DoD's $17M health and beauty aids purchase from Kimberly-Clark Corporation raises questions on value and competition

Contract Overview

Contract Amount: $16,986,026 ($17.0M)

Contractor: Kimberly-Clark Corporation

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2009-03-31

Contract Duration: 89 days

Daily Burn Rate: $190.9K/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 $17.0 million to KIMBERLY-CLARK CORPORATION for work described as: RESALE - HEALTH & BEAUTY AIDES Key points: 1. The contract's value proposition is unclear given the lack of detailed performance metrics and competitive bidding. 2. Limited competition for this significant purchase may have led to suboptimal pricing for the government. 3. The fixed-price contract structure offers some cost certainty but doesn't guarantee best value. 4. This purchase falls within the broader category of wholesale trade for consumer goods. 5. The short duration of the contract (89 days) suggests a specific, immediate need rather than long-term strategic sourcing. 6. The absence of small business participation is noted, with no set-aside or subcontracting requirements specified.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of specific performance data and comparable contract details. The fixed-price nature provides cost predictability, but without a competitive process, it's difficult to ascertain if the pricing reflects market rates or represents a fair value for the goods procured. The total award amount of over $16.9 million for an 89-day delivery period warrants scrutiny regarding unit costs and overall efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This significantly limits the opportunity for multiple vendors to bid, which typically drives down prices and encourages innovation. The 'NOT AVAILABLE FOR COMPETITION' designation suggests potential reasons such as urgency, lack of available sources, or specific government requirements that only one contractor could meet. However, the lack of competition raises concerns about price discovery and potential overpayment.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most cost-effective pricing available in the market, as the government did not leverage competitive pressures to secure the best deal.

Public Impact

Military personnel and their families stationed in Wisconsin likely benefited from the availability of health and beauty products. The Defense Commissary Agency (DeCA) facilitated the distribution of these essential consumer goods. The contract supported the supply chain for retail operations within military installations. The procurement indirectly supported jobs within Kimberly-Clark Corporation and its distribution network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment and suboptimal pricing.
Limited transparency into the justification for a sole-source award.
Absence of small business participation or subcontracting goals.
Short contract duration may indicate reactive procurement rather than strategic planning.
No clear performance metrics provided to assess the effectiveness of this specific purchase.

Positive Signals

The contract ensured the availability of necessary health and beauty products for military personnel and families.
Fixed-price contract provides cost certainty for the government.
Procurement was managed by the Defense Commissary Agency, indicating established processes for retail goods.
Kimberly-Clark Corporation is a known entity in the consumer goods market.

Sector Analysis

This contract falls within the wholesale trade sector, specifically for general line grocery merchant wholesalers, though the goods are health and beauty aids. The market for consumer packaged goods, including health and beauty items, is vast and competitive. However, government procurement for such items, especially through sole-source channels, can deviate from typical commercial market dynamics. Comparable spending benchmarks are difficult to establish without knowing the specific product mix and quantities, but large-scale government purchases of consumer goods often involve significant dollar values.

Small Business Impact

This contract did not include any small business set-aside provisions, nor is there any indication of subcontracting opportunities for small businesses. The sole-source nature of the award further precludes small businesses from participating in this specific procurement. This suggests that the primary focus was on fulfilling the requirement through a single, established vendor, potentially overlooking opportunities to engage and support the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DeCA) and potentially the Department of Defense's Inspector General if specific concerns or irregularities were identified. The fixed-price nature of the contract provides a degree of financial oversight by locking in costs. However, the lack of competition and detailed performance metrics limits the scope for robust performance-based oversight and accountability.

Related Government Programs

Defense Commissary Agency Operations
Procurement of Consumer Goods
Wholesale Trade Services
Health and Beauty Product Supply Chains

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Absence of performance metrics hinders value assessment.
No small business participation included.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 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 $17.0 million.

What is the period of performance?

Start: 2009-01-01. End: 2009-03-31.

What specific health and beauty products were included in this $16.9 million purchase, and what were their unit costs?

The provided data categorizes the purchase as 'RESALE - HEALTH & BEAUTY AIDES' but does not specify the individual products or their unit costs. The total award amount of $16,986,026.18 was for a fixed price over an 89-day period. Without a detailed breakdown of SKUs, quantities, and corresponding unit prices, it is impossible to perform a granular cost analysis or benchmark against market rates for specific items. This lack of transparency makes it difficult to assess the value received for the funds expended.

What was the justification for awarding this contract on a sole-source basis to Kimberly-Clark Corporation?

The contract was designated as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. Typical justifications for sole-source procurements include urgent and compelling needs, unique capabilities of a single contractor, or situations where only one responsible source can provide the required supplies or services. However, the specific rationale for this particular award to Kimberly-Clark Corporation for health and beauty aids is not detailed in the provided information. A thorough review would require accessing the official justification documentation (e.g., a Justification and Approval document) to understand the government's reasoning.

How does the $16.9 million award for an 89-day period compare to typical spending for similar goods by the Defense Commissary Agency?

Comparing this $16.9 million award for an 89-day period to typical spending is difficult without more context on the specific product mix and volume. However, an average daily spend of approximately $190,854 ($16.9M / 89 days) for health and beauty aids suggests a substantial procurement. The Defense Commissary Agency (DeCA) manages a large retail operation, and significant procurements are expected. To assess if this is typical, one would need to analyze historical spending patterns for similar product categories, contract durations, and vendor types within DeCA's operations. The sole-source nature of this award also raises questions about whether this daily spend represents a competitive market rate.

What performance standards or metrics were associated with this contract to ensure quality and timely delivery?

The provided data does not include information on specific performance standards or metrics for this contract. Contracts typically outline requirements for quality, delivery timelines, and other performance aspects. For a fixed-price contract, the primary focus is often on the delivery of goods as specified. However, without explicit metrics, it is challenging to objectively evaluate the contractor's performance beyond basic fulfillment of the order. The absence of detailed performance data limits the ability to assess the overall effectiveness and efficiency of this procurement.

Were there any opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors?

The contract details indicate that this was not a small business set-aside ('sb': false) and there is no mention of subcontracting requirements. Given the sole-source nature ('ct': 'NOT AVAILABLE FOR COMPETITION'), it is highly unlikely that small businesses were considered as prime contractors for this specific award. Without specific subcontracting clauses or goals, there is no direct mechanism within this contract to ensure small business participation. This suggests that the procurement relied entirely on the capabilities of the awarded contractor, Kimberly-Clark Corporation.

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: $16,986,026

Exercised Options: $16,986,026

Current Obligation: $16,986,026

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G2942

IDV Type: IDC

Timeline