DoD's $52.3M contract for canned fruits and vegetables awarded to AmeriQual Group LLC shows fair value

Contract Overview

Contract Amount: $52,305,184 ($52.3M)

Contractor: Ameriqual Group LLC

Awarding Agency: Department of Defense

Start Date: 2011-11-17

End Date: 2012-12-31

Contract Duration: 410 days

Daily Burn Rate: $127.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 4519666758!BOA

Place of Performance

Location: EVANSVILLE, VANDERBURGH County, INDIANA, 47710

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $52.3 million to AMERIQUAL GROUP LLC for work described as: 4519666758!BOA Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. Pricing appears reasonable when benchmarked against similar federal procurements. 3. The contract's duration and scope suggest a moderate level of risk. 4. Performance context is limited due to the nature of the goods procured. 5. This contract fits within the broader Defense Logistics Agency's food service supply chain. 6. No small business set-aside was utilized, but subcontracting opportunities may exist.

Value Assessment

Rating: good

The awarded amount of $52.3 million for canned fruits and vegetables appears to be within a reasonable range for federal food procurement. Benchmarking against similar contracts for subsistence items suggests that the pricing achieved through full and open competition is likely competitive. The firm fixed-price structure also provides cost certainty for the government. While specific unit cost data is not provided, the overall contract value relative to the expected goods suggests fair value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, specific sources may have been excluded for documented reasons. The presence of 3 bidders suggests a moderate level of competition. This level of competition is generally sufficient to drive competitive pricing, though a higher number of bidders could potentially yield even more aggressive pricing.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition scenario. The inclusion of multiple bidders helps ensure that taxpayer funds are used efficiently.

Public Impact

Military personnel and their families stationed domestically and potentially abroad will benefit from the provision of essential food supplies. The contract ensures the consistent availability of canned fruits and vegetables for military dining facilities. The geographic impact is primarily focused on the distribution points managed by the Defense Logistics Agency, serving various military installations. Workforce implications are likely within the food processing and logistics sectors supporting AmeriQual Group LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions affecting the availability of specific canned goods.
Dependence on a single contractor for a significant volume of essential food items.
Ensuring consistent quality and adherence to nutritional standards for all procured items.

Positive Signals

Awarded through a competitive process, suggesting a baseline level of cost-effectiveness.
Firm fixed-price contract provides budget certainty for the Department of Defense.
The contractor, AmeriQual Group LLC, has experience in supplying food products to government entities.

Sector Analysis

The market for canned fruits and vegetables is a mature segment of the food processing industry. Federal procurement of subsistence items, including canned goods, is a significant but specialized area. The Defense Logistics Agency (DLA) is a major procurer, managing a complex supply chain to support military operations worldwide. Comparable spending benchmarks for subsistence items can vary widely based on type, quantity, and delivery requirements, but this contract represents a substantial investment in ensuring food readiness.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the prime contractor is not a small business. There is no explicit information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem for this specific contract appears limited, though AmeriQual Group LLC may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Logistics Agency's contracting officers and quality assurance personnel. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Subsistence Prime Vendor Program
Department of Defense Food Service Operations
Federal Food Procurement
Military Food Supply Chain Management

Risk Flags

Potential for supply chain vulnerabilities.
Quality assurance and adherence to military specifications.
Price volatility of raw agricultural commodities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.3 million to AMERIQUAL GROUP LLC. 4519666758!BOA

Who is the contractor on this award?

The obligated recipient is AMERIQUAL GROUP LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $52.3 million.

What is the period of performance?

Start: 2011-11-17. End: 2012-12-31.

What is the track record of AmeriQual Group LLC in fulfilling federal food supply contracts?

AmeriQual Group LLC has a history of securing and fulfilling federal food supply contracts, particularly with the Department of Defense and other government agencies. Their experience often includes providing a range of food products, from canned goods to ready-to-eat meals. Publicly available contract data indicates past awards for similar subsistence items, suggesting a demonstrated capability to meet government requirements. However, a comprehensive review would involve examining past performance evaluations, any documented disputes, and the timeliness and quality of previous deliveries to fully assess their track record.

How does the unit cost of canned goods under this contract compare to commercial market rates?

Direct comparison of unit costs for canned goods under this specific contract to commercial market rates is challenging without detailed product specifications and quantities. Federal procurement often involves bulk purchasing and specific quality standards (e.g., military specifications) that can influence pricing differently than retail or wholesale commercial markets. While the overall contract value suggests fair pricing relative to federal spending, commercial equivalents for identical items might differ. Factors like packaging, shelf-life requirements, and delivery logistics specific to military needs can create price variations.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this contract include potential supply chain disruptions affecting the timely delivery of essential food items, particularly given the global nature of food sourcing and logistics. Quality control is another risk; ensuring that all canned goods meet stringent military specifications and nutritional standards is critical. Price volatility for raw agricultural commodities could also pose a risk, although the firm fixed-price nature of the contract shifts this risk primarily to the contractor. Finally, dependence on a single contractor for a significant portion of canned goods could create vulnerabilities if the contractor faces operational issues.

How effective is the Defense Logistics Agency in managing contracts for subsistence items like canned goods?

The Defense Logistics Agency (DLA) is generally considered effective in managing large-scale subsistence contracts, leveraging its extensive experience and established logistical networks. Their processes are designed to ensure food availability for military operations globally. Effectiveness is often measured by the consistent delivery of required goods and adherence to budget. However, like any large organization, DLA faces challenges, including adapting to changing dietary needs, managing complex international supply chains, and ensuring cost-efficiency across diverse product categories. Continuous oversight and performance monitoring are key to maintaining effectiveness.

What has been the historical spending trend for canned fruits and vegetables by the Department of Defense?

Historical spending by the Department of Defense (DoD) on canned fruits and vegetables has been substantial, reflecting the ongoing need to provision military personnel. While specific annual figures fluctuate based on operational tempo, troop levels, and strategic sourcing initiatives, the overall trend indicates a consistent requirement for these staple food items. Spending is managed through various mechanisms, including prime vendor contracts and direct procurements, often through the Defense Logistics Agency. Analyzing historical data reveals patterns in demand, pricing trends, and the evolution of procurement strategies aimed at optimizing value and ensuring supply chain resilience.

What is the significance of the 'after exclusion of sources' clause in this full and open competition award?

The 'after exclusion of sources' clause in a full and open competition award signifies that while the competition was intended to be broad, certain potential sources were deliberately excluded from bidding. This exclusion must be justified based on specific criteria outlined in federal acquisition regulations, such as national security concerns, specific technical requirements, or prior performance issues. While it maintains a level of openness, it narrows the competitive pool compared to a truly unrestricted full and open competition. The justification for exclusion is critical for ensuring fairness and maximizing potential value for the government.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ameriqual Group, LLC (UEI: 099771198)

Address: 225 W MORGAN AVE STE C, EVANSVILLE, IN, 08

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $52,305,184

Exercised Options: $52,305,184

Current Obligation: $52,305,184

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM3S112DZ107

IDV Type: IDC

Timeline