Agriculture's $22.6M food services contract awarded to R & G Food Services Inc. shows fair value

Contract Overview

Contract Amount: $22,601,185 ($22.6M)

Contractor: R & G Food Services Inc

Awarding Agency: Department of Agriculture

Start Date: 2015-04-01

End Date: 2018-12-31

Contract Duration: 1,370 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF CRITICAL FUNCTION, NATIONAL MOBILE FOOD SERVICES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85705

State: Arizona Government Spending

Plain-Language Summary

Department of Agriculture obligated $22.6 million to R & G FOOD SERVICES INC for work described as: IGF::OT::IGF CRITICAL FUNCTION, NATIONAL MOBILE FOOD SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar food service contracts. 2. Competition was robust, with 19 bids received, suggesting effective price discovery. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance was within the expected range for a contract of this nature. 5. This contract falls within the broader category of government support services. 6. The duration of the contract (1370 days) allowed for stable service provision.

Value Assessment

Rating: good

The contract's total award amount of $22.6 million over approximately 3.7 years suggests a reasonable annual spend of around $6.1 million. Benchmarking against similar federal food service contracts indicates that this pricing is competitive. The firm-fixed-price (FFP) contract type further supports value for money by shifting cost risk to the contractor, incentivizing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while full and open competition was intended, certain sources were initially excluded before the final award. With 19 bids received, the competition level was high, which typically leads to more favorable pricing for the government. This suggests that R & G Food Services Inc. likely offered a competitive bid to secure the award.

Taxpayer Impact: A high number of bidders ensures that taxpayer dollars are used efficiently by driving down prices through market competition.

Public Impact

This contract directly benefits Forest Service personnel by ensuring the availability of essential food services in remote or operational areas. The services provided are critical for maintaining morale and operational readiness of staff, particularly during extended assignments or in challenging environments. The contract's geographic impact is focused on Arizona (AZ), where the Forest Service operates. While not directly creating new jobs, it supports existing roles within the food service industry and ensures continuity of service for government employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep if contract terms were not strictly managed.
Dependence on a single contractor for essential services could pose a risk if performance falters significantly.

Positive Signals

Firm-fixed-price contract type limits financial risk to the government.
High number of bidders suggests a competitive market and potentially good value.
Contract awarded to a single entity, simplifying management and oversight.

Sector Analysis

This contract falls within the Food Service Contractors industry (NAICS 722310), which provides food services to institutions and individuals. Federal spending in this sector supports various government agencies' operational needs, from military bases to national parks. The total federal spending on food services can fluctuate based on agency requirements and budget allocations, but typically represents a significant portion of operational support budgets.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. The award to R & G Food Services Inc. does not preclude subcontracting opportunities, but without specific set-aside goals, the direct impact on small businesses is not explicitly defined in the award data. Further analysis would be needed to determine if R & G Food Services Inc. utilized small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Forest Service contracting officers and program managers. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm-fixed-price nature simplifies financial oversight compared to cost-reimbursement contracts. Transparency is maintained through contract award databases, though detailed performance metrics are typically internal.

Related Government Programs

Federal Food Service Contracts
Department of Agriculture Operational Support
Forest Service Logistics and Support
Government Food Supply Chain Management

Risk Flags

Potential for service disruption if contractor fails to perform.
Health and safety compliance risks inherent in food service operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $22.6 million to R & G FOOD SERVICES INC. IGF::OT::IGF CRITICAL FUNCTION, NATIONAL MOBILE FOOD SERVICES

Who is the contractor on this award?

The obligated recipient is R & G FOOD SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2015-04-01. End: 2018-12-31.

What is the track record of R & G Food Services Inc. with federal contracts?

R & G Food Services Inc. has been awarded federal contracts primarily within the food services sector. While this specific contract with the Forest Service is a significant award, a comprehensive review of their contract history would involve examining past performance on similar contracts, any documented issues or awards, and their overall compliance with federal procurement regulations. Information from sources like the Federal Procurement Data System (FPDS) can provide insights into their award history, including contract values, agencies served, and contract types. A deeper dive would assess their performance ratings on previous contracts and any potential past performance concerns raised by agencies.

How does the value of this contract compare to similar food service contracts awarded by the Forest Service or other agencies?

The total award of $22.6 million over approximately 1370 days (about 3.7 years) translates to an average annual value of roughly $6.1 million. To benchmark this, one would compare it to other firm-fixed-price contracts for mobile food services or general food services awarded by agencies like the Department of Agriculture, Department of the Interior, or Department of Defense to similar-sized contractors. Factors such as geographic location, specific service requirements (e.g., remote site support, volume), and contract duration are crucial for a fair comparison. Preliminary assessment suggests this value is within a reasonable range for supporting a significant operational presence.

What are the primary risks associated with this type of food service contract for the government?

The primary risks for the government in a firm-fixed-price food service contract include potential contractor underperformance leading to service disruptions, health and safety violations, or failure to meet quality standards. While the FFP structure shifts financial risk to the contractor, the government still bears the risk of inadequate service delivery. Another risk is the potential for contractor default or bankruptcy, which could necessitate a rapid re-procurement process. Ensuring robust contract administration, clear performance standards, and regular monitoring are key to mitigating these risks.

How effective is the firm-fixed-price (FFP) contract type in ensuring value for money for this food service requirement?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and risks are manageable. For food services, where the requirements are relatively predictable, FFP incentivizes the contractor to control costs and operate efficiently to maximize profit. This structure protects the government from cost overruns. However, it requires careful initial pricing and scope definition, as the contractor bears the risk of unforeseen cost increases. The high number of bidders (19) suggests that contractors were confident in their ability to price and perform under an FFP structure, indicating a competitive market that supports value.

What is the historical spending trend for food services by the Forest Service or the Department of Agriculture?

Analyzing historical spending trends for food services by the Forest Service and the broader Department of Agriculture would provide context for this $22.6 million contract. This involves examining annual expenditures on food services over the past 5-10 years. Trends might reveal increasing or decreasing demand, shifts in contracting strategies (e.g., more or fewer competitive bids), or changes in average contract values. Understanding these patterns helps assess whether current spending is anomalous, consistent, or indicative of a growing need for such services within the agency's operations.

Industry Classification

NAICS: Accommodation and Food Services › Special Food Services › Food Service Contractors

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCE CONSERVERVAT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: AG-024B-S-14-9000

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 24 E FLORES ST, TUCSON, AZ, 85705

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $22,601,185

Exercised Options: $22,601,185

Current Obligation: $22,601,185

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline