DoD's $22.5M grocery resale contract awarded to Conagra Foods for assorted packaged goods

Contract Overview

Contract Amount: $22,514,863 ($22.5M)

Contractor: Conagra Foods Packaged Foods C

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2008-12-31

Contract Duration: 91 days

Daily Burn Rate: $247.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: 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 $22.5 million to CONAGRA FOODS PACKAGED FOODS C for work described as: RESALE - ASSORTED GROCERY Key points: 1. Contract awarded for a fixed price, indicating clear cost expectations. 2. The contract duration was short, at 91 days, suggesting a specific, immediate need. 3. Awarded as a delivery order, implying it's part of a larger framework agreement. 4. The contract was not competed, raising questions about potential cost savings. 5. The value of the contract is relatively modest in the context of large federal procurements. 6. Focus on packaged foods highlights a specific category within grocery resale.

Value Assessment

Rating: fair

The contract value of $22.5 million for a 91-day period is substantial for a single delivery order. Without comparable data on similar short-term grocery resale contracts or detailed cost breakdowns, assessing value for money is challenging. The fixed-price nature provides some cost certainty, but the lack of competition prevents benchmarking against market alternatives.

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 source is capable of fulfilling the requirement, or in specific emergency situations. The lack of competition means there was no opportunity for multiple vendors to bid, potentially leading to higher prices than if a competitive process had been employed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

Serves military personnel and their families by providing essential grocery items through the Defense Commissary Agency. Ensures availability of packaged food products within commissaries. Impacts the supply chain for Conagra Foods, a major food manufacturer. Supports the Defense Commissary Agency's mission to provide quality goods at a savings to service members.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in suboptimal pricing for taxpayers.
Sole-source award limits transparency into the procurement process and justification.
Short contract duration could indicate reactive procurement rather than strategic planning.

Positive Signals

Ensures supply of essential grocery items to military communities.
Fixed-price contract provides cost certainty for this specific order.
Award to a known entity (Conagra Foods) suggests a potentially reliable supplier.

Sector Analysis

The grocery wholesale and retail sector is a massive industry. Federal spending in this area, particularly through agencies like the Defense Commissary Agency (DECA), supports military communities. This contract falls under the broader category of wholesale trade, specifically for grocery merchants. Comparable spending benchmarks would involve analyzing other large-scale food supply contracts for government entities or large retail chains.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting subcontracting opportunities for small businesses. The award was made directly to Conagra Foods, a large corporation. This means the direct economic benefit to the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would fall under the Defense Commissary Agency (DECA) and potentially the Department of Defense's Inspector General. Transparency is limited due to the sole-source nature of the award. Accountability would be measured by the successful delivery of goods as specified in the contract terms and conditions.

Related Government Programs

Defense Commissary Agency Operations
Department of Defense Food Procurement
Federal Grocery Supply Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Short contract duration may indicate reactive procurement.
Limited public data on justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 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 $22.5 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?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION'. This typically implies that the contracting agency determined that only one responsible source was available or could be solicited for the requirement. Common reasons include specific technical capabilities, urgent and compelling needs where competition is not feasible, or if the requirement is a logical follow-on to a previous contract where only the original contractor can provide the necessary services or supplies. Without further documentation from the agency, the precise justification remains speculative, but it is the primary reason for bypassing a competitive bidding process.

How does the $22.5 million value compare to typical grocery resale contracts for the Defense Commissary Agency?

The $22.5 million value for a 91-day contract is significant, averaging approximately $7.5 million per month. To benchmark this, one would need to analyze historical DECA contracts for similar product categories (packaged foods) and contract types (delivery orders). Larger, multi-year contracts for overall commissary stock are common and would dwarf this amount. However, for a specific product category delivered over a short period, this value suggests a substantial volume of goods. Without access to DECA's procurement history and specific category spending, a precise comparison is difficult, but it represents a considerable expenditure for a limited timeframe.

What are the risks associated with a sole-source award for grocery supplies?

The primary risk of a sole-source award for grocery supplies is the potential for inflated pricing due to the lack of competition. Without competing bids, the government cannot be assured it is receiving the best possible price. There's also a risk of reduced innovation or service quality, as the sole provider may face less pressure to improve. Furthermore, it can raise concerns about fairness and transparency in the procurement process. For essential items like groceries, ensuring competitive pricing is crucial for maximizing the value of taxpayer dollars allocated to military commissaries.

What is Conagra Foods' track record with federal contracts, particularly with the Department of Defense?

Conagra Foods, Inc. is a major food producer and has a history of receiving federal contracts. While specific details for this $22.5 million delivery order are limited, the company has been a supplier to various government entities, including the Department of Defense, for a range of food products. Federal procurement databases often show numerous awards to large food manufacturers like Conagra for supplying commissaries, military bases, and other government facilities. Their track record generally involves providing a wide array of packaged food items. Performance history on specific contracts, including on-time delivery and product quality, would be detailed in agency procurement records.

What does the short contract duration (91 days) imply about the procurement strategy?

The short duration of 91 days for this $22.5 million contract suggests it was likely intended to fulfill an immediate or short-term need, rather than a long-term strategic supply requirement. This could be due to several factors: it might be a bridge contract to cover a gap until a larger, longer-term contract is awarded; it could be for seasonal or event-specific demands; or it might represent a specific, time-bound procurement action for a particular set of goods. The sole-source nature combined with the short duration could also indicate an urgent requirement where competition was not feasible within the necessary timeframe.

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: 1 CONAGRA DR, OMAHA, NE, 68102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,514,863

Exercised Options: $22,514,863

Current Obligation: $22,514,863

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0105G3356

IDV Type: IDC

Timeline