR RESALE

Place of Performance

Location: DAKOTA DUNES, UNION County, SOUTH DAKOTA, 57049

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $11.9 million to TYSON FRESH MEATS INC for work described as: MEAT FOR RESALE Key points: 1. The contract represents a significant portion of the Defense Commissary Agency's spending on meat resale. 2. Competition dynamics suggest a stable market for meat supply to the military. 3. Risk indicators are low given the nature of the commodity and established supplier. 4. Performance context is tied to ensuring consistent food supply for service members. 5. This contract positions Tyson as a key supplier within the Defense Commissary Agency's food service sector.

Value Assessment

Rating: good

The contract value of $11.8 million for meat resale appears reasonable when benchmarked against similar large-scale food supply contracts for government agencies. While specific per-unit cost data is not provided, the fixed-price nature of the contract suggests that pricing was determined upfront, likely through a competitive bidding process. The duration of the contract (29 days) indicates a short-term need, and the total value is consistent with the scale of operations for the Defense Commissary Agency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 3 bidders suggests a healthy level of competition for this type of government contract. This competitive environment generally leads to better price discovery and ensures that the government secures goods and services at market-competitive rates.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for essential goods like meat for service members.

Public Impact

Service members and their families benefit from the consistent availability of quality meat products through commissaries. The contract supports the Defense Commissary Agency's mission to provide groceries to military personnel at a savings. Geographic impact is primarily focused on military installations served by the Defense Commissary Agency, with distribution likely occurring across various locations. Workforce implications include support for jobs in meat processing, logistics, and distribution at Tyson Fresh Meats Inc. and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in commodity markets impacting long-term value if not managed effectively.
Dependence on a single large supplier could pose a risk if supply chain disruptions occur.

Positive Signals

Award to a well-established and reputable supplier like Tyson Fresh Meats Inc. indicates reliability.
Fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a robust market and potential for competitive pricing.

Sector Analysis

The meat processing and resale industry is a significant part of the broader food and agriculture sector. Government contracts for food supplies are crucial for maintaining the morale and well-being of military personnel. This contract fits within the Defense Commissary Agency's broader strategy of procuring a wide range of food products to support its network of commissaries, often competing with large commercial food distributors.

Small Business Impact

This contract was not specifically set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large corporation like Tyson Fresh Meats Inc. suggests that the primary focus was on meeting the scale and requirements of the Defense Commissary Agency, rather than specifically fostering small business participation in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting officers and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the fixed-price contract terms, requiring Tyson to deliver specified goods. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available.

Related Government Programs

Defense Commissary Agency Food Procurement
Department of Defense Food Services
Federal Meat Supply Contracts
Government Food Resale Programs

Risk Flags

Potential for commodity price volatility
Supply chain disruption risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.9 million to TYSON FRESH MEATS INC. MEAT FOR RESALE

Who is the contractor on this award?

The obligated recipient is TYSON FRESH MEATS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.9 million.

What is the period of performance?

Start: 2008-06-01. End: 2008-06-30.

What is the historical spending pattern for meat resale contracts by the Defense Commissary Agency?

Historical spending data for meat resale contracts by the Defense Commissary Agency reveals a consistent need for these products to support military personnel and their families. Over the years, the agency has awarded numerous contracts for various types of meat, often through competitive bidding processes. While specific dollar amounts fluctuate based on market conditions, demand, and contract duration, the overall trend indicates a sustained commitment to providing meat products. The agency typically seeks to secure these supplies through fixed-price contracts to manage costs effectively. Analysis of past awards shows a mix of large, multi-year contracts and smaller, short-term delivery orders, reflecting different procurement strategies and immediate needs. The presence of major meat processors as frequent awardees underscores the consolidated nature of the supply chain for such large-volume government procurements.

How does the per-unit cost of meat under this contract compare to commercial market rates?

Direct comparison of per-unit costs for this specific contract against commercial market rates is challenging without access to the detailed pricing breakdown. Government contracts often include specific quality standards, delivery requirements, and packaging specifications that can influence the final price. While the Defense Commissary Agency aims to provide goods at a discount compared to civilian retailers, the wholesale cost negotiated through a competitive bid process is the primary benchmark. Typically, large government contracts for commodities like meat are expected to be priced competitively at the wholesale level. Fluctuations in commodity markets, transportation costs, and the specific cuts or types of meat procured would all affect per-unit pricing. Without the granular data, it's difficult to definitively state if the per-unit cost was higher or lower than typical commercial wholesale rates, but the competitive award process suggests it was aligned with market expectations for bulk procurement.

What are the key performance indicators (KPIs) used to evaluate Tyson Fresh Meats Inc.'s performance under this contract?

Key performance indicators (KPIs) for a meat resale contract like this typically focus on product quality, timely delivery, and adherence to specifications. For Tyson Fresh Meats Inc., the Defense Commissary Agency would likely monitor metrics such as the percentage of deliveries that meet quality standards (e.g., grade, freshness, absence of defects), on-time delivery rates to designated commissaries, and compliance with any specific packaging or handling instructions. Contractual terms often include provisions for penalties for non-compliance or rewards for exceptional performance. While specific KPIs are usually detailed within the contract's statement of work, the overarching goal is to ensure a reliable and high-quality supply of meat products to maintain commissary operations and customer satisfaction among service members and their families.

What is the track record of Tyson Fresh Meats Inc. in fulfilling government contracts, particularly for the Department of Defense?

Tyson Fresh Meats Inc. has a significant track record of fulfilling government contracts, including those with the Department of Defense and other federal agencies. As a major player in the food processing industry, the company regularly engages in large-scale supply agreements for various food products. Their experience typically includes providing meat and poultry products to military installations, commissaries, and other government facilities. Past performance reviews generally indicate a capacity to meet the demanding requirements of government procurement, including quality standards, delivery schedules, and volume. While specific contract histories can vary, Tyson's established presence in the market suggests a demonstrated ability to navigate the complexities of government contracting, including compliance with regulations and logistical challenges associated with supplying dispersed military communities.

Are there any identified risks associated with this specific contract or the supplier?

Risks associated with this specific contract are generally low, given the nature of the commodity and the established supplier. The primary risks would revolve around potential commodity price volatility in the meat market, which could impact the long-term value if the contract were extended or if future contracts are negotiated. Supply chain disruptions, though unlikely for a major supplier like Tyson, could also pose a risk to timely delivery. From a supplier risk perspective, Tyson Fresh Meats Inc. is a large, reputable company with extensive experience in government contracting, mitigating concerns about their capacity or reliability. However, as with any large-scale food supply contract, ensuring consistent quality and adherence to strict food safety standards remains an ongoing consideration that requires diligent oversight.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Animal (except Poultry) Slaughtering

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyson Foods Inc. (UEI: 006903702)

Address: 800 STEVENS PORT DRIVE, NORTH SIOUX CITY, SD, 57049

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,881,383

Exercised Options: $11,881,383

Current Obligation: $11,881,383

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0207D0001

IDV Type: IDC

Timeline