DoD's $64.75M MRE contract awarded to AmeriQual Group LLC shows fair value with 3 bidders

Contract Overview

Contract Amount: $64,751,148 ($64.8M)

Contractor: Ameriqual Group LLC

Awarding Agency: Department of Defense

Start Date: 2015-11-18

End Date: 2016-12-31

Contract Duration: 409 days

Daily Burn Rate: $158.3K/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: 8502697700!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: EVANSVILLE, VANDERBURGH County, INDIANA, 47710

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $64.8 million to AMERIQUAL GROUP LLC for work described as: 8502697700!MEAL, READY-TO-EAT, IND, Key points: 1. AmeriQual Group LLC secured a significant portion of the MRE contract, indicating strong performance or competitive positioning. 2. The contract's value suggests a substantial demand for these essential supplies within the Department of Defense. 3. Competition dynamics, with three bidders, point towards a reasonably contested market for military rations. 4. The firm-fixed-price structure offers cost certainty for the government, mitigating budget risks. 5. Performance context is crucial; understanding delivery timelines and quality metrics will further illuminate value. 6. Sector positioning within the food manufacturing industry for defense applications is highlighted by this award.

Value Assessment

Rating: good

The contract's total award value of $64.75 million over its period of performance appears reasonable given the scale of military logistics. Benchmarking against similar large-scale ration procurements would provide a more precise value-for-money assessment. The firm-fixed-price contract type helps control costs for the government, suggesting a degree of pricing predictability. Without specific per-unit cost data or comparison to commercial equivalents, a definitive value assessment is challenging, but the competitive nature of the award suggests fair market pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The presence of three bidders suggests a healthy level of competition for this significant defense contract. A competitive environment generally leads to better price discovery and potentially more favorable terms for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would offer further insight into the effectiveness of the competition.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive offers for essential military rations.

Public Impact

Service members deployed domestically and internationally benefit from the provision of ready-to-eat meals. The contract ensures the continuous supply of essential sustenance for military operations. Geographic impact is broad, supporting troops across various operational theaters. Workforce implications include jobs in food manufacturing, logistics, and supply chain management, primarily in Indiana where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the sole awardee faces production or logistical challenges.
Ensuring consistent quality and nutritional value across all delivered meal kits is paramount.
Long-term reliance on a single primary contractor could reduce future competitive pressure.

Positive Signals

Award to a single, established contractor suggests a streamlined and efficient delivery process.
The firm-fixed-price contract provides budget certainty for the Department of Defense.
The contract's duration and value indicate a stable demand, supporting consistent production and employment.

Sector Analysis

This contract falls within the food manufacturing and defense logistics sectors. The market for military rations is specialized, requiring adherence to strict military specifications for shelf life, nutrition, and durability. While the overall food manufacturing market is vast, defense-specific contracts represent a niche. Benchmarking against other large government food procurements or similar defense logistics contracts would provide context for the $64.75 million award value.

Small Business Impact

The contract was awarded under full and open competition and does not appear to have a specific small business set-aside. However, the prime contractor, AmeriQual Group LLC, may engage small businesses for subcontracting opportunities within its supply chain. The impact on the small business ecosystem would depend on the extent of these subcontracting efforts and whether specific goals were set.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), which is responsible for procuring and distributing supplies for the U.S. military. 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 accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Supply Chain Dependency
Quality Control Consistency
Long-Term Contractor Reliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.8 million to AMERIQUAL GROUP LLC. 8502697700!MEAL, READY-TO-EAT, IND,

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 $64.8 million.

What is the period of performance?

Start: 2015-11-18. End: 2016-12-31.

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

Historical spending on Meals, Ready-to-Eat (MREs) by the Department of Defense (DoD) has been substantial, reflecting the continuous need to supply troops in various operational environments. While specific aggregate figures fluctuate annually based on deployment levels, contingency operations, and strategic stockpiling, the DoD consistently allocates hundreds of millions of dollars to ration procurement. For instance, in fiscal years preceding and following this contract award (2015-2016), spending on MREs and similar ration types has remained robust. Data from sources like the Federal Procurement Data System (FPDS) indicates that the Defense Logistics Agency (DLA) is the primary contracting activity for these items, managing numerous awards annually. The total annual spend can range from $300 million to over $500 million, depending on factors such as contract renewals, new solicitations, and the scale of global military presence. This specific $64.75 million contract represents a significant, but not the entirety, of the DoD's MRE procurement during its performance period.

