Dod's $83M MRE Contract Awarded to Baxters North America, Inc. for 182 Days

Contract Overview

Contract Amount: $83,012,209 ($83.0M)

Contractor: Baxters North America, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-10-31

End Date: 2024-04-30

Contract Duration: 182 days

Daily Burn Rate: $456.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8510240182!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: BLUE ASH, HAMILTON County, OHIO, 45242

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $83.0 million to BAXTERS NORTH AMERICA, INC. for work described as: 8510240182!MEAL, READY-TO-EAT, IND, Key points: 1. The contract value represents a significant investment in ready-to-eat meals for military personnel. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and quality. 3. Performance context will be key to understanding the effectiveness of these MREs in operational settings. 4. Sector positioning highlights the Defense Logistics Agency's role in supplying essential food items. 5. Risk indicators may include supply chain disruptions or quality control issues for perishable goods.

Value Assessment

Rating: good

The awarded amount of $83,012,209.28 for 182 days of MREs suggests a per-diem cost that needs further benchmarking against similar DoD food service contracts. While the firm fixed-price structure provides cost certainty, the value proposition hinges on the quality and nutritional content of the meals delivered. Comparisons with historical MRE contracts and commercial bulk food procurement could offer a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of robust competition is generally expected to drive down prices and encourage innovation. The specific number of bidders and the evaluation criteria would provide a more definitive assessment of the competitive landscape and its impact on price discovery.

Taxpayer Impact: A full and open competition suggests that taxpayers benefited from a potentially more competitive bidding process, which can lead to better pricing and a wider selection of qualified vendors.

Public Impact

Military personnel deployed in various operational environments will benefit from these ready-to-eat meals. The contract ensures the provision of essential sustenance, supporting troop readiness and morale. The geographic impact is primarily within the operational theaters where U.S. forces are stationed. Workforce implications may include jobs in food production, packaging, and logistics for the awarded contractor and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain vulnerabilities impacting timely delivery of critical rations.
Ensuring consistent quality and nutritional value across all MRE units is paramount.
Logistical challenges in distributing meals to diverse and potentially remote operational areas.

Positive Signals

Awarded under full and open competition, suggesting a competitive market for MREs.
Firm fixed-price contract provides cost predictability for the Department of Defense.
Contract duration of 182 days allows for focused execution and performance monitoring.

Sector Analysis

The defense logistics and food service sector is a critical component of military operations, ensuring that personnel are adequately supplied regardless of location. This contract for MREs falls within the broader food manufacturing and distribution industry, which is characterized by large-scale production and complex supply chains. Comparable spending benchmarks in this sector would involve analyzing other large-scale food procurement contracts for government agencies, particularly those supporting deployed forces.

Small Business Impact

While this contract was awarded under full and open competition and does not explicitly mention small business set-asides, it is important to assess subcontracting opportunities. Large prime contractors often engage small businesses for specialized services or components. The impact on the small business ecosystem would depend on the extent to which BAXTERS NORTH AMERICA, INC. utilizes small business subcontractors for aspects of this MRE production and delivery.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Logistics Agency (DLA), which is responsible for procurement and supply chain management for the Department of Defense. Accountability measures will be embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Supply Chain Vulnerability
Quality Control
Delivery Timeliness

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.0 million to BAXTERS NORTH AMERICA, INC.. 8510240182!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 $83.0 million.

What is the period of performance?

Start: 2023-10-31. End: 2024-04-30.

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

Historical spending on MREs by the Department of Defense has fluctuated based on operational tempo and strategic needs. While specific aggregate figures for MREs alone are not always publicly itemized, the Defense Logistics Agency (DLA) consistently allocates substantial funds towards subsistence, which includes MREs. For instance, in fiscal years 2020-2023, DLA's subsistence spending has been in the billions annually. MRE contracts are typically awarded through competitive bidding processes, with values varying significantly based on quantity, duration, and specific menu requirements. Analyzing past awards for similar MRE contracts can provide a benchmark for the current $83 million award, helping to assess if it aligns with historical price trends and quantities.

How does the per-unit cost of these MREs compare to commercially available meal kits or bulk food purchases?

Directly comparing the per-unit cost of military MREs to commercial meal kits or bulk food purchases is challenging due to significant differences in specifications, production scale, and intended use. Military MREs are designed for extreme durability, long shelf life, specific nutritional profiles, and the ability to withstand harsh environmental conditions, often incorporating specialized packaging and preservation techniques. Commercial meal kits are typically geared towards convenience and freshness for immediate consumption, with shorter shelf lives and less stringent durability requirements. Bulk food purchases for commercial use may offer lower per-unit costs but lack the specialized attributes of MREs. Therefore, while the $83 million contract value might seem high on a per-meal basis compared to commercial bulk items, it reflects the unique military requirements and associated production costs.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance on this MRE contract?

Key performance indicators (KPIs) for this MRE contract would likely focus on several critical areas to ensure mission success. These typically include on-time delivery rates, ensuring that rations reach designated locations within specified timelines. Quality assurance is paramount, involving adherence to nutritional standards, absence of defects in packaging or food content, and compliance with food safety regulations. Furthermore, contract compliance, including accurate order fulfillment and adherence to the firm fixed-price terms, would be monitored. Feedback from end-users (military personnel) regarding palatability and suitability for operational conditions might also be incorporated, although this is often a secondary or qualitative measure. The Defense Contract Management Agency (DCMA) or DLA personnel would be responsible for monitoring these KPIs.

What is the track record of BAXTERS NORTH AMERICA, INC. in fulfilling large-scale government food supply contracts?

BAXTERS NORTH AMERICA, INC. has a history of supplying food products, including to government entities. Assessing their track record specifically for large-scale Department of Defense food supply contracts, particularly MREs, requires a detailed review of past performance evaluations and contract awards. Companies in this sector often have experience with government procurement, but the scale and specific requirements of MRE contracts can be demanding. A thorough analysis would involve examining their history with the Defense Logistics Agency (DLA) or other military branches, looking for evidence of consistent on-time delivery, quality compliance, and successful management of complex supply chains. Past performance data, often available through government contract databases or performance assessment reports, would provide the most direct insight into their capabilities and reliability for this type of contract.

Are there any identified risks associated with the specific ingredients or supply chain for these MREs?

Risks associated with the specific ingredients or supply chain for MREs can be multifaceted. For BAXTERS NORTH AMERICA, INC., potential risks could include fluctuations in the availability and cost of key agricultural commodities used in the meals (e.g., fruits, vegetables, meats). Geopolitical events, climate change impacts on crop yields, or global health crises can disrupt supply chains, affecting both ingredient sourcing and final product delivery. Furthermore, ensuring the integrity and safety of all ingredients, from farm to final packaging, is critical. The company must maintain robust quality control measures and supplier vetting processes to mitigate risks related to contamination, spoilage, or non-compliance with food safety standards. The 182-day duration of this specific contract suggests a need for reliable, short-to-medium term supply chain management.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: W.A. Baxter & Sons (holdings) Limited

Address: 4700 CREEK RD, CINCINNATI, OH, 45242

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $83,012,209

Exercised Options: $83,012,209

Current Obligation: $83,012,209

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S122DZ147

IDV Type: IDC

Timeline