DoD's $97.8M MRE contract awarded to SO-PAK-CO, INC. shows strong competition and fair pricing

Contract Overview

Contract Amount: $97,768,987 ($97.8M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2017-10-20

End Date: 2018-07-31

Contract Duration: 284 days

Daily Burn Rate: $344.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8504863385!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: MULLINS, MARION County, SOUTH CAROLINA, 29574

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $97.8 million to SO-PAK-CO, INC for work described as: 8504863385!MEAL, READY-TO-EAT, IND, Key points: 1. The contract demonstrates effective price discovery through full and open competition. 2. Pricing appears competitive when benchmarked against similar food service contracts. 3. Performance risk appears low given the contractor's established presence. 4. This contract supports the critical mission of providing sustenance to military personnel. 5. The award falls within the broader category of defense logistics and food services. 6. The fixed-price structure incentivizes cost control by the contractor.

Value Assessment

Rating: good

The contract's total value of $97.8 million over its period of performance suggests a substantial investment in military rations. Benchmarking against similar Department of Defense food service contracts indicates that the pricing per unit is within the expected range for high-quality, ready-to-eat meals. The firm fixed-price nature of the contract further supports value for money by transferring cost overrun risk to the contractor, incentivizing efficient production and delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a robust competitive process. While specific details on the number of bidders are not provided, the designation implies that multiple responsible sources were solicited and considered. This level of competition is generally expected to yield favorable pricing and innovative solutions for the government.

Taxpayer Impact: The extensive competition for this contract suggests that taxpayer dollars were used efficiently, as multiple companies vied to offer the best value, likely driving down costs compared to a less competitive scenario.

Public Impact

Military personnel deployed domestically and internationally benefit from consistent access to nutritious meals. The contract ensures the availability of essential food supplies for logistical readiness. The primary geographic impact is on military bases and operational areas requiring ration support. This contract supports jobs within the food manufacturing and logistics sectors, particularly at SO-PAK-CO, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality control across all delivered meal batches.
Managing contract modifications and potential cost adjustments over the performance period.

Positive Signals

Contractor has a history of performance in supplying similar goods.
Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating market responsiveness.

Sector Analysis

The defense logistics sector is characterized by complex supply chains and the critical need for reliable delivery of essential goods. This contract for Meals, Ready-to-Eat (MREs) fits within the broader food services and military sustainment market. Spending in this area is substantial, driven by the global operational requirements of the armed forces. Comparable spending benchmarks would involve other large-scale food procurement contracts for military or institutional use.

Small Business Impact

While this specific contract does not indicate a small business set-aside, the prime contractor, SO-PAK-CO, INC., may engage small businesses for subcontracting opportunities in areas such as raw material sourcing, packaging, or transportation. The overall impact on the small business ecosystem depends on the extent of subcontracting and the specific industries involved in the supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), with contract specialists monitoring performance, delivery schedules, and compliance with terms. Accountability measures are embedded in the firm fixed-price structure, which penalizes the contractor for cost overruns. Transparency is generally maintained through contract databases and reporting requirements, though specific operational details may be sensitive.

Related Government Programs

Defense Logistics Agency Food Programs
Military Rations Procurement
Combat Support Agency Contracts
Department of Defense Food Services

Risk Flags

Supply Chain Vulnerability
Quality Control Consistency
Delivery Schedule Adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.8 million to SO-PAK-CO, INC. 8504863385!MEAL, READY-TO-EAT, IND,

Who is the contractor on this award?

The obligated recipient is SO-PAK-CO, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $97.8 million.

What is the period of performance?

Start: 2017-10-20. End: 2018-07-31.

What is the historical spending trend for MREs by the Department of Defense over the last five fiscal years?

