DoD's $2M Grocery Resale Contract with Conagra Foods Lacked Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $19,920,302 ($19.9M)
Contractor: Conagra Foods Packaged Foods C
Awarding Agency: Department of Defense
Start Date: 2009-07-01
End Date: 2009-09-30
Contract Duration: 91 days
Daily Burn Rate: $218.9K/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 $19.9 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. The contract for assorted groceries was awarded without competition, potentially leading to higher prices. 2. Conagra Foods, a major player, secured the deal, but the lack of bidding limits price discovery. 3. The short duration (91 days) and firm fixed-price structure offer some cost control, but the absence of competition is a significant risk. 4. The sector is general line grocery merchant wholesalers, a common area for government procurement.
Value Assessment
Rating: questionable
The contract value of $2,001,64 is for a short 91-day period. Without competitive bids, it's difficult to assess if this price is optimal compared to market rates for similar bulk grocery wholesale purchases.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source selection. This approach bypasses competitive bidding processes, which are crucial for ensuring the government receives the best possible prices and value.
Taxpayer Impact: The lack of competition means taxpayers may have paid more than necessary for these grocery items, as there was no pressure on the vendor to offer the lowest possible price.
Public Impact
Military families and personnel may have experienced price fluctuations due to the non-competitive award. The Defense Commissary Agency's procurement practices are under scrutiny for potential inefficiencies. This case highlights the importance of competitive sourcing for everyday goods to ensure taxpayer funds are used effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Limited Oversight on Pricing
Positive Signals
- Firm Fixed Price Contract
- Short Contract Duration
Sector Analysis
This contract falls under the wholesale grocery merchant sector. Government spending in this area typically involves large volumes, making competitive bidding essential for cost savings. Benchmarks are difficult without specific product details, but competition usually drives prices down by 10-30%.
Small Business Impact
The contract was awarded to Conagra Foods, a large corporation, and there is no indication that small businesses were involved or considered in this procurement. This represents a missed opportunity for small business participation.
Oversight & Accountability
The award method ('NOT AVAILABLE FOR COMPETITION') suggests a potential lapse in oversight or a specific justification for sole-sourcing that needs further examination. Accountability for achieving best value is diminished without a competitive process.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competitive bidding process.
- Potential for inflated pricing due to sole-source award.
- Limited transparency regarding the justification for non-competition.
- Missed opportunity for small business participation.
- Questionable value for taxpayer funds.
Tags
general-line-grocery-merchant-wholesaler, department-of-defense, ne, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.9 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 $19.9 million.
What is the period of performance?
Start: 2009-07-01. End: 2009-09-30.
What was the specific justification for not making this grocery contract available for competition, and did it align with federal procurement regulations?
The provided data states 'NOT AVAILABLE FOR COMPETITION' without further elaboration. Federal regulations typically allow for limited competition only under specific, documented circumstances such as urgent and compelling needs or unique capabilities. A thorough review would be needed to ascertain the validity of this justification and ensure compliance.
How does the $2M contract value compare to industry benchmarks for similar wholesale grocery assortments over a 91-day period, considering the lack of competitive pricing?
Without competitive bids, a direct benchmark is challenging. However, industry standards suggest that competitive procurement typically yields savings of 10-30% compared to non-competitive awards. The $2M for 91 days, especially without competition, raises concerns about potential overpayment relative to what could have been achieved through bidding.
What mechanisms were in place to ensure accountability and value for taxpayer money given the absence of a competitive bidding process for this contract?
The primary accountability mechanism here is the firm fixed-price structure and the short duration, which limit cost overruns. However, the absence of competition fundamentally undermines the government's ability to ensure it received the best possible value. Oversight would need to focus on validating the necessity of the non-competitive award and scrutinizing the vendor's pricing.
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: $19,920,302
Exercised Options: $19,920,302
Current Obligation: $19,920,302
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0105G3356
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
More Contracts from Conagra Foods Packaged Foods C
- Resale - Assorted Grocery — $22.5M (Department of Defense)
- Resale - Assorted Grocery — $21.7M (Department of Defense)
- Resale - Assorted Grocery — $20.6M (Department of Defense)
- Resale - Assorted Grocery — $20.6M (Department of Defense)
- Resale - Assorted Grocery — $20.2M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)