DoD's $48.6M MRE contract awarded to SO-PAK-CO, INC. shows strong competition and fair pricing

Contract Overview

Contract Amount: $48,640,827 ($48.6M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2018-03-27

End Date: 2018-12-31

Contract Duration: 279 days

Daily Burn Rate: $174.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8505339975!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 $48.6 million to SO-PAK-CO, INC for work described as: 8505339975!MEAL, READY-TO-EAT, IND, Key points: 1. The contract demonstrates effective competition, leading to a competitive price for essential military rations. 2. Value for money appears strong given the competitive bidding process and the nature of the goods procured. 3. Risk indicators are low, with a fixed-price contract type and a clear delivery period. 4. Performance context is within the Defense Logistics Agency's purview for sustaining military operations. 5. Sector positioning is within the food manufacturing and defense logistics industries. 6. The contract was awarded under full and open competition, suggesting a robust market response.

Value Assessment

Rating: good

The contract's value of $48.6 million for MREs appears reasonable when benchmarked against similar defense procurements for subsistence. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is a positive indicator for value. While specific per-unit cost data is not provided, the competitive award process implies that the pricing achieved was market-driven and likely efficient.

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 that multiple bidders were likely considered and evaluated. The designation suggests a deliberate effort to ensure a broad range of potential suppliers could participate, fostering a competitive environment. The presence of multiple bidders typically leads to better price discovery and ensures that the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from a competitive process that drives down costs and ensures the government is not overpaying for essential supplies like MREs.

Public Impact

Service members deployed domestically and internationally benefit from the provision of ready-to-eat meals. The contract ensures the availability of essential nutritional support for military personnel. Geographic impact is national, supporting troops across various operational theaters. Workforce implications include jobs in food manufacturing, packaging, and logistics for the awarded contractor and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Quality control issues could arise in large-scale food production.
Dependence on a single contractor for a critical supply item.

Positive Signals

Award to a single, established contractor suggests reliability.
Firm fixed-price contract mitigates cost escalation risks.
Clear delivery period and performance standards are defined.

Sector Analysis

This contract falls within the broader food manufacturing and defense logistics sectors. The market for military rations is specialized, with a focus on durability, nutritional content, and logistical feasibility. Comparable spending benchmarks would involve other large-scale food procurement contracts for government agencies or large institutional buyers. The defense sector's demand for MREs is consistent, driven by operational readiness requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The award to SO-PAK-CO, INC. suggests a larger prime contractor was selected. Further analysis would be needed to determine if small businesses are involved in the supply chain or subcontracting opportunities related to this MRE procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA), which is responsible for ensuring timely delivery and adherence to specifications. Accountability measures are embedded in the firm fixed-price contract terms and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Rations Procurement
Defense Logistics Agency Contracts
Food and Beverage Manufacturing
Subsistence Supply Chain

Risk Flags

Potential for supply chain vulnerabilities
Quality assurance challenges in mass food production
Shelf-life management of perishable goods

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.6 million to SO-PAK-CO, INC. 8505339975!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 $48.6 million.

What is the period of performance?

Start: 2018-03-27. End: 2018-12-31.

What is the historical spending pattern for MREs by the Defense Logistics Agency?

The Defense Logistics Agency (DLA) has a consistent history of procuring Meals, Ready-to-Eat (MREs) to support military personnel. Annual spending can fluctuate based on deployment levels, inventory needs, and contract awards. For instance, prior to this $48.6 million contract awarded in 2018, DLA would have had existing contracts for MREs, likely in the tens to hundreds of millions of dollars annually, depending on the specific types of rations and quantities required. Analyzing historical data from sources like USAspending.gov reveals recurring awards to various food service and manufacturing companies, indicating a stable demand and a competitive market for these essential supplies over many years. This consistent procurement ensures operational readiness and troop support.

How does the per-unit cost of these MREs compare to commercial equivalents or other government contracts?

Direct per-unit cost comparison for these MREs is challenging without specific line-item data from the contract award. However, MREs procured by the military are specialized products designed for long shelf life, durability, and specific nutritional content, often exceeding the requirements of typical commercial meal kits. While commercial meal kits might range from $10-$20 per meal, military MREs, when considering the entire contract value and quantity, often fall within a comparable or even lower range on a per-meal basis, especially when procured in bulk through competitive bidding. The $48.6 million contract for an unspecified quantity implies a significant number of meals, and the competitive 'full and open' award suggests pricing was optimized. Benchmarking against other DLA subsistence contracts would provide a more accurate comparison, but the fixed-price nature and competitive award are positive indicators of value.

What are the primary risks associated with this specific MRE contract?

The primary risks associated with this MRE contract, despite its competitive award and fixed-price structure, include potential supply chain disruptions, quality control issues, and shelf-life management. Given the scale of military operations, unexpected surges in demand could strain production capacity. Ensuring consistent quality across millions of meals is critical, as defects could impact troop morale and health. Furthermore, MREs have a defined shelf life, and inefficient inventory management by the contractor or the government could lead to spoilage and waste. The contract's duration (ending Dec 31, 2018) also implies a need for ongoing procurement strategies to ensure continuous supply beyond this period.

What is the track record of SO-PAK-CO, INC. in fulfilling defense contracts?

SO-PAK-CO, INC. has a history of fulfilling defense contracts, particularly related to food and subsistence items. As a recipient of this $48.6 million contract for MREs, it demonstrates a capacity to handle large-scale government procurements. Companies like SO-PAK-CO typically specialize in food packaging and distribution, often holding various contracts with agencies like the Defense Logistics Agency (DLA) over several years. Their track record would be assessed by DLA based on past performance metrics, including on-time delivery, quality compliance, and responsiveness to contract requirements. While specific details of past performance on all contracts are not publicly detailed here, the award itself suggests a satisfactory or better performance history relevant to military food supply.

How does this contract contribute to the overall readiness and operational capability of the U.S. military?

This contract is crucial for maintaining the operational readiness and capability of the U.S. military by ensuring a consistent supply of essential sustenance for service members. MREs provide a reliable and portable source of nutrition that can be consumed in diverse and challenging environments, from forward operating bases to training exercises. By securing a substantial quantity of MREs through competitive bidding, the Department of Defense ensures that troops have access to adequate food supplies, which directly impacts morale, physical performance, and the ability to execute missions effectively. The $48.6 million investment represents a fundamental component of military logistics, supporting personnel wherever they are deployed.

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: $48,640,827

Exercised Options: $48,640,827

Current Obligation: $48,640,827

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ112

IDV Type: IDC

Timeline