DoD's $20M Grocery Resale Contract with Conagra Foods Lacks Competition, Raises Value Concerns

Contract Overview

Contract Amount: $20,180,418 ($20.2M)

Contractor: Conagra Foods Packaged Foods C

Awarding Agency: Department of Defense

Start Date: 2009-04-01

End Date: 2009-06-30

Contract Duration: 90 days

Daily Burn Rate: $224.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM 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 $20.2 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. Significant spending on assorted groceries highlights reliance on established suppliers. 2. Lack of competition for this contract raises questions about price discovery and potential overspending. 3. The contract's duration and fixed-price nature may limit flexibility in responding to market fluctuations. 4. Analysis of grocery wholesale sector benchmarks is needed to assess value for money.

Value Assessment

Rating: questionable

The contract value of $20,180,418.34 for assorted groceries appears high given the lack of competitive bidding. Without market comparisons or multiple bids, it's difficult to ascertain if this price reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a sole-source or limited source award. This significantly restricts price discovery and may lead to suboptimal pricing for the government.

Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive pressure, potentially diverting funds from other critical government needs.

Public Impact

Commissary shoppers may experience price fluctuations or limited product availability if contracts are not cost-effective. Defense spending on essential goods like groceries directly impacts military family budgets and morale. The lack of transparency in pricing for commissary goods can erode public trust in government procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Limited contract duration
No small business participation noted

Positive Signals

Provides essential goods to military personnel and families
Firm fixed price provides cost certainty

Sector Analysis

The Defense Commissary Agency procures a wide range of food products to support military communities. Spending benchmarks in the general line grocery merchant wholesale sector are typically driven by volume, supplier relationships, and competitive market forces.

Small Business Impact

There is no indication of small business participation in this contract. Opportunities for small businesses in the grocery wholesale sector may be limited by the scale and nature of this specific award.

Oversight & Accountability

The lack of competition suggests potential weaknesses in oversight regarding procurement strategies. Robust oversight should ensure that all avenues for competitive sourcing are explored to maximize value.

Related Government Programs

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

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency in cost structure
No clear small business utilization
Contract awarded in 2009, may not reflect current market conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 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 $20.2 million.

What is the period of performance?

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

What is the justification for awarding this contract on a limited or sole-source basis, and what steps were taken to ensure fair pricing?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a limited or sole-source award. Without further details on the justification (e.g., urgency, unique supplier capabilities), it's impossible to assess the fairness of pricing. Standard procurement regulations require justification for non-competitive awards and often involve price analysis techniques to ensure reasonableness.

How does the per-unit cost of these groceries compare to similar items purchased through competitive contracts or available on the open market?

A direct comparison of per-unit costs is not possible with the data provided. The contract value is a total amount, not broken down by item. To assess value, a detailed price analysis comparing the specific items and quantities procured under this contract against benchmark data from competitive contracts or commercial pricing would be necessary.

What is the long-term impact of awarding such significant contracts without competition on the Defense Commissary Agency's overall budget and operational efficiency?

Consistently awarding contracts without competition can lead to inflated costs over the long term, reducing the overall efficiency of the Defense Commissary Agency's budget. This can necessitate higher appropriations or lead to reduced purchasing power, potentially impacting the variety or affordability of goods for military families. It also discourages market competition, which could otherwise drive innovation and cost savings.

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: FIRM 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: $20,180,418

Exercised Options: $20,180,418

Current Obligation: $20,180,418

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3356

IDV Type: IDC

Timeline