Defense Commissary Agency awards $31.8M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $31,861,301 ($31.9M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2010-07-01

End Date: 2010-09-30

Contract Duration: 91 days

Daily Burn Rate: $350.1K/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 $31.9 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Contract awarded on a firm fixed-price basis, indicating predictable costs for the agency. 2. The contract was not available for competition, raising questions about potential price advantages. 3. The duration of the contract is 91 days, suggesting a short-term or immediate need. 4. The North American Industry Classification System (NAICS) code 311211 points to flour milling as the primary industry. 5. The contract falls under the broader category of food and beverage procurement for military personnel and families.

Value Assessment

Rating: fair

The contract value of $31.8 million for a 91-day period for flour and miscellaneous baking products appears high on the surface. Without specific details on the quantity and type of products, a direct comparison to similar contracts is difficult. However, the firm fixed-price nature suggests cost certainty for the Defense Commissary Agency. Further analysis would require benchmarking against market prices for bulk flour and baking ingredients over a similar short-term period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source procurement. This means only one vendor, General Mills Inc., was solicited. The lack of competition limits the agency's ability to explore alternative suppliers or negotiate potentially lower prices through a competitive bidding process. The reasons for this sole-source award are not detailed in the provided data.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefits of competition, such as price reductions and innovation, are not realized.

Public Impact

Military personnel and their families shopping at commissaries benefit from the availability of essential baking ingredients. The contract supports the Defense Commissary Agency's mission to provide high-quality goods at a savings to military members. The procurement impacts the food supply chain, specifically the milling and baking product sectors. The contract ensures the availability of staple food items within commissary stores.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for the government.
The short duration might indicate a reactive procurement rather than strategic planning.
Limited transparency on the specific products and quantities procured.

Positive Signals

Ensures supply of essential baking products to military families.
Firm fixed-price contract provides cost predictability.
Award to a known entity like General Mills Inc. may imply reliability of supply.

Sector Analysis

The food manufacturing sector, specifically flour milling and baking products, is a significant part of the broader food industry. This contract represents a procurement within the government's food supply chain, aimed at supporting military commissaries. While the specific dollar amount is substantial for a short period, it must be viewed in the context of bulk food procurement for a large population. Comparable spending benchmarks would typically involve analyzing other large-scale food service contracts or bulk ingredient purchases by government agencies.

Small Business Impact

The provided data indicates that small business participation was not a factor in this specific award, as the contract was awarded to General Mills Inc. and there is no indication of small business set-asides or subcontracting requirements mentioned. This sole-source award does not appear to directly benefit the small business ecosystem in this instance.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's internal procurement regulations and the Department of Defense's broader oversight framework. Transparency is limited by the sole-source nature of the award and the lack of detailed justification in the provided data. 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
Federal Food and Beverage Contracts

Risk Flags

Sole-source award lacks competitive justification.
High value for a short-duration contract requires further scrutiny.
Lack of detailed product specification hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 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 $31.9 million.

What is the period of performance?

Start: 2010-07-01. End: 2010-09-30.

What specific types and quantities of flour and miscellaneous baking products were procured under this contract?

The provided data does not specify the exact types and quantities of flour and miscellaneous baking products. It only lists the general category 'RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS' and the total contract value of $31,861,300.64. To conduct a thorough value analysis, detailed product specifications, including weight, grade, and specific item types (e.g., all-purpose flour, bread flour, sugar, yeast, baking powder), would be necessary. This information is crucial for benchmarking against market prices and assessing if the awarded price reflects fair market value for the goods received.

What was the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. However, the specific justification for this determination is not provided. Common reasons for sole-source awards include unique capabilities of a single contractor, urgent and compelling needs where competition is not feasible, or when only one source is capable of meeting the requirement. Without this justification, it is difficult to assess whether the sole-source award was appropriate and if it resulted in a fair price for the government compared to what could have been achieved through competition.

How does the per-unit cost of flour and baking products compare to market rates for similar bulk purchases?

A precise per-unit cost comparison is not possible with the current data, as the specific quantities and types of products are not detailed. The total award of $31.8 million over 91 days for 'flour and other miscellaneous baking products' is a broad category. To benchmark, one would need to know the total tonnage of flour, types of flour, and quantities of other baking ingredients. If, for example, this contract was primarily for bulk flour, comparing the implied price per pound or ton against current commodity market prices for flour, adjusted for delivery and any specific quality requirements, would be necessary. Given the sole-source nature, a premium might be expected.

What is the track record of General Mills Inc. in supplying similar products to the Defense Commissary Agency or other government entities?

General Mills Inc. is a major food manufacturer with a significant presence in the commercial market. While the provided data does not detail their specific track record with the Defense Commissary Agency (DCA) or other government entities for this particular type of contract, their status as a large, established corporation suggests a capacity for large-scale production and distribution. However, the absence of competition in this award means that past performance, while potentially a factor in sole-source justification, is not validated against competing offers. Further investigation into their contract history with government agencies would be needed for a comprehensive assessment.

What are the potential risks associated with a sole-source award for essential food supplies?

The primary risk associated with a sole-source award for essential food supplies is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may end up paying more than necessary. Additionally, reliance on a single supplier can create vulnerabilities in the supply chain; if the sole source experiences production issues, logistical problems, or decides to discontinue the product line, the Defense Commissary Agency could face shortages. This lack of competition also reduces the incentive for the contractor to innovate or offer cost-saving efficiencies, as they have a guaranteed contract without needing to outperform rivals.

How does this contract fit into the overall spending patterns for food and beverages by the Defense Commissary Agency?

This contract for $31.8 million over approximately three months represents a significant, albeit short-term, expenditure for the Defense Commissary Agency (DCA). The DCA's overall mission is to provide groceries to military personnel and their families at a discount compared to civilian retailers. Their total annual spending on food and beverages would likely be in the hundreds of millions or even billions of dollars, encompassing a vast array of products. This specific contract, focused on baking staples, is a component of that larger procurement strategy. Analyzing its proportion relative to the DCA's total food budget and comparing its terms to other DCA contracts for similar product categories would provide better context on its significance.

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: $31,861,301

Exercised Options: $31,861,301

Current Obligation: $31,861,301

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline