DoD spent $24.6M on beef products from Tyson, with a significant portion allocated to South Dakota

Contract Overview

Contract Amount: $24,648,723 ($24.6M)

Contractor: Tyson Fresh Meats Inc

Awarding Agency: Department of Defense

Start Date: 2008-11-01

End Date: 2008-12-31

Contract Duration: 60 days

Daily Burn Rate: $410.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE BEEF PRODUCTS

Place of Performance

Location: DAKOTA DUNES, UNION County, SOUTH DAKOTA, 57049

State: South Dakota Government Spending

Plain-Language Summary

Department of Defense obligated $24.6 million to TYSON FRESH MEATS INC for work described as: RESALE BEEF PRODUCTS Key points: 1. Contract value represents a substantial investment in essential food supplies for military personnel. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and quality. 3. Performance indicators will be key to assessing the reliability of supply chain management. 4. This contract falls within the broader context of defense logistics and food service operations. 5. The specific product category highlights the reliance on established food suppliers for military needs.

Value Assessment

Rating: good

The total award of $24.6 million for beef products appears reasonable given the scale of military food service requirements. Benchmarking against similar contracts for bulk food procurement by the Defense Commissary Agency (DECA) would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract suggests that the government has locked in costs, mitigating some risk of price escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is designed to foster price discovery and encourage the most advantageous offers for the government. The presence of 3 bids suggests a healthy level of interest from qualified suppliers in providing these essential food products.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by ensuring a wide range of offers are considered, driving down costs through market forces.

Public Impact

Military personnel and their families stationed at various bases will benefit from the provision of high-quality beef products. The contract ensures the availability of essential food items for mess halls and commissaries. Geographic impact is noted with a specific mention of South Dakota, suggesting a concentration of delivery or operations in that region. The contract supports jobs within the meat processing and distribution sectors, contributing to the broader food supply chain workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery schedules.
Ensuring consistent quality and freshness of perishable goods over the contract duration.

Positive Signals

Award to a well-established supplier like Tyson Fresh Meats Inc. suggests a degree of reliability.
Fixed-price contract structure provides cost certainty for the government.
Full and open competition indicates a robust bidding process.

Sector Analysis

The defense food service sector relies heavily on large-scale contracts for procurement of essential goods like beef. This contract with Tyson Fresh Meats Inc. fits within the broader landscape of commodity food purchasing for military commissaries and dining facilities. The industry is characterized by established players and stringent quality control requirements, making competition focused on price, delivery, and adherence to specifications.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the scale and nature of beef product procurement, it is likely that larger, established meat processing companies are the primary participants. Subcontracting opportunities for small businesses might exist within the logistics and distribution network, but are not explicitly detailed in the provided data.

Oversight & Accountability

The Defense Commissary Agency (DECA) is responsible for overseeing this contract. Oversight would typically involve monitoring delivery schedules, product quality, and adherence to contract terms. Transparency is generally maintained through contract award databases, and accountability is enforced through contract clauses and potential penalties for non-performance. Inspector General (IG) jurisdiction would apply in cases of fraud or significant mismanagement.

Related Government Programs

Defense Commissary Agency Food Procurement
Military Food Service Contracts
Commodity Food Supply Contracts
Meat and Poultry Product Procurement

Risk Flags

Potential for supply chain vulnerability due to geographic concentration.
Perishability of goods requires strict temperature control and timely delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 million to TYSON FRESH MEATS INC. RESALE BEEF PRODUCTS

Who is the contractor on this award?

The obligated recipient is TYSON FRESH MEATS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.6 million.

What is the period of performance?

Start: 2008-11-01. End: 2008-12-31.

What is the historical spending pattern for beef products by the Defense Commissary Agency?

Analyzing historical spending patterns for beef products by the Defense Commissary Agency (DECA) is crucial for understanding the long-term investment in this category. While this specific contract awarded $24.6 million, examining DECA's budget allocations and actual expenditures over the past 5-10 years for similar beef procurements would reveal trends in volume, pricing, and supplier reliance. This historical data can help identify periods of increased or decreased spending, potentially correlating with changes in military personnel numbers, operational tempo, or shifts in dietary guidelines. Furthermore, comparing the average price per pound over time, adjusted for inflation, can indicate whether DECA has achieved cost efficiencies or faced escalating costs in its beef procurement efforts. Understanding these patterns provides context for the current contract's value and informs future budget planning and negotiation strategies.

How does the price of beef products in this contract compare to commercial market rates?

Benchmarking the price of beef products in this contract against commercial market rates is essential for assessing value for money. This involves comparing the per-unit cost (e.g., per pound) paid by the Defense Commissary Agency (DECA) to Tyson Fresh Meats Inc. with prevailing wholesale or retail prices for similar cuts and quality of beef during the contract period. Factors such as volume discounts, specific quality grades (e.g., USDA Choice, Prime), and packaging requirements can influence price differences. If the contract price is significantly higher than commercial rates, it may indicate inefficiencies in the procurement process, lack of sufficient competition, or unique logistical demands. Conversely, a lower price could suggest favorable negotiation or economies of scale. Accessing market price data from industry reports or agricultural market services would be necessary for a comprehensive comparison.

What are the specific performance metrics and quality standards required for the beef products?

The specific performance metrics and quality standards for the beef products procured under this contract are critical for ensuring the satisfaction of military personnel and maintaining food safety. These standards typically include detailed specifications on the type of beef (e.g., lean ground beef, specific cuts), grade (e.g., USDA Select, Choice), fat content, packaging (e.g., vacuum-sealed, frozen), and shelf life. Performance metrics would likely encompass on-time delivery rates, temperature control during transit, and adherence to food safety regulations (e.g., HACCP). The contract would outline procedures for inspection, acceptance, and rejection of products that do not meet these criteria. Failure to meet these standards could result in penalties, contract termination, or require corrective actions from the contractor, Tyson Fresh Meats Inc.

What is Tyson Fresh Meats Inc.'s track record with government contracts, particularly with the Department of Defense?

Tyson Fresh Meats Inc.'s track record with government contracts, especially those involving the Department of Defense (DoD), provides valuable insight into their reliability and performance. Researching their past contract awards, including the value, duration, and agencies involved, can reveal patterns of successful execution or instances of disputes and terminations. Examining performance evaluations from previous DoD contracts, if publicly available, would offer direct feedback on their ability to meet delivery schedules, quality standards, and other contractual obligations. A history of consistent, high-quality performance suggests a lower risk for this current contract. Conversely, a record marked by significant issues could raise concerns about potential disruptions or cost overruns. Information from sources like the Federal Procurement Data System (FPDS) or agency-specific contract databases can aid in this assessment.

How does the geographic concentration of spending in South Dakota impact overall supply chain efficiency?

The noted concentration of spending in South Dakota for this beef products contract warrants an analysis of its impact on overall supply chain efficiency. If a significant portion of the $24.6 million award is directed towards operations or deliveries within South Dakota, it could streamline logistics for bases in that region, potentially reducing transportation costs and delivery times. However, it might also indicate a reliance on a specific processing facility or distribution hub, which could pose a risk if that location experiences disruptions (e.g., natural disasters, labor issues). Understanding the specific nature of this concentration—whether it's processing, distribution, or final delivery—is key. If it represents a primary sourcing point, it could offer efficiencies but also create a single point of failure. Evaluating the proximity of this concentration to the end-users (military bases) and the availability of alternative sourcing or distribution channels is crucial for assessing the overall supply chain resilience and cost-effectiveness.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Animal (except Poultry) Slaughtering

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tyson Foods Inc. (UEI: 006903702)

Address: 800 STEVENS PORT DRIVE, NORTH SIOUX CITY, SD, 57049

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,648,723

Exercised Options: $24,648,723

Current Obligation: $24,648,723

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0207D0001

IDV Type: IDC

Timeline