DoD spent $14M on pet food, with Nestle Purina securing the sole-source contract

Contract Overview

Contract Amount: $14,042,399 ($14.0M)

Contractor: Nestle Purina Petcare CO

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2009-03-31

Contract Duration: 89 days

Daily Burn Rate: $157.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - PET FOOD

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63164

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to NESTLE PURINA PETCARE CO for work described as: RESALE - PET FOOD Key points: 1. The contract value of $14 million for pet food suggests a significant demand for animal provisions within the Department of Defense. 2. The sole-source nature of this award warrants scrutiny regarding the justification for limited competition and potential cost implications. 3. Performance duration of 89 days indicates a short-term need, possibly for specific events or deployments. 4. The absence of a specific Product Service Code (PSC) might indicate a less standardized procurement category. 5. The contract was awarded as a Delivery Order, implying it's part of a larger, potentially indefinite-delivery contract.

Value Assessment

Rating: questionable

Benchmarking the value of $14 million for pet food is challenging without more specific product details and quantities. However, given the sole-source nature, it's difficult to assess if this represents a competitive price. The fixed-price contract type offers some cost certainty, but the lack of competition raises concerns about potential overpayment compared to what might be achieved in an open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Nestle Purina Petcare Co., was solicited. The justification for this limited competition is not provided in the data. Sole-source awards can sometimes be necessary for unique capabilities or urgent needs, but they typically limit price discovery and can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without exploring other suppliers, it's impossible to determine if a more cost-effective solution was available.

Public Impact

Military personnel and their families stationed at DoD facilities likely benefit from the availability of pet food. The services delivered include the provision of pet food, supporting the well-being of animals associated with military operations or personnel. The geographic impact is likely concentrated around DoD installations where the pet food was distributed. Workforce implications are minimal, primarily related to the logistics and distribution of the pet food.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of detailed product service code makes it difficult to benchmark against similar procurements.
Short contract duration (89 days) may indicate a reactive procurement rather than strategic planning.

Positive Signals

Fixed-price contract type provides cost certainty for the awarded amount.
Award to a known entity (Nestle Purina) suggests a potentially reliable supplier for pet food.

Sector Analysis

The procurement of pet food falls under the broader category of wholesale trade for grocery merchants. While not a high-technology or defense-specific sector, it represents a recurring need for organizations with a significant population of personnel and associated animals. Comparable spending benchmarks would typically be found within the food services or general wholesale distribution categories, but specific pet food spending by the DoD is not a widely tracked sector metric.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'sb': false. Nestle Purina Petcare Co. is a large corporation. There is no information provided regarding subcontracting opportunities for small businesses within this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA) and the Department of Defense's internal audit and inspection mechanisms. The 'Delivery Order' nature suggests it might be part of a larger contract vehicle, which would have its own oversight framework. Transparency is limited by the sole-source nature and the lack of detailed justification for the award.

Related Government Programs

Defense Commissary Agency Operations
Military Family Support Services
Wholesale Food Distribution Contracts

Risk Flags

Sole-source award without clear justification
Lack of competitive bidding may lead to higher costs
Limited transparency on product specifics and quantities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to NESTLE PURINA PETCARE CO. RESALE - PET FOOD

Who is the contractor on this award?

The obligated recipient is NESTLE PURINA PETCARE CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.0 million.

What is the period of performance?

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

What specific types and quantities of pet food were procured under this contract?

The provided data does not specify the exact types or quantities of pet food purchased. It only indicates the total contract value of $14,042,399.24. Without this detail, it is impossible to perform a granular analysis of unit pricing or to compare the value proposition effectively against market rates for specific pet food products. This information is crucial for understanding the scope of the procurement and assessing its overall value for money.

What was the justification for awarding this contract on a sole-source basis to Nestle Purina Petcare Co.?

The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. However, the specific justification for this determination is not provided. Typical reasons for sole-source awards include unique capabilities, urgent and compelling needs, or situations where only one responsible source can fulfill the requirement. Without the official justification document, it's impossible to verify the necessity of limiting competition and to assess if alternative solutions were adequately explored, which is a key factor in ensuring fair pricing for taxpayers.

How does the $14 million contract value compare to historical spending on pet food by the Department of Defense or similar agencies?

The provided data does not contain historical spending information for pet food by the DoD or the Defense Commissary Agency (DECA). Therefore, a direct comparison to historical patterns cannot be made. The $14 million figure represents a significant expenditure, but its context relative to past procurements or the spending of comparable organizations (e.g., other large federal agencies with commissaries or animal support services) is missing. This lack of historical data hinders an assessment of whether spending has increased, decreased, or remained stable over time.

What is the typical profit margin for pet food suppliers like Nestle Purina, and how might that influence the pricing in this sole-source contract?

While the average profit margins for pet food manufacturers can vary, they are generally in the range of 10-20% for established brands. However, specific profit margins for Nestle Purina Petcare Co. on this particular contract are not publicly available. In a sole-source scenario, the absence of competition means the government cannot leverage competing bids to drive down prices. Consequently, the pricing could potentially reflect higher margins than might be achievable in a competitive bidding process, making it harder to ascertain if the government received the best possible value.

What are the potential risks associated with a sole-source award for essential supplies like pet food?

The primary risk of a sole-source award for essential supplies like pet food is the potential for inflated pricing due to the lack of competition. This can lead to inefficient use of taxpayer funds. Additionally, it can create a dependency on a single supplier, which could pose risks if that supplier experiences disruptions in production or delivery. Without competitive pressure, there may also be less incentive for the supplier to innovate or offer superior product options. Ensuring the necessity and appropriateness of the sole-source justification is critical to mitigate these risks.

Industry Classification

NAICS: Wholesale Trade › Grocery and Related Product Merchant Wholesalers › General Line Grocery Merchant Wholesalers

Product/Service Code: MISCELLANEOUS

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: CHECKERBOARD SQUARE, SAINT LOUIS, MO, 63164

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,042,399

Exercised Options: $14,042,399

Current Obligation: $14,042,399

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3169

IDV Type: IDC

Timeline