DoD's $14.2M Chilled Meats Contract with Tyson Foods Raises Questions on Competition and Value
Contract Overview
Contract Amount: $14,235,694 ($14.2M)
Contractor: Tyson Foods Inc.
Awarding Agency: Department of Defense
Start Date: 2008-10-01
End Date: 2008-12-31
Contract Duration: 91 days
Daily Burn Rate: $156.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE
Sector: Other
Official Description: RESALE - CHILLED MEATS
Place of Performance
Location: SPRINGDALE, WASHINGTON County, ARKANSAS, 72762
State: Arkansas Government Spending
Plain-Language Summary
Department of Defense obligated $14.2 million to TYSON FOODS INC. for work described as: RESALE - CHILLED MEATS Key points: 1. Significant spending on chilled meats highlights a key area of food procurement. 2. Sole-source nature of the contract limits competitive pricing and potential savings. 3. The contract's duration and fixed-price structure warrant scrutiny for cost-effectiveness. 4. Analysis of per-unit costs is crucial to assess value against market benchmarks.
Value Assessment
Rating: questionable
The contract value of $14.2M for chilled meats is substantial. Without competitive bidding, it's difficult to assess if Tyson Foods' pricing is optimal or aligned with market rates for similar wholesale grocery provisions.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating a lack of competition. This method bypasses the standard competitive bidding process, potentially leading to higher prices and reduced innovation.
Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for chilled meats, as there was no market pressure to drive down costs.
Public Impact
Military families and personnel rely on commissary services for groceries, including fresh meats. The Department of Defense's procurement practices impact the availability and cost of essential goods. Large contracts with major food suppliers can influence market dynamics and competition within the sector.
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 competition.
Positive Signals
- Ensures supply of essential goods (chilled meats).
- Established supplier (Tyson Foods) likely has capacity.
- Fixed-price contract provides some cost certainty.
Sector Analysis
The defense sector's food procurement, particularly for commissaries, involves substantial spending on perishable goods like chilled meats. Benchmarks for wholesale grocery distribution are essential for evaluating such contracts.
Small Business Impact
This contract does not appear to involve small businesses, as it was awarded to a large corporation, Tyson Foods Inc. Analysis should explore if subcontracting opportunities were considered or available.
Oversight & Accountability
The sole-source nature of this contract warrants further oversight to ensure the Department of Defense obtained fair pricing and that the justification for avoiding competition was robust.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Limited transparency on justification
- No clear small business participation
- Fixed-price contract may not reflect market fluctuations effectively
Tags
general-line-grocery-merchant-wholesaler, department-of-defense, ar, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.2 million to TYSON FOODS INC.. RESALE - CHILLED MEATS
Who is the contractor on this award?
The obligated recipient is TYSON FOODS INC..
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: 2008-10-01. End: 2008-12-31.
What was the specific justification for awarding this contract as sole-source, and were alternative competitive strategies explored?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' suggesting a sole-source award. A thorough review would require access to the contract's justification documentation to understand why competition was deemed impossible or impractical. Without this, it's difficult to assess if taxpayer funds were used efficiently or if alternative approaches could have yielded better value.
How does the per-unit cost of these chilled meats compare to market rates or similar government contracts awarded competitively?
The data does not provide per-unit cost details, only the total contract value. To assess value, a detailed breakdown of the types and quantities of chilled meats purchased is needed. This information would allow for comparison against industry benchmarks and other government contracts, particularly those awarded through competitive processes, to identify potential overpricing.
What is the potential impact on food quality and supply chain resilience when relying on a single, large supplier for essential items like chilled meats?
Sole-source contracts can create dependencies that may impact food quality if oversight is lax, and supply chain resilience can be compromised if the sole supplier faces disruptions. While Tyson Foods is a major player, relying exclusively on one entity for a critical need like military food supply could pose risks during unforeseen events, potentially affecting service members and their families.
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: 2210 W OAKLAWN DR, SPRINGDALE, AR, 72762
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $14,235,694
Exercised Options: $14,235,694
Current Obligation: $14,235,694
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0105G3222
IDV Type: IDC
Timeline
Start Date: 2008-10-01
Current End Date: 2008-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2019-06-07
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