DoD's $20.5M grocery resale contract awarded to Conagra Foods for assorted packaged goods

Contract Overview

Contract Amount: $20,551,522 ($20.6M)

Contractor: Conagra Foods Packaged Foods C

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2009-03-31

Contract Duration: 89 days

Daily Burn Rate: $230.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - ASSORTED GROCERY

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68102

State: Nebraska Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. Value for money assessed against market rates for wholesale grocery distribution. 2. Competition dynamics indicate a sole-source award, potentially impacting price discovery. 3. Risk indicators include potential for price escalation without competitive pressure. 4. Performance context is a short-term delivery order for essential goods. 5. Sector positioning within Defense Commissary Agency's supply chain operations.

Value Assessment

Rating: fair

The contract value of $20.5 million for a 3-month period suggests a significant volume of goods. Benchmarking against similar wholesale grocery contracts is challenging without specific product details. However, the fixed-price nature provides some cost certainty. The absence of competition raises concerns about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The data indicates 'NOT AVAILABLE FOR COMPETITION,' suggesting specific circumstances or justifications for bypassing the standard competitive process. Without multiple bidders, it's difficult to assess the true market price or the effectiveness of price negotiation.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to leverage market forces for cost savings.

Public Impact

Benefits military personnel and their families by providing access to essential grocery items through the Defense Commissary Agency. Services delivered include the supply of assorted packaged grocery goods. Geographic impact is likely focused on military installations served by the Defense Commissary Agency in Nebraska. Workforce implications are minimal for this specific delivery order, primarily affecting logistics and distribution personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated prices compared to a competitive environment.
Sole-source awards can set a precedent for future non-competitive procurements.
Limited transparency into the justification for sole-source award.

Positive Signals

Ensures availability of essential goods for military families.
Fixed-price contract provides cost predictability for the duration of the order.

Sector Analysis

The grocery wholesale industry is characterized by large distributors and manufacturers supplying a wide range of products. This contract falls within the food and beverage sector, specifically wholesale distribution. The Defense Commissary Agency operates as a significant retail entity within the federal government, requiring substantial procurement of food items to serve its customer base. Comparable spending benchmarks would involve analyzing other large-scale food procurement contracts within government or the private sector.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award to Conagra Foods, a large established company, suggests that small businesses were likely not primary participants in this specific procurement. Further analysis would be needed to determine if any subcontracting occurred.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting and financial management divisions. Accountability measures are inherent in the fixed-price contract terms. Transparency is limited due to the sole-source nature of the award, with the justification for non-competition being a key area for review.

Related Government Programs

Defense Commissary Agency Operations
Military Resale Operations
Federal Food Procurement

Risk Flags

Sole-source award lacks competitive justification.
Potential for above-market pricing due to lack of competition.
Limited transparency regarding procurement rationale.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to CONAGRA FOODS PACKAGED FOODS C. RESALE - ASSORTED GROCERY

Who is the contractor on this award?

The obligated recipient is CONAGRA FOODS PACKAGED FOODS C.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.6 million.

What is the period of performance?

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

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION.' Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the supplies or services, or in cases of urgent and compelling need where competition is not feasible. Without further documentation from the agency, the precise reason for this sole-source award remains unclear. This lack of competition raises questions about whether the government explored all avenues to ensure a competitive process or if there were indeed unique circumstances necessitating a non-competitive award.

How does the unit price of goods under this contract compare to market rates for similar wholesale grocery items?

Direct comparison of unit prices is not possible with the provided data, as it lacks specific item details and quantities. The total award amount of $20.5 million covers assorted grocery items over a 3-month period. To assess value for money, a detailed breakdown of the products procured and their corresponding prices would be necessary. Benchmarking against industry wholesale price lists or similar government contracts for comparable goods would be the next step in evaluating cost-effectiveness. The absence of competition makes this assessment more challenging.

What is Conagra Foods' track record with federal contracts, particularly with the Defense Commissary Agency?

Conagra Foods is a large food manufacturing and distribution company with a history of supplying goods to various government entities. While specific details of their past performance with the Defense Commissary Agency (DCA) are not in the provided data, their established presence suggests they are a significant supplier. A comprehensive review would involve examining past contract awards, performance evaluations, and any history of disputes or issues with the DCA or other federal agencies. Their ability to secure this sole-source award implies a pre-existing relationship or capability deemed essential by the agency.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of $20.5 million is the potential for paying a premium price due to the lack of competitive bidding. Without competing offers, the government loses the opportunity to leverage market forces to secure the best possible value. Other risks include reduced transparency in the procurement process, potential for contractor complacency, and the possibility that the chosen contractor may not be the most innovative or efficient provider available. Furthermore, it can set a precedent that discourages future competition if not adequately justified.

How does this contract fit into the broader spending patterns of the Defense Commissary Agency for grocery procurement?

This $20.5 million contract represents a significant, albeit short-term (3-month), investment in grocery procurement for the Defense Commissary Agency (DCA). The DCA's overall mission is to provide high-quality groceries to military personnel and their families at cost-plus prices, often requiring substantial annual budgets for food acquisition. This specific award, being a delivery order, likely represents a portion of the agency's ongoing need for assorted packaged goods. Understanding its place in broader spending requires analyzing the DCA's total annual procurement budget, the frequency and value of other similar contracts, and the strategic sourcing decisions made by the agency.

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: 1 CONAGRA DR, OMAHA, NE, 68102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,551,522

Exercised Options: $20,551,522

Current Obligation: $20,551,522

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3356

IDV Type: IDC

Timeline