DoD's $95.7M MRE contract awarded to SO-PAK-CO, INC. for canned goods

Contract Overview

Contract Amount: $95,703,491 ($95.7M)

Contractor: So-Pak-Co, Inc

Awarding Agency: Department of Defense

Start Date: 2020-11-12

End Date: 2021-12-31

Contract Duration: 414 days

Daily Burn Rate: $231.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8507795822!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 $95.7 million to SO-PAK-CO, INC for work described as: 8507795822!MEAL, READY-TO-EAT, IND, Key points: 1. Value for money appears fair given the fixed-price contract type and duration. 2. Competition dynamics indicate a full and open process after source exclusion, suggesting a deliberate procurement strategy. 3. Risk indicators are moderate, with a fixed-price contract and a single awardee. 4. Performance context is within the Defense Logistics Agency's mission to provide sustainment. 5. Sector positioning is within the food and beverage manufacturing industry supporting military logistics.

Value Assessment

Rating: fair

The contract value of $95.7 million over approximately 13 months for MRE components suggests a moderate per-unit cost. Benchmarking against similar large-scale food procurement contracts is difficult without more granular data on the specific MRE components. However, the firm fixed-price nature of the contract shifts risk to the contractor, which is a positive sign for cost control.

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 intended to be broad, specific sources were excluded for reasons not detailed in the provided data. The number of bidders is not specified, making it difficult to fully assess the level of competition and its impact on price discovery.

Taxpayer Impact: The exclusion of sources, even within a full and open framework, could potentially limit competitive pressure and may not have resulted in the lowest possible price for taxpayers.

Public Impact

Service members will receive essential nutritional support through these MRE components. The contract supports the Defense Logistics Agency's mission to provide logistical support to the armed forces. The primary geographic impact is on the supply chain for military rations, with potential benefits to the contractor's workforce in South Carolina. This contract sustains jobs within the food manufacturing sector, particularly at the awarded company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited transparency on the reasons for excluding specific sources in the competition.
Potential for reduced price competition due to source exclusion.
Reliance on a single awardee for a significant portion of MRE components.

Positive Signals

Firm fixed-price contract structure incentivizes contractor cost control.
Awarded to a company with a presence in South Carolina, potentially supporting regional employment.
Contract duration of over a year provides supply chain stability.

Sector Analysis

This contract falls within the broader food manufacturing and defense logistics sectors. The market for military rations is specialized, with a limited number of large-scale suppliers capable of meeting stringent military requirements for shelf-life, nutrition, and durability. Spending in this area is critical for operational readiness and troop welfare.

Small Business Impact

The provided data indicates that small business participation was not a primary focus for this specific contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. There is no information on subcontracting plans, so the impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for support services or components.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring contractor performance, compliance, and financial accountability. The Inspector General of the Department of Defense also has jurisdiction for investigating fraud, waste, and abuse.

Related Government Programs

Military Rations Procurement
Defense Logistics Agency Contracts
Food Supply Chain Management
Ready-to-Eat Meal Systems

Risk Flags

Potential for limited competition due to source exclusion.
Reliance on a single awardee for critical ration components.
Need for detailed performance monitoring to ensure quality and timely delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $95.7 million to SO-PAK-CO, INC. 8507795822!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 $95.7 million.

What is the period of performance?

Start: 2020-11-12. End: 2021-12-31.

What is the historical spending trend for MRE components by the Defense Logistics Agency?

Analyzing historical spending trends for MRE components by the Defense Logistics Agency (DLA) is crucial for understanding the scale and consistency of this procurement. While specific data for this contract shows an award of $95.7 million, a broader look at DLA's budget allocations for subsistence and ration support over the past five to ten years would reveal if this award represents an increase, decrease, or stable level of investment. Trends can be influenced by factors such as troop deployment levels, changes in ration composition, and strategic sourcing initiatives. Without access to DLA's historical procurement databases or budget reports, it's challenging to provide precise figures, but generally, the DLA maintains a consistent need for ration support, making this a recurring and significant expenditure category.

How does the awarded price compare to industry benchmarks for similar food production contracts?

Comparing the awarded price of $95.7 million for MRE components to industry benchmarks for similar food production contracts is complex due to the specialized nature of military rations. Standard commercial food production contracts may not account for the rigorous testing, packaging, shelf-life requirements, and logistical demands inherent in military MREs. However, if we consider the per-unit cost of individual MRE meals or components, it could be benchmarked against high-quality, shelf-stable food products. The firm fixed-price nature of this contract suggests that SO-PAK-CO, INC. has factored in all costs and risks. A detailed cost analysis would require breaking down the contract into specific components (e.g., entrees, sides, desserts) and comparing their unit prices to commercial equivalents, adjusted for military specifications and volume.

What are the primary risks associated with this contract for the government and the contractor?

For the government, the primary risks include potential supply chain disruptions if SO-PAK-CO, INC. faces production issues, quality control failures leading to non-compliant rations, or if the 'exclusion of sources' limited the competitive landscape to a point where pricing is suboptimal. Contractor performance risk is always present, though mitigated by the fixed-price structure. For SO-PAK-CO, INC., the main risks involve managing production costs to remain profitable under the fixed-price agreement, meeting stringent quality and delivery deadlines, and potential fluctuations in raw material costs. Failure to meet contract specifications could lead to penalties or contract termination, impacting their reputation and future business opportunities.

What is the track record of SO-PAK-CO, INC. in fulfilling government contracts, particularly for food supplies?

Assessing the track record of SO-PAK-CO, INC. is vital for understanding their capability to fulfill this significant MRE component contract. Information on their past performance, including contract history with the Department of Defense or other federal agencies, would reveal their reliability, quality of products, and adherence to delivery schedules. A review of past contract awards, modifications, and any reported performance issues or disputes would provide insight. Companies with a history of successful, on-time delivery of similar food products to government entities are generally considered lower risk. Without specific performance data or contract history details for SO-PAK-CO, INC., it's difficult to definitively assess their track record, but their selection for this substantial contract suggests they have met certain pre-qualification criteria.

How does the 'Full and Open Competition After Exclusion of Sources' clause impact the overall value proposition?

The 'Full and Open Competition After Exclusion of Sources' clause presents a nuanced impact on the value proposition. On one hand, it signifies an attempt to achieve broad competition, which is generally beneficial for price discovery and innovation. However, the 'exclusion of sources' implies that certain potential competitors were deliberately removed from the bidding process. The reasons for exclusion are critical; if based on legitimate technical capabilities or security requirements, the exclusion might be justified and still yield good value. If the exclusions were arbitrary or served to limit competition artificially, it could lead to higher prices and reduced value for taxpayers. The ultimate value depends on whether the remaining pool of bidders still provided sufficient competitive pressure to drive down costs and ensure quality.

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

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: $95,703,491

Exercised Options: $95,703,491

Current Obligation: $95,703,491

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ112

IDV Type: IDC

Timeline