DoD's $17.7M Health & Beauty Aids Contract with Kimberly-Clark Raises Questions on Competition and Value

Contract Overview

Contract Amount: $17,765,508 ($17.8M)

Contractor: Kimberly-Clark Corporation

Awarding Agency: Department of Defense

Start Date: 2009-04-01

End Date: 2009-06-30

Contract Duration: 90 days

Daily Burn Rate: $197.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM 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 $17.8 million to KIMBERLY-CLARK CORPORATION for work described as: RESALE - HEALTH & BEAUTY AIDES Key points: 1. Significant spending on health and beauty aids by the Defense Commissary Agency. 2. Sole-source award to Kimberly-Clark Corporation limits competitive pricing. 3. Potential for higher costs due to lack of competition. 4. Focus on essential supplies for military personnel and families.

Value Assessment

Rating: questionable

The contract value of $17.7M for a 90-day period is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar bulk purchases of health and beauty aids.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to inflated costs for the government.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be overpaying for these essential health and beauty supplies.

Public Impact

Ensures availability of essential health and beauty products for military members and their families. Supports the morale and well-being of the armed forces community. The sole-source nature of the contract may impact the variety of products available if not carefully managed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Potential for overpayment due to lack of price discovery
Short contract duration may indicate recurring needs

Positive Signals

Provides essential goods to military personnel
Established supplier (Kimberly-Clark) likely ensures product quality

Sector Analysis

The Defense Commissary Agency procures a wide range of consumer goods, including health and beauty aids, to support military families. Spending benchmarks for this specific category are difficult to ascertain without competitive data.

Small Business Impact

The sole-source nature of this award suggests that small businesses were not considered or given an opportunity to compete for this contract, potentially limiting their access to government procurement opportunities.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent potential waste. The Defense Commissary Agency should have internal mechanisms to validate the necessity and cost-effectiveness of such awards.

Related Government Programs

General Line Grocery Merchant Wholesalers
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited transparency in price justification
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 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 $17.8 million.

What is the period of performance?

Start: 2009-04-01. End: 2009-06-30.

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

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of adequate competition. Without further details, it's impossible to determine the specific reason. However, sole-source awards warrant close scrutiny to ensure they are truly necessary and not simply a convenience that bypasses competitive processes.

How does the government ensure fair pricing in sole-source contracts?

In sole-source contracts, agencies often rely on cost analysis, price reasonableness studies, and historical pricing data to ensure fair pricing. They may also negotiate directly with the vendor. However, the absence of competing bids inherently reduces the leverage for achieving the lowest possible price, making robust internal validation processes critical.

What is the long-term impact of sole-source awards on market competition?

Repeated sole-source awards can stifle market competition by discouraging other vendors from investing in capabilities or bidding on future contracts, assuming they will be overlooked. This can lead to reduced innovation, higher prices, and a less dynamic marketplace for government procurement over time.

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: FIRM 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: $17,765,508

Exercised Options: $17,765,508

Current Obligation: $17,765,508

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G2942

IDV Type: IDC

Timeline