DoD's $14.7M Health & Beauty Contract with Johnson & Johnson Raises Questions on Competition and Value
Contract Overview
Contract Amount: $14,719,650 ($14.7M)
Contractor: Johnson & Johnson Consumer COM
Awarding Agency: Department of Defense
Start Date: 2009-07-01
End Date: 2009-09-30
Contract Duration: 91 days
Daily Burn Rate: $161.8K/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
Plain-Language Summary
Department of Defense obligated $14.7 million to JOHNSON & JOHNSON CONSUMER COM 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 a major consumer goods manufacturer, Johnson & Johnson. 3. Potential for higher costs due to lack of competitive bidding. 4. Limited transparency on pricing benchmarks for these specific consumer goods.
Value Assessment
Rating: questionable
The contract value of $14.7 million for health and beauty aids is substantial. Without competitive pricing data, it's difficult to assess if this represents fair market value compared to similar bulk purchases or retail pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no competition was sought. This significantly limits price discovery and may lead to inflated costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award likely results in higher prices than could be achieved through a competitive process, impacting taxpayer funds.
Public Impact
Commissary customers receive access to health and beauty products. Potential for higher prices on essential personal care items for military families. Taxpayer funds are used to procure these goods, with limited assurance of best value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Lack of clear justification for sole-source.
- Potential for overpayment due to lack of price benchmarks.
- Short contract duration may indicate a stop-gap measure.
Positive Signals
- Provides essential health and beauty products to military personnel and families.
- Established relationship with a known consumer goods provider.
Sector Analysis
This contract falls under the wholesale trade of consumer goods, specifically health and beauty aids. Spending benchmarks for similar commissary contracts are not readily available, but competition is typically expected for such goods.
Small Business Impact
The data indicates this contract was not awarded to small businesses. There is no indication of efforts to include small businesses in the supply chain for these health and beauty products.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the Defense Commissary Agency obtained the best possible value for taxpayer dollars. Accountability for the justification of the sole-source award is crucial.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for inflated pricing due to lack of competition.
- No clear benchmark for fair market value.
- Limited transparency on procurement process.
- Short contract duration raises questions about long-term strategy.
Tags
general-line-grocery-merchant-wholesaler, department-of-defense, nj, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.7 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 $14.7 million.
What is the period of performance?
Start: 2009-07-01. End: 2009-09-30.
What was the specific justification for awarding this contract on a sole-source basis rather than seeking competitive bids for health and beauty aids?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' which is a common designation for sole-source awards. However, the specific rationale, such as unique product requirements, proprietary technology, or urgent need without time for competition, is not detailed. A thorough review would require access to the contract's justification documentation.
How does the unit cost of these health and beauty aids compare to commercially available prices, considering the bulk purchasing power of the Defense Commissary Agency?
Without specific product details and unit cost data, a direct comparison is impossible. While the Defense Commissary Agency benefits from bulk purchasing, the absence of competition in this sole-source award suggests that the negotiated prices might be higher than what could be achieved through competitive bidding, potentially exceeding commercial benchmarks.
What is the long-term strategy for procuring health and beauty aids, and will future procurements involve competitive bidding to ensure better value?
The short duration of this delivery order (91 days) suggests it might be a temporary or interim solution. The long-term strategy is unclear from the data. Future procurements should ideally incorporate competitive bidding processes to leverage market forces and secure more favorable pricing for these consumer goods.
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: $14,719,650
Exercised Options: $14,719,650
Current Obligation: $14,719,650
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0105G3260
IDV Type: IDC
Timeline
Start Date: 2009-07-01
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2019-06-07
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