DoD's $14.3M grocery resale contract to CONOPCO, Inc. awarded via non-competitive means

Contract Overview

Contract Amount: $14,359,811 ($14.4M)

Contractor: Conopco, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2009-03-31

Contract Duration: 89 days

Daily Burn Rate: $161.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - DRY GROCERY PRODUCTS

Place of Performance

Location: TRUMBULL, FAIRFIELD County, CONNECTICUT, 06611

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to CONOPCO, INC. for work described as: RESALE - DRY GROCERY PRODUCTS Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 89 days suggests a short-term need or a bridge to a larger procurement. 3. Fixed-price contract type offers some cost certainty for the government, but the lack of competition is a concern. 4. The National Stock Number (NSN) 424410 indicates a focus on general line grocery merchant wholesale. 5. The contracting agency is the Defense Commissary Agency (DECA), responsible for providing groceries to military personnel and families. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery contract or schedule.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to assess if the $14.3 million price represents good value for money. Benchmarking against similar contracts for wholesale grocery products would be necessary to determine fair pricing. The fixed-price nature provides some cost control, but the lack of competition raises concerns about potential overpayment compared to a fully competed scenario. The short duration of 89 days also makes it challenging to establish long-term value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, CONOPCO, INC., was solicited. This significantly limits competition and the opportunity for price discovery through market forces. The rationale for a sole-source award is not provided, but it typically stems from unique capabilities, urgent needs, or the absence of other responsible sources. The lack of multiple bidders means the government did not benefit from a competitive environment to drive down prices.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition. Without a bidding process, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

Military personnel and their families benefit from the availability of grocery products through the Defense Commissary Agency. The contract ensures the supply of dry grocery products, contributing to the morale and well-being of service members. The geographic impact is likely nationwide, supporting commissary operations across various military installations. The contract supports the wholesale distribution of groceries, indirectly impacting the food supply chain and potentially related logistics jobs.

Waste & Efficiency Indicators

Waste Risk Score: 30 / 10

Warning Flags

Sole-source award limits competitive pricing and taxpayer value.
Short contract duration (89 days) raises questions about long-term strategy and potential for price fluctuations.
Lack of transparency regarding the justification for sole-source award.

Positive Signals

Fixed-price contract type provides some cost predictability.
Ensures availability of essential grocery products for military families.

Sector Analysis

The wholesale grocery market is a mature and competitive sector. Contracts for supplying such goods to government entities, like the Defense Commissary Agency, are typically awarded through competitive processes to ensure best value. The size of this specific contract, approximately $14.3 million, is moderate within the broader federal procurement landscape for food and grocery supplies. Comparable spending benchmarks would involve analyzing other DECA contracts or similar large-scale food distribution agreements.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to CONOPCO, INC., it is unlikely that small businesses were directly involved in fulfilling this specific contract, unless they were subcontractors to the prime. Further analysis would be needed to determine if any small business participation was mandated or occurred.

Oversight & Accountability

Oversight for this contract would fall under the Defense Commissary Agency (DECA). As a delivery order, it is likely managed within a broader contract vehicle. Accountability measures would involve performance monitoring against the terms of the fixed-price contract. Transparency is limited due to the sole-source nature and the lack of publicly available justification for this award method.

Related Government Programs

Defense Commissary Agency Operations
Wholesale Food Distribution Contracts
Federal Grocery Procurement

Risk Flags

Sole-source award
Lack of competition
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to CONOPCO, INC.. RESALE - DRY GROCERY PRODUCTS

Who is the contractor on this award?

The obligated recipient is CONOPCO, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

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

What is the track record of CONOPCO, INC. with federal contracts, particularly with the Defense Commissary Agency?

CONOPCO, INC. (a subsidiary of Unilever) has a history of federal contracting, often through various product lines. For the Defense Commissary Agency (DECA), their involvement typically relates to specific branded consumer goods. While this contract is for general line grocery products, CONOPCO's prior experience with DECA suggests familiarity with their operational requirements and distribution channels. However, the scale and nature of this specific $14.3 million award as a sole-source delivery order warrants scrutiny. A deeper dive into their past performance ratings, any past disputes, or contract modifications with DECA would provide a clearer picture of their reliability and performance history in fulfilling large-scale grocery supply needs.

How does the $14.3 million value of this contract compare to similar federal grocery resale contracts?

Comparing the $14.3 million value requires context regarding the contract's scope, duration, and the specific types of grocery products procured. This contract, with a duration of only 89 days, represents a significant expenditure for a short period. Federal contracts for wholesale grocery distribution can range widely, from smaller, specialized procurements to massive, multi-year agreements supporting entire military branches or regions. Without knowing the exact product mix and volume, a direct comparison is challenging. However, for a 3-month period, $14.3 million suggests a substantial volume of goods, potentially indicating a high demand or a strategic procurement decision. Benchmarking against other DECA contracts for similar product categories, even if longer in duration, would be essential to assess if this price point is competitive or indicative of a premium.

What are the primary risks associated with this sole-source award for federal grocery supply?

The primary risk associated with this sole-source award is the lack of price competition, which can lead to inflated costs for taxpayers. Without multiple bids, CONOPCO, INC. faced no pressure to offer the lowest possible price. This also reduces transparency and makes it difficult to ascertain if the government is receiving fair market value. Another risk is potential vendor lock-in or complacency, as the contractor may not feel compelled to innovate or optimize services when competition is absent. Furthermore, if CONOPCO, INC. has limited capacity or faces unforeseen issues, the short-term nature of the contract and the lack of alternative sources could lead to supply chain disruptions for the Defense Commissary Agency.

What is the expected program effectiveness given the contract's terms and sole-source nature?

The program effectiveness hinges on CONOPCO, INC.'s ability to deliver the specified dry grocery products reliably and on time, as outlined in the fixed-price contract. The sole-source award, while potentially leading to higher costs, does not inherently preclude effective delivery if the contractor is capable and motivated. The Defense Commissary Agency (DECA) will likely monitor performance closely through delivery tracking and quality checks. However, the lack of competitive pressure might reduce incentives for exceptional service or cost-saving innovations. The short duration suggests this might be a stop-gap measure, so its long-term effectiveness in meeting DECA's strategic supply needs is questionable. Ultimately, effectiveness will be measured by the consistent availability of goods to commissaries.

How does this contract fit into the broader historical spending patterns for federal grocery procurement?

This $14.3 million contract for dry grocery products represents a specific instance within the larger context of federal food procurement, which is a significant category of government spending. The Defense Commissary Agency (DECA) alone manages billions in annual sales and procurement. Historically, DECA has utilized a mix of contract types, including large distribution contracts, direct vendor agreements, and schedule purchases, often aiming for competitive awards. Sole-source awards, like this one, are less common for routine supply needs and typically require strong justification. This contract's short duration and specific value point suggest it might be addressing a particular gap or transition period rather than representing a standard, long-term procurement strategy. Analyzing historical spending would reveal trends in competition levels, pricing, and the types of vendors DECA engages with.

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

Parent Company: Stichting Administratiekantoor Unilever N.V. (UEI: 386201268)

Address: 800 SYLVAN AVE, ENGLEWOOD CLIF, NY, 07632

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,359,811

Exercised Options: $14,359,811

Current Obligation: $14,359,811

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G2949

IDV Type: IDC

Timeline