Defense Commissary Agency awards $31.9M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $31,977,440 ($32.0M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2010-01-01

End Date: 2010-03-31

Contract Duration: 89 days

Daily Burn Rate: $359.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55426

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $32.0 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Contract awarded on a non-competitive basis, raising questions about price discovery and potential for overpayment. 2. Limited competition may indicate a lack of market alternatives or specific product requirements. 3. The contract duration of 89 days suggests a short-term need for these essential baking supplies. 4. Fixed-price contract type offers some cost certainty but may not fully capture market fluctuations. 5. The award to a single, large supplier warrants scrutiny for potential market concentration issues. 6. Analysis of past performance and pricing for similar items is crucial for assessing value.

Value Assessment

Rating: questionable

The contract's value of $31.9 million for a 89-day period for flour and miscellaneous baking products appears high, especially given the non-competitive award. Without comparable contract data or market benchmarks for these specific items, it is difficult to definitively assess value for money. The fixed-price nature provides some cost control, but the lack of competition prevents a thorough price comparison against market alternatives. Further analysis of the unit costs and historical pricing would be necessary to determine if this represents a fair market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one vendor, General Mills Inc., was solicited for this requirement. The lack of competition limits the government's ability to explore alternative suppliers, potentially leading to higher prices than if multiple bids were received. It suggests that either there are unique capabilities or circumstances that restrict competition, or the procurement process did not adequately explore competitive options.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, the government cannot be assured it is receiving the best possible price for these essential goods.

Public Impact

Military personnel and their families stationed at Defense Commissary Agency locations benefit from the availability of essential baking ingredients. The contract ensures a consistent supply chain for flour and other miscellaneous baking products needed for commissary operations. The geographic impact is likely nationwide, serving commissaries across various military installations. The contract supports the workforce involved in the production, distribution, and sale of these food products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potentially increases costs for taxpayers.
Lack of transparency in the sole-source justification requires further investigation.
Short contract duration may lead to frequent re-procurement costs and administrative burden.
Reliance on a single supplier could pose supply chain risks if General Mills faces production or delivery issues.

Positive Signals

Award to a well-established company like General Mills suggests a degree of reliability in product quality and delivery.
Fixed-price contract offers some predictability in budgeting for this expenditure.
Ensures availability of essential goods for military commissaries, supporting morale and quality of life for service members and families.

Sector Analysis

The food manufacturing sector, specifically flour milling (NAICS 311211), is a critical component of the broader food supply chain. This contract falls within the Defense Commissary Agency's mission to provide high-quality goods to military communities. While specific market size data for commissary flour procurement is not readily available, the overall U.S. flour milling industry is substantial. This contract represents a small portion of the overall defense food procurement budget, but highlights the government's role as a significant purchaser of food products.

Small Business Impact

This contract does not appear to include a small business set-aside. General Mills Inc. is a large corporation. There is no information provided regarding subcontracting opportunities for small businesses within this award. The lack of small business participation in this specific contract may not reflect the broader ecosystem, but it does mean that this particular procurement did not directly leverage small business capabilities.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting and financial management departments. As a delivery order under a larger contract vehicle (though the base contract type is not specified), oversight would focus on timely delivery, product quality, and adherence to the fixed-price terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Food Procurement
Department of Defense Food Services
Commodity Food Contracts
Military Food Supply Chain

Risk Flags

Sole-source award raises concerns about price competitiveness.
Lack of transparency in procurement justification.
Potential for overpayment due to limited competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.0 million to GENERAL MILLS INC. RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS

Who is the contractor on this award?

The obligated recipient is GENERAL MILLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $32.0 million.

What is the period of performance?

Start: 2010-01-01. End: 2010-03-31.

What is the historical spending pattern for flour and baking products by the Defense Commissary Agency?

Analyzing historical spending patterns for flour and baking products by the Defense Commissary Agency is crucial for understanding the context of this $31.9 million award. Without specific historical data for this contract, we can infer general trends. Defense commissaries procure a wide range of food items to serve military communities. Spending on staples like flour can fluctuate based on demand, inventory management strategies, and the availability of competitive pricing. Non-competitive awards, like this one, can sometimes be a deviation from a historically competitive procurement strategy, or they might reflect a consistent approach for specific, specialized items. Understanding if this is a recurring sole-source award or an anomaly would provide insight into the agency's procurement practices and potential value for money over time. Further investigation into prior contracts for similar items would reveal if this price point is consistent with past expenditures or represents a significant increase.

How does the unit cost of flour under this contract compare to market rates or similar government contracts?

A key analytical question is how the unit cost of flour under this $31.9 million contract compares to market rates or similar government contracts. Given that this is a sole-source award, direct comparison is challenging. However, benchmarks can be established. Market rates can be assessed by looking at wholesale flour prices from industry publications or major distributors. For government contracts, we would ideally compare this to other recent awards for flour by agencies like the Department of Agriculture or other branches of the Department of Defense. The absence of competition makes it difficult to ascertain if the price reflects true market value. If the unit cost is significantly higher than publicly available market data or comparable government contracts, it would strongly suggest that the non-competitive nature of this award has led to a less favorable price for the government and, by extension, taxpayers.

What specific justification was provided for the sole-source award to General Mills Inc.?

The justification for a sole-source award is critical for understanding why competition was bypassed. For this contract, awarded under 'NOT AVAILABLE FOR COMPETITION,' the specific justification needs to be examined. Common reasons for sole-source awards include unique capabilities, urgent and compelling needs where only one source can fulfill the requirement, or situations where a previous contract expired and a new competitive process could not be completed in time. Without access to the official justification document (e.g., a Justification and Approval or J&A), it's impossible to definitively state the reason. However, the fact that it's a sole-source award for a commodity like flour raises questions about whether adequate market research was conducted to identify potential competitors or if there are indeed highly specific requirements that only General Mills can meet. Understanding this justification is paramount to assessing the legitimacy and necessity of foregoing competition.

What is General Mills Inc.'s track record with government contracts, particularly for food supplies?

General Mills Inc. is a major food manufacturer with a long history, and it is highly probable they have a track record with government contracts, including those for food supplies. Analyzing this track record is essential for assessing risk and performance. Key aspects to investigate would include the number of past awards, their value, the agencies involved, and performance ratings. Specifically for the Defense Commissary Agency or similar entities, understanding their history of on-time delivery, product quality compliance, and any past disputes or contract terminations would be informative. A positive track record with consistent performance and fair pricing in previous government engagements would lend some confidence to this award, whereas a history of issues might raise red flags regarding the current contract's execution and value.

What are the potential risks associated with awarding a large contract for essential goods on a sole-source basis?

Awarding a large contract for essential goods like flour on a sole-source basis carries several potential risks. Firstly, there's the risk of paying a higher price than necessary due to the lack of competitive pressure, which directly impacts taxpayer value. Secondly, it can create a dependency on a single supplier, increasing vulnerability to supply chain disruptions if the sole provider faces issues (e.g., production problems, labor strikes, logistical failures). Thirdly, it may stifle innovation and discourage other potential suppliers from entering the market or developing competitive offerings for government contracts. Lastly, sole-source awards can sometimes be perceived as less transparent, potentially leading to scrutiny regarding fairness and the adequacy of market research conducted prior to the award.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Flour Milling

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 GENERAL MILLS BLVD, MINNEAPOLIS, MN, 55426

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

Financial Breakdown

Contract Ceiling: $31,977,440

Exercised Options: $31,977,440

Current Obligation: $31,977,440

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline