DoD's $15.5M contract for health and beauty aids awarded to Johnson & Johnson Consumer Co. via non-competitive means

Contract Overview

Contract Amount: $15,530,462 ($15.5M)

Contractor: Johnson & Johnson Consumer COM

Awarding Agency: Department of Defense

Start Date: 2009-04-01

End Date: 2009-06-30

Contract Duration: 90 days

Daily Burn Rate: $172.6K/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: SKILLMAN, SOMERSET County, NEW JERSEY, 08558

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $15.5 million to JOHNSON & JOHNSON CONSUMER COM for work described as: RESALE - HEALTH & BEAUTY AIDES Key points: 1. The contract value of $15.5 million for health and beauty aids represents a significant expenditure for the Defense Commissary Agency. 2. Awarded to a single, established supplier, the contract raises questions about the extent of market competition and potential for cost savings. 3. The fixed-price contract type offers some cost certainty but may limit flexibility if market conditions change significantly. 4. The short duration of 90 days suggests this may be a bridge contract or for immediate needs, rather than a long-term strategic sourcing effort. 5. The lack of a small business set-aside indicates that opportunities for smaller enterprises in this procurement were not prioritized. 6. The procurement falls under wholesale grocery merchant services, a category with established market players and pricing structures.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific product details or comparable contract data for health and beauty aids. However, a $15.5 million award for a 90-day period suggests a substantial volume of goods. The fixed-price nature provides some predictability, but the lack of competition means there's no direct market pressure to ensure the lowest possible price. Without competitive bids, it's difficult to ascertain if the pricing reflects optimal value for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one supplier can meet the government's needs, often due to proprietary products, urgent requirements, or lack of market availability. The absence of multiple bidders means there was no opportunity for price discovery through a competitive process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Sole-source awards limit taxpayer savings by foregoing the price reductions typically achieved through competitive bidding. This can result in the government paying more than necessary for goods and services.

Public Impact

Military personnel and their families stationed at bases served by the Defense Commissary Agency benefit from the availability of health and beauty products. The contract ensures a supply chain for essential personal care items within military commissaries. The geographic impact is likely widespread, covering commissaries where Johnson & Johnson Consumer Co. products are distributed. The contract supports the operations of Johnson & Johnson Consumer Co. and its distribution network, potentially impacting jobs within that sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award limits opportunities for other suppliers.
Short contract duration might indicate a lack of strategic planning or a stop-gap measure.

Positive Signals

Award to an established supplier ensures product availability.
Fixed-price contract provides cost certainty for the government.
Contract supports the provision of essential goods to military families.

Sector Analysis

The procurement of health and beauty aids falls within the broader retail and wholesale trade sector, specifically serving the military resale market. The Defense Commissary Agency (DeCA) operates a network of commissaries worldwide, providing groceries and household goods to military members and their families at discounted prices. This contract with Johnson & Johnson Consumer Co. is for general line grocery merchant wholesaling, indicating a focus on the distribution of consumer packaged goods. Comparable spending benchmarks for such items within the federal government are difficult to isolate, but DeCA's overall annual sales are in the billions, highlighting the scale of its operations.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them. The award to a large, established consumer goods company suggests that the primary focus was on securing a broad range of products from a known supplier rather than fostering small business participation. This approach may limit the direct economic benefits to the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily reside with the Defense Commissary Agency (DeCA), which is responsible for managing its procurement activities. Accountability measures would include contract performance monitoring, delivery verification, and financial audits. Transparency is facilitated through public contract databases, though the rationale for sole-source awards can sometimes be less detailed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Commissary Agency Operations
Military Resale Programs
Consumer Goods Procurement
Wholesale Distribution Services

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.5 million to JOHNSON & JOHNSON CONSUMER COM. RESALE - HEALTH & BEAUTY AIDES

Who is the contractor on this award?

The obligated recipient is JOHNSON & JOHNSON CONSUMER COM.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.5 million.

What is the period of performance?

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

What is the historical spending pattern for health and beauty aids by the Defense Commissary Agency?

Analyzing historical spending patterns for health and beauty aids by the Defense Commissary Agency (DeCA) is crucial for understanding the context of this $15.5 million award. While specific historical data for this exact category is not provided, DeCA's overall budget and spending on consumer goods are substantial, often exceeding billions of dollars annually. DeCA aims to provide goods at a 25% discount compared to civilian retailers. Without prior contract details for this specific product set, it's difficult to determine if this $15.5 million represents an increase, decrease, or stable spending level. However, the agency's mission implies consistent demand for such items. Further investigation into DeCA's annual reports and procurement histories would be necessary to establish a clear trend and assess if this award aligns with past expenditures or represents a deviation.

How does the pricing of this contract compare to similar commercial contracts for health and beauty aids?

Direct comparison of this contract's pricing to similar commercial contracts is challenging due to the sole-source nature of the award and the lack of specific product details. Commercial contracts often involve competitive bidding among multiple distributors and retailers, driving prices down. Johnson & Johnson Consumer Co. is a major manufacturer, and this contract likely involves wholesale distribution. The Defense Commissary Agency (DeCA) aims for a 25% discount compared to civilian retail prices. However, without knowing the exact products, quantities, and the specific wholesale margins negotiated, it's impossible to definitively state if the pricing is competitive with the commercial market. The absence of competition in this federal contract means there's no direct benchmark to assess price efficiency against market alternatives.

What are the potential risks associated with awarding a contract of this size on a sole-source basis?

Awarding a contract of $15.5 million on a sole-source basis carries several potential risks. The primary risk is financial: without competition, the government may pay a premium for the goods or services, as there is no market pressure to achieve the lowest possible price. This can lead to inefficient use of taxpayer funds. Another risk is a lack of innovation or responsiveness from the sole provider, as they face no competitive threat. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain; if the contractor experiences production issues, delivery delays, or financial instability, it could disrupt the availability of essential health and beauty aids to military commissaries. Finally, sole-source awards can create perceptions of unfairness or a lack of transparency, potentially undermining public trust.

What is the track record of Johnson & Johnson Consumer Co. in fulfilling government contracts, particularly with the Defense Commissary Agency?

Johnson & Johnson Consumer Co. is a well-established entity in the consumer goods market, and its track record in fulfilling government contracts, especially with the Defense Commissary Agency (DeCA), is likely extensive, though specific contract performance data for this exact award is not detailed here. As a major supplier of health and beauty aids, it's probable they have supplied DeCA through various mechanisms over the years, potentially including competitive bids and direct sales. Their long-standing presence suggests a capacity to meet large-scale demands and maintain product availability. However, the nature of this specific $15.5 million award being sole-source warrants scrutiny. While their general market reputation is strong, the performance specifics on past government contracts, including delivery timeliness, product quality, and adherence to terms, would be key indicators of their reliability for this particular procurement.

Given the short duration (90 days), what might be the strategic purpose behind this contract?

The short 90-day duration of this $15.5 million contract for health and beauty aids suggests several possible strategic purposes. It could be a bridge contract, intended to ensure continuity of supply while a larger, more comprehensive procurement process is underway. This is common when existing contracts expire or when requirements are identified unexpectedly. Alternatively, it might be for a specific, time-limited event or deployment that requires a surge in these products. It could also represent an urgent need that could not wait for a lengthy competitive solicitation. Without further context, it's difficult to pinpoint the exact reason, but the brevity implies it's not a long-term strategic sourcing solution and may be part of a larger, phased acquisition strategy or a response to immediate operational demands.

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: US ROUTE 1 AND AARON ROAD, NORTH BRUNSWIC, NJ, 08902

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,530,462

Exercised Options: $15,530,462

Current Obligation: $15,530,462

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3260

IDV Type: IDC

Timeline