DoD's $17.8M health and beauty aids purchase from Kimberly-Clark Corporation shows concentrated supplier reliance

Contract Overview

Contract Amount: $17,855,917 ($17.9M)

Contractor: Kimberly-Clark Corporation

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2008-12-31

Contract Duration: 91 days

Daily Burn Rate: $196.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - HEALTH & BEAUTY AIDES

Place of Performance

Location: NEENAH, WINNEBAGO County, WISCONSIN, 54956

State: Wisconsin Government Spending

Plain-Language Summary

Department of Defense obligated $17.9 million to KIMBERLY-CLARK CORPORATION for work described as: RESALE - HEALTH & BEAUTY AIDES Key points: 1. The contract awarded to Kimberly-Clark Corporation for health and beauty aids highlights a reliance on a single, established supplier. 2. Analysis of this contract's value proposition is limited due to the absence of competitive bidding, making direct price comparisons difficult. 3. The sole-source nature of this award presents a potential risk indicator for future procurement, suggesting limited market exploration. 4. This purchase falls within the broader category of wholesale trade for consumer goods, serving the needs of military personnel and their families. 5. The contract's duration and delivery order structure suggest a need for readily available supplies rather than long-term strategic sourcing. 6. The lack of small business involvement in this specific award warrants further investigation into broader subcontracting opportunities within this category.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging as it was awarded on a sole-source basis, preventing direct comparison with other bids. The fixed-price nature suggests cost certainty for the government, but without competition, it's difficult to ascertain if the pricing reflects optimal market value. The total award amount of $17.8 million for a 91-day period indicates a significant volume of goods, but the per-unit cost cannot be assessed without detailed product information.

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 vendor can provide the required goods or services, or in urgent situations. The lack of competition means there were no other bidders, and therefore, no direct price discovery through a bidding process. This limits the government's ability to leverage market forces to achieve the best possible pricing.

Taxpayer Impact: Taxpayers may not be receiving the best possible value when contracts are awarded without competition, as the potential for lower prices through bidding is forgone.

Public Impact

Military personnel and their families stationed in Wisconsin benefit from the availability of essential health and beauty products. The Defense Commissary Agency (DECA) is the primary beneficiary, ensuring stock availability for its retail operations. This contract supports the supply chain for consumer goods within the Department of Defense's retail network. The contract directly impacts the inventory and sales of health and beauty items at commissaries served by this delivery order.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for taxpayer dollars.
Short contract duration (91 days) may indicate reactive procurement rather than strategic planning.
Lack of transparency in the justification for sole-source award.
Absence of small business participation raises concerns about equitable distribution of federal contracting opportunities.

Positive Signals

Ensures availability of essential health and beauty products for military families.
Fixed-price contract provides cost certainty for the government.
Award to a known entity (Kimberly-Clark) may imply reliability in supply.

Sector Analysis

The procurement of health and beauty aids falls under the wholesale trade sector, specifically general line grocery merchant wholesalers. This sector is characterized by large volumes of consumer goods distributed through various retail channels. The Department of Defense, through agencies like DECA, represents a significant customer base for such goods, aiming to provide quality-of-life support to service members and their families. Comparable spending benchmarks in this category are difficult to isolate without more specific product details, but the overall market for health and beauty aids is substantial.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award was made directly to Kimberly-Clark Corporation, a large business. There is no information provided regarding subcontracting plans for small businesses. This suggests that opportunities for small businesses to participate in fulfilling this specific contract are likely limited, potentially missing a chance to foster small business growth within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Commissary Agency (DECA) and the Department of Defense's internal audit and inspection mechanisms. As a delivery order under a larger framework (though the parent contract details are not provided), oversight would focus on timely delivery, product quality, and adherence to the fixed-price terms. Transparency is limited due to the sole-source nature and the lack of publicly available justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Operations
Wholesale Trade Services
Consumer Goods Procurement
Military Family Support Programs

Risk Flags

Sole Source Award
Lack of Competition
Potential for Overpricing
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.9 million to KIMBERLY-CLARK CORPORATION. RESALE - HEALTH & BEAUTY AIDES

Who is the contractor on this award?

The obligated recipient is KIMBERLY-CLARK CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.9 million.

What is the period of performance?

Start: 2008-10-01. End: 2008-12-31.

What is the justification for awarding this contract on a sole-source basis to Kimberly-Clark Corporation?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this determination is not detailed in the provided data. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation, such as a Justification and Approval (J&A) document, it is impossible to ascertain the precise reasons why this procurement was not competed. This lack of competition limits the government's ability to ensure it is obtaining the best value through market forces.

How does the $17.8 million award for a 91-day period compare to typical spending for health and beauty aids by the Defense Commissary Agency?

Comparing this $17.8 million award for a 91-day period to typical spending is challenging without more granular data on the specific products included and the scope of the Defense Commissary Agency's (DECA) overall procurement strategy. However, $17.8 million over approximately three months suggests a substantial volume of goods, averaging roughly $195,600 per day. This indicates a significant demand for health and beauty aids within the commissary system, likely serving multiple locations or a large customer base. To provide a true benchmark, one would need to analyze DECA's historical spending patterns for similar product categories across comparable contract durations and understand the specific items procured under this award.

What are the potential risks associated with relying on a single supplier like Kimberly-Clark Corporation for essential health and beauty aids?

Relying on a single supplier like Kimberly-Clark Corporation for essential health and beauty aids presents several potential risks. Firstly, it eliminates price competition, potentially leading to higher costs for the government and taxpayers than if multiple suppliers were bidding. Secondly, it creates a dependency on one company's production capacity and supply chain; any disruption to Kimberly-Clark's operations (e.g., manufacturing issues, labor strikes, raw material shortages) could directly impact the availability of these essential items for military personnel and their families. Thirdly, it reduces the government's leverage in negotiations, as the supplier knows they are the sole source. This can also stifle innovation and limit the introduction of alternative or potentially superior products from other manufacturers.

What is the significance of the 'General Line Grocery Merchant Wholesalers' North American Industry Classification System (NAICS) code (424410) in the context of this contract?

The NAICS code 424410, 'General Line Grocery Merchant Wholesalers,' signifies that the primary business activity of the contractor, Kimberly-Clark Corporation in this instance, is the wholesale distribution of a broad range of grocery and related products. In the context of this contract, it indicates that the Defense Commissary Agency is procuring health and beauty aids through a channel that typically handles a wide variety of consumer packaged goods. This classification suggests that the contract is for the supply of finished, branded products rather than raw materials or specialized manufacturing. It places the transaction within the broader commercial supply chain for consumer goods, highlighting the commissary system's role in providing everyday necessities.

Given the short duration (91 days) and delivery order nature, what does this imply about the government's procurement strategy for these goods?

The short duration of 91 days and the designation as a 'DELIVERY ORDER' suggest a procurement strategy focused on meeting immediate or short-term needs rather than long-term strategic sourcing. This approach is often used for consumable goods where demand is predictable but fluctuates, or when specific quantities are needed within a defined timeframe. It allows the agency to procure goods as needed without committing to a lengthy contract period, potentially offering flexibility. However, it also implies that this might be one of several such orders placed over time to maintain inventory, rather than a single, comprehensive contract. The sole-source nature, combined with the short duration, could indicate a need for rapid fulfillment or a lack of pre-planning for sustained requirements.

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: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2100 WINCHESTER RD, NEENAH, WI, 54956

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,855,917

Exercised Options: $17,855,917

Current Obligation: $17,855,917

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G2942

IDV Type: IDC

Timeline