DoD awards $14.17M for soup, with Campbell Soup Company as sole source

Contract Overview

Contract Amount: $14,171,239 ($14.2M)

Contractor: Campbell Soup Company

Awarding Agency: Department of Defense

Start Date: 2009-07-01

End Date: 2009-09-30

Contract Duration: 91 days

Daily Burn Rate: $155.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - SOUPS (SECTION A)

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08103

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to CAMPBELL SOUP COMPANY for work described as: RESALE - SOUPS (SECTION A) Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration was short, 91 days, suggesting an immediate need. 3. The award was a delivery order under an unspecified contract. 4. The North American Industry Classification System (NAICS) code is 424410, indicating wholesale distribution of groceries. 5. The contract was for firm fixed price, providing cost certainty for the government. 6. The geographic location of the contractor is New Jersey.

Value Assessment

Rating: questionable

Without a competitive process, it is difficult to benchmark the value for money. The firm fixed price structure offers cost certainty, but the lack of competition means the government may not have secured the best possible price. Further analysis would require comparing this price to similar sole-source awards for similar quantities of soup, if available, or to market prices for bulk soup purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Campbell Soup Company, was solicited. This approach bypasses the competitive bidding process typically used to ensure fair pricing and identify the best value. The limited competition significantly reduces the government's ability to leverage market forces for cost savings.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the potential for competitive pricing is eliminated. This contract's value of over $14 million suggests a substantial amount that could have been subject to savings through open competition.

Public Impact

Military personnel and their families stationed in or near New Jersey will benefit from the availability of these food products. The services delivered include the wholesale distribution of grocery items, specifically soups. The geographic impact is primarily focused on New Jersey, where the contractor is located and likely distribution originates. Workforce implications are minimal for this specific contract, as it focuses on product supply rather than direct service provision requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Lack of transparency in the justification for sole-source procurement.
Short contract duration may indicate reactive procurement rather than strategic planning.

Positive Signals

Firm fixed price contract provides cost certainty.
Award to a well-known brand like Campbell's may ensure product quality and availability.
Contract supports the Defense Commissary Agency, ensuring essential supplies for military families.

Sector Analysis

The food wholesale and distribution sector is a critical component of the supply chain for various organizations, including the military. This contract falls within the broader food and beverage industry, specifically focusing on the distribution of canned goods. Comparable spending benchmarks for similar sole-source food supply contracts within the Department of Defense would be necessary for a more precise assessment of market positioning.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large corporation like Campbell Soup Company, there are no direct subcontracting implications for small businesses stemming from this specific award. The focus is on a direct supply agreement with the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency (DECA) and the Department of Defense. Accountability measures would be tied to the delivery of specified products within the agreed-upon timeframe and price. Transparency is limited due to the sole-source nature of the award, with justifications for such awards usually being internal.

Related Government Programs

Defense Commissary Agency Operations
Department of Defense Food Procurement
Wholesale Grocery Distribution Contracts

Risk Flags

Sole-source award
Lack of competitive justification
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to CAMPBELL SOUP COMPANY. RESALE - SOUPS (SECTION A)

Who is the contractor on this award?

The obligated recipient is CAMPBELL SOUP COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.2 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 to Campbell Soup Company?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as urgent and compelling needs, unique capabilities of a single contractor, or when only one source is reasonably available. Without this documentation, it's impossible to fully assess the necessity of bypassing the competitive bidding process. Further investigation into the contract file or agency procurement records would be required to uncover the rationale behind this decision. This lack of transparency is a common concern with sole-source awards.

How does the $14.17 million contract value compare to typical annual spending on soups by the Defense Commissary Agency?

The provided data does not offer historical spending patterns for the Defense Commissary Agency (DECA) specifically on soups, nor does it provide context for the typical volume or frequency of such awards. The $14.17 million figure represents a single delivery order with a short duration (91 days). To compare this value, one would need to analyze DECA's procurement history for similar food items, looking at both sole-source and competitively awarded contracts over multiple fiscal years. Understanding the total annual demand for soups and the proportion this single award represents would be crucial for assessing its significance in the context of DECA's overall food budget.

What are the potential risks associated with awarding a large food supply contract on a sole-source basis?

The primary risk associated with sole-source awards is the potential for inflated pricing due to the absence of competition. Taxpayers may end up paying more than necessary compared to a scenario where multiple vendors vie for the contract. Another risk is reduced innovation, as the incumbent contractor may have less incentive to improve products or services. Furthermore, sole-source awards can create a perception of favoritism or lack of fairness in the procurement process. Dependence on a single supplier can also pose a risk if that supplier faces disruptions in production or delivery, potentially impacting the supply chain for essential goods like food for military personnel and their families.

What is the significance of the NAICS code 424410 in understanding this contract?

The North American Industry Classification System (NAICS) code 424410 signifies 'General Line Grocery Merchant Wholesalers.' This code indicates that the contractor, Campbell Soup Company in this instance, is engaged in the business of wholesaling a wide variety of grocery products, not exclusively soups. For this contract, it means the government is procuring soups through a wholesale distribution channel. This classification helps in understanding the type of business entity involved and the broader market segment it operates within. It suggests that Campbell Soup Company is acting as a distributor, potentially sourcing soups from various internal or external production facilities, and supplying them to the Defense Commissary Agency.

Given the short duration (91 days), what might this delivery order have been intended for?

A short contract duration of 91 days (approximately three months) for a substantial amount like $14.17 million suggests this delivery order was likely intended to fulfill an immediate or short-term need for soups. This could be for a specific event, a temporary surge in demand, or to bridge a gap until a longer-term, potentially competitively awarded contract could be established. It might also represent a replenishment of stock for commissaries during a particular season or period. Without further context on the agency's inventory management or specific operational requirements at the time, it's difficult to pinpoint the exact reason, but the brevity points towards a time-sensitive requirement.

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 CAMPBELL PLACE SW4, CAMDEN, NJ, 08103

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,171,239

Exercised Options: $14,171,239

Current Obligation: $14,171,239

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3271

IDV Type: IDC

Timeline