DoD's $14.2M Pet Food Contract with Nestle Purina Raises Questions on Competition and Value

Contract Overview

Contract Amount: $14,265,202 ($14.3M)

Contractor: Nestle Purina Petcare CO

Awarding Agency: Department of Defense

Start Date: 2009-04-01

End Date: 2009-06-30

Contract Duration: 90 days

Daily Burn Rate: $158.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM 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 $14.3 million to NESTLE PURINA PETCARE CO for work described as: RESALE - PET FOOD Key points: 1. Significant spending on pet food by the Defense Commissary Agency highlights a niche but essential service. 2. Sole-source award to Nestle Purina suggests potential lack of competitive bidding, impacting price discovery. 3. The contract's duration and fixed-price nature warrant scrutiny for potential cost overruns or savings. 4. Analysis of the 'General Line Grocery Merchant Wholesalers' sector is needed to benchmark this spending.

Value Assessment

Rating: questionable

The contract value of $14.2M over 90 days is substantial for pet food. Without comparable contract data or a competitive bidding process, it's difficult to assess if this price is reasonable or if taxpayers received optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may lead to higher costs for the government compared to an open competition.

Taxpayer Impact: The sole-source nature of this contract raises concerns about taxpayer impact, as the absence of competition could result in inflated prices for pet food.

Public Impact

Military families relying on commissary services benefit from the availability of pet food. The contract ensures a supply chain for essential pet care items for service members. Potential for higher costs due to lack of competition could divert funds from other defense needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Limited price discovery
Potential for overpricing

Positive Signals

Ensures availability of essential pet food for military families
Fixed-price contract provides cost certainty (if priced competitively)

Sector Analysis

The Defense Commissary Agency's spending on pet food falls under wholesale grocery distribution. Benchmarking this against similar government contracts for food supplies or private sector wholesale agreements is crucial for assessing value.

Small Business Impact

The data does not indicate any involvement of small businesses in this contract, suggesting a focus on large, established suppliers within the pet food industry.

Oversight & Accountability

Oversight is needed to ensure the sole-source justification was valid and that the pricing reflects fair market value, despite the lack of competition.

Related Government Programs

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

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competitive bidding.
Absence of detailed product specifications makes value assessment difficult.
Short contract duration (90 days) may not reflect long-term needs or pricing strategies.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 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 $14.3 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, and were alternative competitive options explored?

The justification for a sole-source award is critical. Typically, it requires demonstrating that only one responsible source can provide the supplies or services. Without this information, it's impossible to determine if the government adequately explored competitive avenues or if this was a missed opportunity to secure better pricing through open bidding.

How does the per-unit cost of this pet food compare to market rates or other government contracts for similar items?

Without specific item details and unit costs, a direct comparison is challenging. However, given the sole-source nature, there's a risk that the pricing is not optimized. Benchmarking against commercial prices for the same or equivalent products, or against other government food contracts, would reveal potential overspending.

What mechanisms are in place to ensure the quality and suitability of the pet food supplied under this contract?

While the contract specifies 'Pet Food,' the quality and suitability depend on adherence to product specifications and safety standards. The fixed-price nature implies the contractor bears the risk of cost overruns, but oversight should still confirm that the delivered products meet all required nutritional and safety standards for military families' pets.

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: CHECKERBOARD SQUARE, SAINT LOUIS, MO, 63164

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,265,202

Exercised Options: $14,265,202

Current Obligation: $14,265,202

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3169

IDV Type: IDC

Timeline