How does the per-unit cost of these MREs compare to commercial off-the-shelf (COTS) meal equivalents?

Directly comparing the per-unit cost of military MREs to commercial off-the-shelf (COTS) meal equivalents is complex due to significant differences in specifications, production scale, and intended use. Military MREs are engineered for extreme durability, extended shelf-life (often 3-5 years or more), specific nutritional profiles tailored for high-exertion activities, and resistance to harsh environmental conditions. These requirements necessitate specialized ingredients, packaging, and rigorous testing, which inherently increase production costs compared to standard consumer meals. While a COTS meal might cost $5-$15, military MREs, when amortized over their long shelf-life and considering the specialized production, can have a higher per-unit cost. Without the exact per-unit breakdown from this specific $64.75 million contract, a precise comparison is not possible. However, industry analyses suggest that the specialized nature of military rations often results in a higher per-unit cost than comparable civilian products, a premium justified by their unique operational requirements.

What is AmeriQual Group LLC's track record with government contracts, particularly for food supplies?

AmeriQual Group LLC has a notable track record with government contracts, particularly in supplying food products. Based in Evansville, Indiana, the company has been a consistent provider of military rations, including MREs, to the Department of Defense for many years. Federal procurement data indicates that AmeriQual has been awarded numerous contracts, often through competitive bidding processes, for various types of military food provisions. Their history includes significant awards for MRE components, shelf-stable meals, and other food items essential for troop sustenance. The company's longevity and repeated awards suggest a capacity to meet stringent military specifications, delivery schedules, and quality standards. While specific performance metrics for past contracts are not always publicly detailed, their sustained presence as a prime contractor in this specialized market implies a generally positive performance history and a strong understanding of defense logistics and food service requirements.

What are the key performance indicators (KPIs) typically used to evaluate MRE contracts?

Key Performance Indicators (KPIs) for MRE contracts typically focus on ensuring the reliable delivery of high-quality, safe, and nutritionally adequate meals that meet stringent military specifications. Primary KPIs include On-Time Delivery Rate, which measures the percentage of orders delivered by the contractually required date. Quality Assurance and Compliance are critical, assessed through inspections and testing to verify adherence to nutritional content, ingredient integrity, packaging durability, and shelf-life requirements. Defect Rate, covering issues like damaged packaging, spoilage, or incorrect contents, is closely monitored. Furthermore, Contract Price Variance is tracked to ensure costs remain within the agreed-upon firm-fixed-price structure. Responsiveness to Government Inquiries and Compliance with Reporting Requirements are also important for effective contract management. Meeting these KPIs ensures that service members receive the essential sustenance they need, regardless of operational conditions.

Are there any known risks associated with the sole awardee of this specific contract, AmeriQual Group LLC?

While AmeriQual Group LLC has a history of successful contract performance, potential risks associated with any sole awardee of a large contract always warrant consideration. One potential risk is supply chain vulnerability; if AmeriQual faces unforeseen production disruptions (e.g., raw material shortages, labor issues, natural disasters affecting their facilities), it could impact the consistent availability of MREs for the DoD. Another consideration is the potential for complacency or reduced innovation over time if competition is limited in subsequent contract cycles. Financial stability is also a factor, although a company with a long history of government contracts is generally presumed to be financially sound. The DoD mitigates these risks through contract clauses requiring contingency planning, performance monitoring, and the potential for exercising contract options or seeking alternative sources if performance falters significantly. Regular audits and oversight by the Defense Contract Management Agency (DCMA) further help identify and address emerging risks.

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, 47710

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

Financial Breakdown

Contract Ceiling: $64,751,148

Exercised Options: $64,751,148

Current Obligation: $64,751,148

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM3S112DZ107

IDV Type: IDC

Timeline