DoD's $27.7M MRE Contract Awarded to Baxters North America Amidst Full and Open Competition

Contract Overview

Contract Amount: $27,724,753 ($27.7M)

Contractor: Baxters North America, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-06-29

End Date: 2020-12-31

Contract Duration: 185 days

Daily Burn Rate: $149.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8507498468!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: CINCINNATI, HAMILTON County, OHIO, 45242

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $27.7 million to BAXTERS NORTH AMERICA, INC. for work described as: 8507498468!MEAL, READY-TO-EAT, IND, Key points: 1. The Department of Defense awarded a significant contract for MREs, highlighting the need for sustained food supply. 2. Baxters North America secured the contract through full and open competition, indicating a competitive bidding process. 3. The contract's value and duration suggest a moderate level of risk associated with supply chain and quality assurance. 4. The 'Fruit and Vegetable Canning' sector is crucial for military readiness and troop morale.

Value Assessment

Rating: good

The contract value of $27.7 million for 185 days of delivery appears reasonable given the nature of MREs and the competitive bidding process. Benchmarking against similar large-scale food supply contracts would provide a more precise assessment.

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,' suggesting a robust process where multiple vendors could participate after initial source exclusions. This method generally promotes competitive pricing and ensures the government receives best value.

Taxpayer Impact: The competitive nature of this award is likely to result in fair pricing, minimizing unnecessary taxpayer expenditure for essential military supplies.

Public Impact

Ensures troops have access to essential, ready-to-eat meals during operations. Supports the food manufacturing sector and associated supply chains. Demonstrates government's commitment to providing adequate resources for military personnel. The contract's success relies on timely delivery and quality of MREs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions affecting delivery timelines.
Quality control of MREs to meet nutritional and safety standards.
Price fluctuations in raw materials impacting long-term cost-effectiveness.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Contract duration provides a stable supply for a defined period.
Baxters North America's established presence in food production.

Sector Analysis

This contract falls within the food manufacturing and supply sector, specifically supporting the Department of Defense's logistical needs. Spending in this area is critical for operational readiness and is subject to rigorous quality and delivery standards.

Small Business Impact

While this specific award went to Baxters North America, Inc., the 'full and open competition' clause theoretically allows for small business participation if they meet the qualifications. Further analysis would be needed to determine if any small businesses were subcontractors or potential bidders.

Oversight & Accountability

The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this contract. Accountability measures would include performance monitoring, quality inspections, and adherence to delivery schedules to ensure taxpayer funds are used effectively.

Related Government Programs

Fruit and Vegetable Canning
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Potential for supply chain disruptions.
Quality assurance of food products.
Price volatility of raw materials.
Dependence on a single awardee for a critical supply.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.7 million to BAXTERS NORTH AMERICA, INC.. 8507498468!MEAL, READY-TO-EAT, IND,

Who is the contractor on this award?

The obligated recipient is BAXTERS NORTH AMERICA, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.7 million.

What is the period of performance?

Start: 2020-06-29. End: 2020-12-31.

What is the typical profit margin for MRE contracts of this size awarded through full and open competition?

Profit margins on government contracts, especially for essential supplies like MREs, can vary widely based on production costs, competition intensity, and contract terms. While specific data for this contract isn't public, industry averages for food manufacturing can range from 5-15%. The 'full and open competition' aspect suggests that the awarded price likely reflects a competitive margin, ensuring value for the government without excessively high profits for the contractor.

What are the primary risks associated with the long-term supply of MREs, and how are they mitigated in this contract?

Key risks include supply chain disruptions (raw material shortages, transportation issues), quality control failures (spoilage, nutritional deficiencies), and price volatility of ingredients. This contract mitigates these through a fixed-price structure, defined delivery schedules, and likely requires adherence to strict quality assurance protocols by the Defense Logistics Agency. The contract duration also provides some stability, but ongoing monitoring is crucial.

How does the 'exclusion of sources' clause in the competition method potentially impact the final price and vendor pool?

The 'exclusion of sources' clause, when used after initial 'full and open competition,' typically means that certain sources were identified and then excluded from the final bidding pool, often due to specific capabilities, past performance, or other pre-defined criteria. This can narrow the competition, potentially leading to slightly higher prices than if all possible sources were included. However, it can also ensure that the remaining bidders are highly qualified, potentially leading to better overall value and reduced risk.

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: Wornick Company the (UEI: 424821846)

Address: 4700 CREEK RD, CINCINNATI, OH, 45242

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $27,724,753

Exercised Options: $27,724,753

Current Obligation: $27,724,753

Actual Outlays: $2,912,746

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ114

IDV Type: IDC

Timeline