DoD's $13.7M Meat Purchase from Tyson: Fixed Price Delivery Order for Resale

Contract Overview

Contract Amount: $13,773,521 ($13.8M)

Contractor: Tyson Fresh Meats Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-01

End Date: 2008-09-30

Contract Duration: 29 days

Daily Burn Rate: $474.9K/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 $13.8 million to TYSON FRESH MEATS INC for work described as: MEAT FOR RESALE Key points: 1. Significant expenditure on essential goods for resale. 2. Dominated by a single large supplier, Tyson. 3. Fixed-price contract limits upside for government but offers cost certainty. 4. Procurement falls under the Animal Slaughtering industry.

Value Assessment

Rating: fair

The fixed-price contract provides cost certainty for this $13.7M purchase. However, without more data on market fluctuations or alternative suppliers, it's difficult to definitively assess if this price represents excellent value compared to similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the data indicates a single delivery order, which may not fully reflect the competitive landscape over the contract's duration.

Taxpayer Impact: Taxpayers funded this purchase of meat for resale, with the fixed-price structure aiming to control costs. The ultimate impact depends on the efficiency of the supply chain and the resale price.

Public Impact

Ensures availability of meat products for military personnel and their families through commissaries. Supports a major meat processing company, impacting the agricultural supply chain. The fixed-price nature of the contract provides budget predictability for the Defense Commissary Agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases if market conditions change significantly post-award.
Reliance on a single large supplier could pose supply chain risks.
Lack of detailed cost breakdown makes value assessment challenging.

Positive Signals

Procurement under full and open competition.
Fixed-price contract offers cost certainty.
Supports essential goods for military families.

Sector Analysis

This procurement falls within the Animal Slaughtering industry (NAICS 311611), a critical component of the food supply chain. Spending benchmarks for this sector are highly variable, influenced by commodity prices and demand.

Small Business Impact

The data does not indicate any specific set-asides for small businesses in this procurement. The award went to a large corporation, Tyson Fresh Meats Inc., suggesting limited direct impact on small businesses within this specific contract.

Oversight & Accountability

The Defense Commissary Agency is responsible for this procurement. Oversight would focus on contract compliance, delivery timeliness, and product quality to ensure taxpayer funds are used effectively.

Related Government Programs

Animal (except Poultry) Slaughtering
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Single large supplier award.
Fixed-price contract for potentially volatile commodity.
Limited insight into competitive pricing dynamics.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.8 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 $13.8 million.

What is the period of performance?

Start: 2008-09-01. End: 2008-09-30.

What was the competitive landscape during the bidding process, and did multiple bids significantly drive down the price?

While the contract was awarded under 'full and open competition,' the data only shows a single delivery order to Tyson Fresh Meats Inc. Further analysis would be needed to confirm the number of bids received and how competitive pricing was achieved. The fixed-price nature suggests a focus on cost certainty over potential savings from market dips.

What are the risks associated with a fixed-price contract for perishable goods like meat, especially over a 29-day period?

A fixed-price contract for perishable goods carries the risk of the government overpaying if market prices for meat decrease during the contract period. Conversely, if prices rise significantly, the supplier might face reduced profit margins, potentially impacting quality or future willingness to bid. The short duration mitigates some of these risks.

How does this $13.7M purchase compare to typical annual spending on meat for resale by the Defense Commissary Agency?

This $13.7 million purchase represents a substantial single order. To assess its true scale, it should be compared against the Defense Commissary Agency's overall annual budget for meat procurement and its average spending per delivery order. Without this context, it's difficult to determine if this is a routine, large, or exceptional expenditure.

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: $13,773,521

Exercised Options: $13,773,521

Current Obligation: $13,773,521

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0207D0001

IDV Type: IDC

Timeline