Department of Defense awards $14M contract for soybean processing to The J. M. Smucker Company

Contract Overview

Contract Amount: $14,084,173 ($14.1M)

Contractor: THE J. M. Smucker Company

Awarding Agency: Department of Defense

Start Date: 2009-01-01

End Date: 2009-03-31

Contract Duration: 89 days

Daily Burn Rate: $158.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - JAM/JELLY/SYRUP

Place of Performance

Location: ORRVILLE, WAYNE County, OHIO, 44667

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to THE J. M. SMUCKER COMPANY for work described as: RESALE - JAM/JELLY/SYRUP Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies. 2. The J. M. Smucker Company, a large established firm, secured this sole-source award. 3. Limited competition suggests potential for higher pricing than in a fully competed scenario. 4. The contract duration of 89 days is relatively short, indicating a specific, immediate need. 5. Soybean processing is a niche requirement within the broader food and beverage sector. 6. The contract value of $14M warrants scrutiny for value for money given the lack of competition.

Value Assessment

Rating: questionable

Given the sole-source nature of this award, a direct comparison to similar contracts is challenging. However, the fixed-price contract type suggests that the government aimed to cap costs. Without competitive bids, it is difficult to benchmark the pricing against market rates or assess if the government secured the best possible value. The specific nature of soybean processing for resale might involve unique cost structures, but the lack of transparency inherent in sole-source awards makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from multiple bidders. The data indicates 'NOT AVAILABLE FOR COMPETITION,' suggesting a specific justification was likely made for not soliciting other offers. This approach bypasses the price discovery mechanisms typically found in competitive procurements, potentially leading to less favorable pricing for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher costs for taxpayers compared to what might be achieved in an open market scenario.

Public Impact

The primary beneficiaries are likely military personnel and their families who utilize commissary services, as the product is for resale. The contract delivers processed soybeans, which could be an ingredient in various food products sold in commissaries. The geographic impact is primarily within the operational scope of the Defense Commissary Agency, likely serving military bases. Workforce implications are minimal for the government, but the contractor, The J. M. Smucker Company, will utilize its existing workforce for production and delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process makes it difficult to assess true value for money.
Short contract duration might indicate a reactive procurement rather than strategic planning.

Positive Signals

The J. M. Smucker Company is a well-established entity with a known track record in food production.
Fixed-price contract type provides cost certainty for the government once awarded.
The contract addresses a specific need for resale items within the defense commissary system.

Sector Analysis

The food processing industry is vast, with soybean processing being a specific segment focused on extracting oils, proteins, and other components from soybeans. This contract falls under the broader category of food manufacturing and supply chain services for the government. Comparable spending benchmarks for soybean processing are difficult to ascertain without more specific details on the end product and volume, but the overall food and beverage sector for the U.S. government represents significant annual expenditure.

Small Business Impact

This contract was awarded to The J. M. Smucker Company, a large business, and there is no indication of small business set-asides or subcontracting requirements. Therefore, this specific award does not appear to directly benefit the small business ecosystem. The focus is on a large, established supplier for a specific commodity.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA) and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the fixed-price contract, requiring delivery of specified goods. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the procurement process challenging.

Related Government Programs

Defense Commissary Agency Operations
Food and Beverage Procurement
Agricultural Commodity Processing
Resale Operations Support

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of detailed justification for sole-source procurement limits transparency.
Short contract duration may indicate a reactive or urgent need, potentially impacting planning.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to THE J. M. SMUCKER COMPANY. RESALE - JAM/JELLY/SYRUP

Who is the contractor on this award?

The obligated recipient is THE J. M. SMUCKER COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

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

What is the specific end-use product derived from the soybean processing for this contract?

The provided data indicates 'RESALE - JAM/JELLY/SYRUP' and 'Soybean Processing' as the nature of the contract. This suggests that the processed soybeans are likely intended as an ingredient or component in the manufacturing of food products such as jams, jellies, or syrups that are then sold through the Defense Commissary Agency's resale channels. The exact formulation or the specific products utilizing these processed soybeans are not detailed in the available information, but the context points towards consumer-ready food items.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states 'NOT AVAILABLE FOR COMPETITION' for the contract type, indicating a sole-source award. Government regulations permit sole-source procurements under specific circumstances, such as when only one responsible source is available, or in cases of urgent and compelling need where competition is not feasible. Without further documentation from the awarding agency (Defense Commissary Agency), the precise justification for this sole-source award remains unknown. However, such justifications typically require rigorous documentation and approval processes to ensure they are warranted.

How does the $14 million contract value compare to historical spending on similar soybean processing for resale by the DoD?

Historical spending data for similar soybean processing contracts specifically for resale by the Department of Defense is not readily available in the provided snippet. The contract value of $14,084,173.02 is for a specific delivery order with a duration of 89 days. To establish a comparative benchmark, one would need to analyze past contracts awarded by the Defense Commissary Agency or other relevant DoD entities for soybean processing or related food ingredients over comparable periods. The sole-source nature of this award also complicates direct value comparisons, as competitive bids often drive pricing.

What are the potential risks associated with a sole-source contract for soybean processing?

The primary risk associated with a sole-source contract is the potential for reduced value for money due to the lack of competition. Without competing offers, the government may pay a higher price than if multiple vendors had vied for the contract. There's also a risk of complacency from the awarded contractor, as there is no immediate competitive pressure to innovate or improve efficiency. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or missed opportunities for other capable suppliers.

What is the track record of The J. M. Smucker Company with government contracts, particularly with the Defense Commissary Agency?

The J. M. Smucker Company is a large, established food and beverage company with a long history of producing consumer goods. While this specific data point highlights a sole-source award from the Defense Commissary Agency (DECA) for soybean processing, it is highly probable that a company of this size has engaged in numerous other contracts with various government agencies over the years, potentially including DECA for other food products. A comprehensive review of federal procurement databases (like FPDS or SAM.gov) would be necessary to fully detail their track record, including contract values, types, and performance history across different agencies.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean Processing

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: ONE STRAWBERRY LANE, ORRVILLE, OH, 44667

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,084,173

Exercised Options: $14,084,173

Current Obligation: $14,084,173

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0107G3563

IDV Type: IDC

Timeline