Department of Defense awards $68.9M contract for MREs, highlighting sustained demand for essential rations

Contract Overview

Contract Amount: $68,969,088 ($69.0M)

Contractor: Baxters North America, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-12

End Date: 2021-08-31

Contract Duration: 292 days

Daily Burn Rate: $236.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8507795825!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 $69.0 million to BAXTERS NORTH AMERICA, INC. for work described as: 8507795825!MEAL, READY-TO-EAT, IND, Key points: 1. Contract value represents a significant investment in military operational readiness. 2. Competition dynamics suggest a potentially competitive market for ration supply. 3. Performance period indicates a need for consistent, reliable food provisioning. 4. This contract aligns with broader defense spending on troop support and logistics. 5. The fixed-price structure aims to control costs and provide budget predictability.

Value Assessment

Rating: good

The contract value of $68.9 million for MREs appears reasonable given the scale and duration of the award. Benchmarking against similar large-scale ration procurements would provide further context, but the fixed-price nature suggests an effort to secure predictable costs. The absence of significant cost overruns in the provided data points towards effective cost management.

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 that while the competition was broad, specific exclusions were applied. This suggests a deliberate process to ensure fair opportunity while potentially addressing specific requirements or past performance. The number of bidders is not specified, but the 'full and open' designation generally implies multiple interested parties, fostering price discovery.

Taxpayer Impact: A competitive bidding process, even with exclusions, is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing, potentially leading to cost savings.

Public Impact

Service members deployed domestically and internationally benefit from access to ready-to-eat meals. The contract ensures the supply of essential nutritional support for military personnel. The primary geographic impact is on military bases and operational theaters where troops are stationed. This contract supports jobs within the food manufacturing and logistics sectors.

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 batches.
Managing logistical challenges for distribution to diverse operational environments.

Positive Signals

Demonstrated ability to fulfill large-scale ration requirements.
Commitment to providing essential sustenance for military operations.
Fixed-price contract offers cost certainty for the government.

Sector Analysis

The defense logistics sector relies heavily on contracts for essential supplies like food. This MRE procurement fits within the broader market for military rations, which is a specialized segment of the food production industry. Spending in this area is driven by operational tempo and troop deployment levels, with significant government investment aimed at ensuring readiness.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Further investigation would be needed to determine if small businesses are involved in the supply chain or if there are opportunities for them to participate in future procurements.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms likely include performance monitoring, quality assurance checks, and financial audits to ensure compliance with contract terms and value for money.

Related Government Programs

Military Rations Procurement
Defense Logistics Support
Food Supply Chain Management
Operational Readiness Support

Risk Flags

Potential supply chain vulnerabilities
Quality control consistency
Logistical challenges in distribution

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.0 million to BAXTERS NORTH AMERICA, INC.. 8507795825!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 $69.0 million.

What is the period of performance?

Start: 2020-11-12. End: 2021-08-31.

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

Analyzing historical spending on Meals, Ready-to-Eat (MREs) by the Department of Defense (DoD) reveals a consistent and substantial investment driven by the need for operational readiness. While specific figures fluctuate annually based on deployment levels, global security postures, and inventory management strategies, the overall trend indicates a sustained demand. For instance, in fiscal years preceding and following this $68.9 million award (2020-2021), the DoD has consistently allocated hundreds of millions of dollars annually towards ration procurement. This includes various types of rations beyond MREs, such as Unitized Group Rations (UGRs) and other specialized feeding solutions. Factors influencing these expenditures include troop presence in active theaters, training exercises, humanitarian assistance operations, and strategic stock-piling. The consistent allocation underscores the critical role of reliable food provisioning in military operations and highlights the enduring market for MRE suppliers.

How does the per-unit cost of these MREs compare to industry benchmarks or previous contracts?

Determining the precise per-unit cost of the MREs awarded under this $68.9 million contract requires more granular data than what is provided. The contract value represents the total obligation, and the number of units procured is not specified. However, general industry knowledge suggests that MREs are priced based on factors such as nutritional content, shelf life, variety of meals, packaging complexity, and production volume. Historically, per-unit costs for MREs have ranged from approximately $8 to $15, depending on these variables and the specific contract terms. To conduct a thorough comparison, one would need to identify the total number of MREs delivered under this award and divide the total contract value by that quantity. Subsequently, this calculated per-unit cost could be benchmarked against publicly available data from similar large-scale DoD ration procurements, analyses by defense spending watchdogs, or industry reports on food manufacturing costs for military-grade products.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this MRE contract revolve around supply chain reliability, quality assurance, and logistical execution. Supply chain risks include potential disruptions due to raw material shortages, manufacturing delays, or transportation issues, which could impact timely delivery to service members. Quality assurance risks involve ensuring that each MRE meets stringent nutritional, safety, and palatability standards, as deviations could affect troop morale and health. Logistical risks pertain to the effective distribution of these rations to diverse and often remote operational environments. Mitigation strategies likely include robust quality control protocols throughout the manufacturing process, contingency planning for supply chain disruptions (e.g., identifying alternative suppliers or transportation routes), and close coordination with military logistics commands to ensure efficient distribution networks. The fixed-price nature of the contract also incentivizes the contractor to manage these risks effectively to maintain profitability.

What is the track record of BAXTERS NORTH AMERICA, INC. in fulfilling government contracts, particularly for food supplies?

BAXTERS NORTH AMERICA, INC. has a history of fulfilling government contracts, including those related to food supplies. As a significant player in the food manufacturing industry, the company has experience in producing and delivering large quantities of food products. While specific details on past performance metrics for this particular MRE contract are not provided in the summary data, their ability to secure this substantial award suggests a positive track record with the Department of Defense or its agencies, such as the Defense Logistics Agency. Government contractors are typically evaluated on criteria such as past performance, technical capability, and price. A successful award of this magnitude often implies that BAXTERS NORTH AMERICA, INC. has met or exceeded expectations in previous engagements, demonstrating reliability, quality, and adherence to delivery schedules. Further due diligence would involve reviewing contract performance reports and any available past performance questionnaires associated with their government awards.

How does this contract align with the Department of Defense's broader objectives for food service and operational readiness?

This $68.9 million contract for MREs directly aligns with the Department of Defense's fundamental objectives of ensuring troop readiness and operational capability. Access to consistent, nutritious, and palatable food is a critical component of maintaining troop morale, health, and performance in any operational environment, whether in garrison, during training, or in deployed settings. MREs are specifically designed to provide a complete meal solution that requires minimal preparation and has a long shelf life, making them indispensable for field operations where traditional kitchen facilities are unavailable. By securing a substantial supply of these rations, the DoD reinforces its commitment to supporting its personnel, enabling them to sustain operations effectively regardless of location or circumstances. This procurement is a tangible manifestation of the DoD's strategic priority to maintain a ready and capable fighting force.

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: $68,969,088

Exercised Options: $68,969,088

Current Obligation: $68,969,088

Actual Outlays: $68,961,854

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S117DZ114

IDV Type: IDC

Timeline