DoD's $32.8M fruit and vegetable canning contract awarded to AmeriQual Group LLC shows fair value

Contract Overview

Contract Amount: $32,871,301 ($32.9M)

Contractor: Ameriqual Group LLC

Awarding Agency: Department of Defense

Start Date: 2012-07-13

End Date: 2013-12-03

Contract Duration: 508 days

Daily Burn Rate: $64.7K/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: 4521818070!BOA

Place of Performance

Location: EVANSVILLE, VANDERBURGH County, INDIANA, 47710

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to AMERIQUAL GROUP LLC for work described as: 4521818070!BOA Key points: 1. Contract value of $32.8M over 1.5 years suggests a moderate annual spend. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Performance in Indiana suggests a focus on regional supply chains. 5. The North American Industry Classification System (NAICS) code 311421 points to a specialized food processing sector. 6. Contract duration of 508 days is typical for this type of supply agreement.

Value Assessment

Rating: good

The contract's total value of $32.8M over approximately 17 months indicates a reasonable annual spend for specialized food canning services. Benchmarking against similar DoD food supply contracts suggests pricing is competitive, especially given the fixed-price nature which caps government liability. The absence of significant modifications or overruns further supports the assessment of good 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,' suggesting that while initial solicitations may have had limitations, the final award was based on a broad competitive process. The presence of 3 bidders indicates a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down prices and ensured that the Defense Logistics Agency secured the best possible terms for these essential food supplies.

Public Impact

Military personnel and their families stationed in various locations will benefit from the supply of canned fruits and vegetables. The contract ensures the availability of essential food items for military readiness and sustenance. Geographic impact is primarily within the United States, supporting domestic food production and distribution. Workforce implications include jobs in food processing, packaging, and logistics within the awarded contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the contractor faces production issues.
Dependence on a single contractor for a critical food supply item.
Ensuring consistent quality and safety standards for all delivered products.

Positive Signals

Fixed-price contract structure limits financial risk for the government.
Awarded under full and open competition, suggesting a robust bidding process.
Contractor's established presence in food processing indicates operational capacity.

Sector Analysis

The food processing industry, specifically canned goods, is a vital component of the broader food and beverage sector. This contract falls under the specialty food manufacturing subsector. The Department of Defense is a significant consumer of processed foods, relying on such contracts to maintain supply chains for domestic and deployed personnel. Market size for canned goods is substantial, with government contracts representing a stable demand source.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating no specific small business participation was mandated. Subcontracting opportunities for small businesses may exist at the discretion of AmeriQual Group LLC, but are not explicitly detailed in the provided data. This suggests the primary focus was on securing the best overall offer from a qualified large business.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), responsible for ensuring timely delivery and adherence to specifications. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties for non-performance. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed.

Related Government Programs

Defense Logistics Agency Food and Subsistence
Military Food Service Contracts
Department of Defense Food Procurement
Canned Goods Supply Chain Management

Risk Flags

Potential for supply chain vulnerability
Ensuring consistent product quality and safety
Dependence on contractor's production capacity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to AMERIQUAL GROUP LLC. 4521818070!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 $32.9 million.

What is the period of performance?

Start: 2012-07-13. End: 2013-12-03.

What is AmeriQual Group LLC's track record with the Department of Defense and other federal agencies?

AmeriQual Group LLC has a history of contracts with the Department of Defense, primarily through the Defense Logistics Agency (DLA), focusing on subsistence items like canned goods. Their performance has generally involved fulfilling large-scale food supply requirements for military installations and operations. While specific performance ratings are not detailed here, the consistent award of contracts suggests a satisfactory track record in meeting DoD's needs. Further investigation into contract performance reports and any past performance issues would provide a more comprehensive view of their reliability and quality of service across various federal engagements.

How does the $32.8M contract value compare to similar fruit and vegetable canning contracts awarded by the DoD?

The $32.8M contract value for fruit and vegetable canning services over approximately 17 months represents a significant but not extraordinary expenditure for the Department of Defense. Annualized, this contract is valued at roughly $19.3M per year. When compared to other DoD food procurement contracts, particularly those for canned goods or similar processed rations, this figure falls within a common range for large-scale supply agreements. Factors such as the specific types of fruits and vegetables, packaging requirements, and delivery locations influence the overall cost. The fixed-price nature of this award also suggests that the government secured a defined cost, making direct value comparisons more straightforward against other fixed-price agreements.

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

The primary risks associated with this contract include potential supply chain disruptions (e.g., crop failures, transportation issues), quality control failures in the canning process, and contractor financial instability. Mitigation strategies are primarily addressed through the contract's firm-fixed-price structure, which incentivizes the contractor to manage costs and maintain quality to avoid penalties. The Defense Logistics Agency's oversight and inspection processes are crucial for ensuring product quality and compliance. Furthermore, the competitive bidding process likely selected a contractor with demonstrated capacity and financial stability, reducing the risk of default. Contingency planning by the DLA for critical food supplies would also serve as a backstop.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method in ensuring competitive pricing for food supplies?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method aims to balance broad competition with specific requirements. While 'full and open' implies maximum participation, the 'after exclusion of sources' clause suggests that certain initial restrictions might have been in place, possibly due to specific technical needs or prior relationships, before opening it up more widely. In this case, with 3 bidders, it indicates a reasonable level of competition was achieved. This method can be effective in ensuring competitive pricing by allowing multiple qualified vendors to bid, driving down costs through market forces. However, the effectiveness is contingent on the number and capability of the bidders that ultimately participate.

What is the historical spending pattern for fruit and vegetable canning contracts by the Defense Logistics Agency?

Historical spending patterns for fruit and vegetable canning contracts by the Defense Logistics Agency (DLA) show a consistent need for these items to support military personnel globally. DLA procures a wide range of subsistence items, including canned goods, through various contract vehicles. Spending fluctuates based on operational tempo, troop deployments, and inventory management strategies. While this specific $32.8M contract is a single data point, DLA's overall annual subsistence budget runs into billions of dollars, with canned goods forming a stable, albeit relatively small, portion. Analyzing trends over multiple years would reveal patterns in demand, pricing, and contractor awards within this specific food category.

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: $32,871,301

Exercised Options: $32,871,301

Current Obligation: $32,871,301

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM3S112DZ107

IDV Type: IDC

Timeline