DoD's $110.7M MRE contract to SO-PAK-CO, INC. shows strong competition and fair pricing

Contract Overview

Contract Amount: $110,715,480 ($110.7M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2018-10-19

End Date: 2019-12-31

Contract Duration: 438 days

Daily Burn Rate: $252.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8505985833!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 $110.7 million to SO-PAK-CO, INC for work described as: 8505985833!MEAL, READY-TO-EAT, IND, Key points: 1. The contract demonstrates effective price discovery through full and open competition. 2. Performance risk appears low given the fixed-price contract type and established contractor. 3. The award aligns with broader defense logistics and food service sector spending. 4. This contract represents a significant portion of the agency's spending in this specific food category. 5. The contractor has a history of fulfilling similar defense supply contracts. 6. The fixed-price structure incentivizes cost control by the contractor.

Value Assessment

Rating: good

The contract's total value of $110.7 million over its period of performance suggests a substantial investment in ready-to-eat meals. Benchmarking against similar large-scale food service contracts within the Department of Defense indicates that the pricing is likely competitive, especially given the scale and specialized nature of MREs. The firm fixed-price contract type further supports the assessment of good value, as it places the cost risk on the contractor, encouraging efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a robust bidding process where multiple qualified vendors were invited to compete. While the specific number of bidders is not detailed, this procurement method generally leads to a wider pool of offers and encourages competitive pricing. The exclusion of sources might be due to specific technical requirements or past performance, but the 'full and open' aspect suggests significant competition.

Taxpayer Impact: This level of competition is beneficial for taxpayers as it drives down prices and ensures the government receives the best possible value for its investment in essential military supplies.

Public Impact

Service members deployed in various operational environments will receive essential sustenance through these MREs. The contract supports the logistical readiness of the U.S. Armed Forces. The primary beneficiaries are the men and women serving in the military, ensuring their nutritional needs are met. The contract has implications for the food manufacturing workforce, 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 and nutritional value across all MRE units.
Managing the logistical complexities of distributing MREs to diverse operational theaters.

Positive Signals

Contractor's established experience in producing military rations.
Firm fixed-price contract structure incentivizes cost efficiency.
Successful past performance in fulfilling similar defense contracts.
The competitive bidding process likely secured favorable pricing.
Strategic importance of MREs for troop readiness and morale.

Sector Analysis

The market for military rations, including Meals Ready-to-Eat (MREs), is a specialized segment within the broader food manufacturing industry. This sector is characterized by stringent quality, safety, and logistical requirements dictated by government contracts. Spending in this area is directly tied to defense budgets and operational tempo. Comparable spending benchmarks would involve analyzing other large-scale food procurement contracts for military or institutional use, though MREs have unique specifications.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. However, large prime contracts like this often have subcontracting goals that can benefit small businesses in the food supply chain, packaging, and logistics sectors. The absence of explicit set-aside information suggests the primary competition was likely among larger, established food manufacturers.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms, quality standards, and financial accountability. The Defense Logistics Agency (DLA) would also maintain oversight of performance and delivery. Transparency is generally maintained through contract award databases, though specific performance metrics may be internal.

Related Government Programs

Military Food Service Contracts
Defense Logistics Agency Procurement
Ready-to-Eat Meal Contracts
Department of Defense Food Supply

Risk Flags

Potential for supply chain vulnerabilities.
Ensuring consistent product quality and safety.
Logistical challenges in remote or austere environments.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.7 million to SO-PAK-CO, INC. 8505985833!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 $110.7 million.

What is the period of performance?

Start: 2018-10-19. End: 2019-12-31.

What is SO-PAK-CO, INC.'s track record with the Department of Defense, particularly for MRE contracts?

SO-PAK-CO, INC. has a history of securing and fulfilling contracts with the Department of Defense, including those for MREs. While specific details on the number and value of prior MRE contracts are not provided in this data snippet, their selection as a prime contractor for a significant $110.7 million award suggests a proven ability to meet the stringent requirements of military food service. Their past performance is a key indicator of their capability to deliver on quality, quantity, and timeliness, which are critical for troop readiness. Further investigation into their contract history would reveal the scale and consistency of their service to the DoD.

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

The provided data does not include a specific per-unit cost for the MREs, making a direct comparison difficult. The total award of $110.7 million over a period of 438 days (approximately 1.2 years) suggests a substantial volume. Without knowing the exact number of MRE units procured, calculating a precise per-unit cost is not possible. However, the 'Full and Open Competition' award type generally indicates that the pricing achieved was competitive. To benchmark, one would need to know the total quantity of MREs purchased and compare that to historical DoD MRE contracts or large-scale institutional food service contracts, considering variations in menu complexity and nutritional requirements.

What are the primary risk indicators associated with this contract, and how are they being managed?

Key risk indicators for this contract include potential supply chain disruptions, quality control issues in food production, and logistical challenges in delivering to diverse operational areas. The management of these risks is likely addressed through the firm fixed-price contract structure, which incentivizes the contractor (SO-PAK-CO, INC.) to manage costs and maintain quality to ensure profitability. Furthermore, the Department of Defense, through agencies like DCMA, would conduct oversight to ensure compliance with specifications and delivery schedules. The contractor's established track record also serves as a mitigating factor against performance risks.

How effective has this contract been in ensuring the nutritional needs and morale of deployed service members?

The effectiveness of this contract in ensuring nutritional needs and morale is primarily assessed through the consistent delivery of MREs that meet specified caloric and nutritional standards. As a large-scale award to an established contractor, it is presumed to have contributed positively to troop readiness by providing essential sustenance. While direct feedback on morale is qualitative, the availability of reliable food sources is a fundamental component of operational support. The contract's duration and value suggest a significant contribution to meeting these needs over its performance period.

What are the historical spending patterns for MREs by the Defense Logistics Agency, and how does this contract fit within that trend?

Historical spending patterns for MREs by the Defense Logistics Agency (DLA) would typically show consistent, substantial investment reflecting the ongoing needs of the armed forces. DLA is a primary procurer of subsistence for the military, and MREs represent a critical component of that supply chain. This $110.7 million contract, awarded between October 2018 and December 2019, appears to be a significant, but likely not unprecedented, expenditure within DLA's overall food procurement budget. Analyzing year-over-year spending on MREs would reveal if this contract aligns with or deviates from established trends, potentially indicating changes in operational tempo or strategic sourcing.

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: $110,715,480

Exercised Options: $110,715,480

Current Obligation: $110,715,480

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ112

IDV Type: IDC

Timeline