DoD's $14.3M Pet Food Contract with Nestle Purina: Limited Competition Raises Concerns

Contract Overview

Contract Amount: $14,325,763 ($14.3M)

Contractor: Nestle Purina Petcare CO

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2008-12-31

Contract Duration: 91 days

Daily Burn Rate: $157.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - PET FOOD

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63164

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to NESTLE PURINA PETCARE CO for work described as: RESALE - PET FOOD Key points: 1. Significant spending on pet food by the Defense Commissary Agency. 2. Sole-source nature of the contract limits competitive pricing. 3. Potential for higher costs due to lack of competition. 4. Focus on a specific sector (grocery wholesale) for pet food procurement.

Value Assessment

Rating: questionable

The contract value of $14.3M for a 91-day period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar bulk pet food purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not available for competition, indicating a sole-source award. This significantly limits price discovery and may lead to less favorable terms for the government.

Taxpayer Impact: Taxpayers may be overpaying for pet food due to the absence of competitive bidding, as the government did not explore alternative suppliers or negotiate based on multiple offers.

Public Impact

Military families relying on commissary services benefit from the availability of pet food. The large sum allocated suggests a significant demand for pet food within the DoD. Procurement decisions impact the overall budget allocated for commissary operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
High contract value for a short duration

Positive Signals

Ensures availability of essential goods for military families

Sector Analysis

This contract falls under the General Line Grocery Merchant Wholesalers sector, specifically for pet food. Benchmarks for this type of procurement are difficult to establish without competitive data, but large volume purchases typically aim for cost efficiencies.

Small Business Impact

The data indicates this contract was awarded to Nestle Purina Petcare Co. and does not provide information on whether small businesses were involved as subcontractors or if opportunities were missed.

Oversight & Accountability

The sole-source nature of this award warrants further scrutiny to ensure the government obtained fair and reasonable pricing. Oversight should focus on the justification for not seeking competition.

Related Government Programs

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

Risk Flags

Lack of competition
Sole-source award
Potential for inflated pricing
Limited transparency in pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to NESTLE PURINA PETCARE CO. RESALE - PET FOOD

Who is the contractor on this award?

The obligated recipient is NESTLE PURINA PETCARE CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.3 million.

What is the period of performance?

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

What was the justification for awarding this contract on a sole-source basis, and were any market research efforts conducted to explore competitive options?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source award. Without further documentation, the specific justification and market research details are unknown. Typically, sole-source awards require a strong rationale, such as unique capabilities or urgent needs, to ensure taxpayer funds are used efficiently.

How does the unit cost of this pet food purchase compare to commercially available prices for similar products in bulk?

Direct comparison of unit cost is not possible with the provided data. The contract value is a total amount for a period, not a per-unit price. Assessing value requires detailed product specifications and market research on bulk pricing from multiple vendors, which is absent in this sole-source scenario.

What is the potential financial impact on the Defense Commissary Agency's budget due to the lack of competitive bidding?

The lack of competitive bidding creates a risk of overpayment. Without comparing multiple bids, the agency may have paid a premium. The $14.3M total contract value, if inflated due to non-competition, represents a direct financial loss or inefficient use of taxpayer funds that could have been allocated elsewhere.

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: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: CHECKERBOARD SQUARE, SAINT LOUIS, MO, 63164

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,325,763

Exercised Options: $14,325,763

Current Obligation: $14,325,763

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3169

IDV Type: IDC

Timeline