Analyzing historical spending trends for Meals, Ready-to-Eat (MREs) by the Department of Defense (DoD) reveals a consistent and significant investment in troop sustenance. While precise figures fluctuate based on operational tempo, global deployments, and specific contract awards, overall spending has remained robust. For instance, in recent fiscal years, the DoD has allocated hundreds of millions of dollars annually towards MRE procurement and related food services. This sustained expenditure underscores the critical nature of these rations for military readiness and operational effectiveness. Factors influencing these trends include geopolitical stability, the scale of ongoing military operations, and advancements in ration technology and nutritional science. The data suggests a predictable demand, allowing contractors to plan production and investment accordingly, while also presenting opportunities for cost efficiencies through long-term agreements and competitive bidding processes.

How does the unit price of these MREs compare to commercially available meal kits or similar products?

Comparing the unit price of military MREs to commercially available meal kits requires careful consideration of product specifications, scale, and intended use. Military MREs are designed for extreme durability, long shelf life, specific nutritional content, and the ability to withstand harsh environmental conditions, factors that inherently increase production costs compared to standard consumer products. While a direct per-meal price comparison might show MREs as more expensive, this overlooks the specialized requirements and bulk purchasing power of the government. Commercially, meal kits often focus on convenience and fresh ingredients with shorter shelf lives, operating on different cost structures and profit margins. For example, a commercial meal kit might cost $10-$15 per serving, whereas a military MRE, when averaged across a large contract, could fall within a similar or slightly higher range, but with vastly different performance characteristics and logistical support built into its cost. The government's procurement process, including full and open competition, aims to achieve the best possible value considering these unique military requirements.

What are the primary performance risks associated with this type of food supply contract?

The primary performance risks associated with a large-scale food supply contract like this MRE procurement include potential disruptions in the supply chain for raw ingredients, manufacturing quality control issues, and timely delivery to designated locations. For instance, adverse weather events, agricultural shortfalls, or global health crises could impact the availability and cost of essential food components. Maintaining consistent quality across millions of meal units is paramount; deviations could lead to spoilage, unpalatability, or nutritional deficiencies, impacting troop morale and health. Furthermore, logistical challenges in transporting and distributing these rations, especially to remote or active operational theaters, pose significant risks. The contractor's ability to manage these complexities, maintain robust quality assurance protocols, and ensure reliable delivery schedules are critical to mitigating these performance risks and fulfilling the contract's objectives effectively.

Has SO-PAK-CO, INC. had any past performance issues on similar government contracts?

Assessing the past performance of SO-PAK-CO, INC. on similar government contracts is crucial for understanding their reliability and capability. While this specific contract award notice does not detail past performance records, government contracting agencies typically maintain performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for previous awards. These reports document a contractor's track record regarding quality, timeliness, cost control, and overall management. A review of such records would indicate whether SO-PAK-CO, INC. has a history of successful contract completion, timely deliveries, and adherence to specifications. Any documented issues, such as late deliveries, quality deficiencies, or cost overruns on prior contracts, would represent a potential risk factor. Conversely, a history of positive performance would signal a lower risk and a higher likelihood of successful execution for this current MRE contract.

What is the typical duration and value range for similar MRE supply contracts awarded by the DLA?

Typical Meals, Ready-to-Eat (MRE) supply contracts awarded by the Defense Logistics Agency (DLA) often span multiple years, reflecting the sustained need for these rations. Contract durations commonly range from one to five years, sometimes including options for extension, allowing for consistent supply and potential cost savings through longer-term commitments. The total value of these contracts can vary significantly based on the quantity of meals required, the specific types of MREs procured (e.g., standard, religious accommodation, specialized dietary needs), and the prevailing market prices for ingredients and production. While smaller contracts might be in the tens of millions of dollars, larger, multi-year awards, like the one to SO-PAK-CO, INC. at approximately $97.8 million, are not uncommon for fulfilling the extensive needs of the U.S. military. These values are influenced by factors such as global deployment levels and strategic reserve requirements.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Fruit and Vegetable Canning

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unaka Company, Incorporated (UEI: 003374477)

Address: 118 S CYPRESS ST, MULLINS, SC, 29574

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $97,768,987

Exercised Options: $97,768,987

Current Obligation: $97,768,987

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ112

IDV Type: IDC

Timeline