DoD's $12.8M food service contract with SELRICO SERVICES INC shows fair value despite limited competition

Contract Overview

Contract Amount: $12,817,549 ($12.8M)

Contractor: Selrico Services Inc

Awarding Agency: Department of Defense

Start Date: 2001-01-30

End Date: 2010-03-04

Contract Duration: 3,320 days

Daily Burn Rate: $3.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: WHITEMAN AFB, JOHNSON County, MISSOURI, 65305

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to SELRICO SERVICES INC for work described as: Key points: 1. Contract value of $12.8M over 10 years suggests a moderate annual spend. 2. The contract was competed, but with exclusions, indicating potential limitations on broad market participation. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The duration of the contract (over 9 years) allows for stable service delivery but may reduce future competitive opportunities. 5. The North American Industry Classification System (NAICS) code 722310 points to a standard food service operation. 6. The contract was awarded by the Department of the Air Force, a major component of the DoD.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details or comparable contracts. However, a $12.8 million spend over 10 years averages to approximately $1.28 million per year. This annual figure for food services, especially within a military context, appears to be within a reasonable range, assuming it covers a significant population or multiple facilities. The firm fixed-price nature of the contract provides cost certainty for the government, which is a positive indicator of value management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was not sole-source, certain potential bidders were excluded from the outset. The number of bidders (9) suggests some level of interest, but the exclusions mean the full breadth of the market may not have been engaged. This could potentially lead to less aggressive pricing than under truly open competition.

Taxpayer Impact: The exclusion of certain sources means taxpayers may not have benefited from the most competitive pricing possible. While 9 bidders participated, the exclusion limits the assurance that the government secured the absolute best value available in the market.

Public Impact

Military personnel and potentially their families stationed at the facility benefit from consistent food services. The contract ensures the provision of essential food services, contributing to the morale and operational readiness of military personnel. The geographic impact is localized to the specific Air Force installation where the services are provided. The contract supports jobs within the food service industry, both directly with the contractor and indirectly through its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to source exclusions could result in higher prices than a fully open process.
The long contract duration may limit opportunities for newer, potentially more innovative or cost-effective providers to enter the market.
Lack of specific performance metrics makes it difficult to assess the quality and efficiency of services delivered.
The contract type (Firm Fixed Price) might disincentivize the contractor from seeking cost-saving innovations if not explicitly required.

Positive Signals

The firm fixed-price contract provides budget certainty and protects the government from cost overruns.
A significant number of bidders (9) participated, indicating a competitive process even with exclusions.
The contract duration ensures continuity of essential food services for military personnel.
Awarded by the Department of Defense, suggesting adherence to rigorous procurement standards.

Sector Analysis

The food service industry is a significant sector within the broader services market. For the federal government, contracts in this space are crucial for supporting military bases, federal agencies, and other public institutions. Spending in this category is generally characterized by a mix of large, established providers and smaller, specialized firms. Benchmarking this contract's value against similar DoD food service contracts would require detailed service scope and location data, but the annual spend appears moderate for a long-term military installation contract.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) was not a specific set-aside criterion for this contract. Therefore, the direct impact on small business set-asides is none. However, SELRICO SERVICES INC, as the prime contractor, may engage small businesses as subcontractors, depending on their own procurement strategies and the specific requirements of the food service delivery. Without subcontracting data, the extent of small business involvement remains unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting officer and the relevant Department of the Air Force administrative contracting officer (ACO). Performance monitoring, quality assurance checks, and invoice approvals are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS, which provide award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DoD Food Services
Base Operations Support Contracts
Government Food Procurement
Military Dining Facilities

Risk Flags

Limited competition due to source exclusions.
Potential for price increases over the long contract term.
Lack of detailed performance metrics in summary data.
Contract duration may limit market responsiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to SELRICO SERVICES INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is SELRICO SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2001-01-30. End: 2010-03-04.

What is the track record of SELRICO SERVICES INC with the federal government, particularly in food services?

SELRICO SERVICES INC has a history of federal contracting, primarily with the Department of Defense. While this specific contract highlights their role in food services, a comprehensive review would involve examining all their awarded contracts, including their performance ratings, any past performance issues, and the types of services they have provided across different agencies. Analyzing their contract history can reveal patterns in their ability to meet government requirements, manage costs, and adhere to schedules, providing insight into their reliability as a contractor for this food service agreement.

How does the per-year cost of this contract compare to similar food service contracts at other military installations?

Without specific details on the scope of services, the number of personnel served, and the geographic location of the installation, a direct per-year cost comparison is difficult. However, the average annual cost of approximately $1.28 million for this contract can be used as a preliminary benchmark. To conduct a thorough comparison, one would need to identify contracts for similar food services at comparable military bases, adjusting for factors like the size of the installation, the type of dining facilities (e.g., cafeterias, mess halls), and the specific menu requirements. A detailed analysis would involve normalizing costs based on factors like cost per meal or cost per person served.

What are the primary risks associated with a long-term, firm-fixed-price contract for food services?

The primary risks with a long-term, firm-fixed-price contract for food services include potential price escalation for the contractor if input costs (food, labor, utilities) rise significantly above projections, potentially leading to reduced service quality if the contractor tries to cut corners to maintain profitability. For the government, the risk is that the fixed price may not reflect the most current market rates over the contract's extended duration, and the lack of flexibility might hinder the adoption of new, more efficient service models. Additionally, the long duration can reduce the incentive for the contractor to innovate or improve services beyond the minimum required, as they are locked into the agreed-upon terms.

What is the expected effectiveness of the food services provided under this contract in supporting military readiness and morale?

The effectiveness of the food services is crucial for military readiness and morale. Well-executed food services ensure that service members receive nutritious and timely meals, which directly impacts their health, energy levels, and overall well-being. This contract's effectiveness hinges on the contractor's ability to consistently meet quality standards, maintain sanitary conditions, and provide a variety of palatable food options. Positive feedback from service members and minimal complaints regarding food quality, availability, or service would indicate high effectiveness. Conversely, persistent issues could negatively affect morale and operational readiness.

How has federal spending on food services for the Department of Defense evolved over the past decade, and where does this contract fit in?

Federal spending on food services for the Department of Defense has generally remained substantial, reflecting the ongoing need to support a large military population across numerous installations worldwide. While specific figures fluctuate based on operational tempo, base closures/openings, and budget allocations, the overall trend indicates a consistent requirement for these services. This $12.8 million contract, awarded in 2001 and ending in 2010, represents a portion of the DoD's food service expenditure during that period. Its value is moderate when considered against the backdrop of the entire DoD's food service budget, which encompasses thousands of contracts globally.

What are the implications of the 'exclusion of sources' clause on the overall value and competition for this contract?

The 'exclusion of sources' clause signifies that the competition, while not sole-source, was restricted. This means that certain potential offerors were deemed ineligible to bid, either due to pre-qualification requirements, specific technical capabilities not met, or other criteria set by the agency. While this can help ensure that only qualified vendors participate, it inherently limits the pool of competitors. Consequently, the government might not receive bids from all capable companies, potentially leading to less aggressive pricing and reduced innovation compared to a scenario with truly open and unrestricted competition. The value proposition is thus assessed against a potentially narrower market landscape.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 717 W ASHBY PL, SAN ANTONIO, TX, 90

Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Small Business, Veteran Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline