Defense Commissary Agency awards $32.8M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $32,798,748 ($32.8M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2009-10-01

End Date: 2009-12-31

Contract Duration: 91 days

Daily Burn Rate: $360.4K/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 $32.8 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Contract value represents a significant investment in essential commissary supplies. 2. Sole-source award raises questions about potential missed savings from competition. 3. Contract duration of 91 days suggests a short-term or urgent need. 4. Focus on flour and miscellaneous baking products indicates a specific supply chain requirement. 5. Geographic origin of the contractor (Minnesota) may influence logistics and delivery. 6. Fixed-price contract type offers cost certainty for the agency.

Value Assessment

Rating: fair

The contract value of $32.8 million for a 91-day period is substantial, averaging over $360,000 per day. Without comparable sole-source awards for similar quantities and types of baking products, it is difficult to definitively benchmark value. However, the absence of competition suggests that the Defense Commissary Agency may not have achieved the most competitive pricing possible. The fixed-price nature of the contract provides cost predictability, but the overall value proposition is hindered by the lack of competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source is available or when urgent, compelling reasons prevent a competitive solicitation. The lack of competition means that multiple bidders were not evaluated, and the agency did not benefit from the price discovery mechanisms inherent in a competitive bidding process. This raises concerns about whether the government obtained the best possible price and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing the award, there is a risk that the price agreed upon is higher than what could have been achieved in an open market.

Public Impact

Military personnel and their families benefit from the availability of essential baking ingredients through the commissary system. The contract ensures the supply of flour and other miscellaneous baking products, supporting morale and quality of life for service members. The geographic impact is primarily on commissary locations served by the Defense Commissary Agency, with potential distribution across various bases. Workforce implications are likely minimal for the agency, but the contractor, General Mills Inc., will utilize its existing production and distribution workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Short contract duration (91 days) may indicate an urgent need or a gap-filling measure, raising questions about long-term supply chain planning.
Lack of transparency regarding the justification for a sole-source award.
The specific nature of 'miscellaneous baking products' could mask a broader range of goods, making value assessment difficult.

Positive Signals

Ensures availability of critical supplies for military commissaries, supporting service members and their families.
Fixed-price contract provides cost certainty for the Defense Commissary Agency.
Award to a known entity (General Mills Inc.) may imply a level of established reliability in supply.

Sector Analysis

The food manufacturing and distribution sector is a critical component of the broader economy, with significant government procurement activity. This contract falls within the food milling and wholesale distribution sub-sectors. The Defense Commissary Agency, as a large institutional buyer, represents a substantial market for food products. Benchmarking this specific contract is challenging due to its sole-source nature and specific product focus, but overall federal spending on food and agricultural products is in the billions annually.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to General Mills Inc., a large corporation. There is no indication of subcontracting requirements for small businesses within the provided data. The impact on the small business ecosystem is therefore likely negligible for this specific award, as it bypasses the typical mechanisms designed to promote small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Commissary Agency's contracting officers and potentially the Department of Defense Inspector General. Accountability measures are inherent in the fixed-price contract terms, which define deliverables and payment. Transparency is limited due to the sole-source nature of the award, with the justification for this approach being a key area for oversight.

Related Government Programs

Defense Commissary Agency Operations
Food and Agricultural Product Procurement
Military Morale, Welfare, and Recreation Programs
General Mills Inc. Federal Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Limited transparency regarding specific product details and pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.8 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 $32.8 million.

What is the period of performance?

Start: 2009-10-01. End: 2009-12-31.

What is the specific justification for awarding this contract on a sole-source basis to General Mills Inc.?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this determination is not detailed in the data. Typically, sole-source awards are made under circumstances such as urgent and compelling needs where only one responsible source can reasonably satisfy the requirement, or when the supplies or services are available only from a single source. Without further documentation from the Defense Commissary Agency, the precise rationale remains unknown. This lack of transparency can be a concern for ensuring fair and competitive procurement practices.

How does the per-unit cost of flour and baking products under this contract compare to market rates or other federal contracts?

The provided data does not include per-unit cost information, making a direct comparison to market rates or other federal contracts impossible. The total award amount of $32,798,748.14 over a 91-day period, with only the broad categories of 'flour and other miscellaneous baking products,' does not allow for granular cost analysis. To perform such a comparison, detailed line-item pricing for specific products (e.g., per pound of flour, per unit of yeast) would be necessary. Additionally, benchmarking against other sole-source awards is inherently difficult as they may not reflect competitive market prices.

What is the historical spending pattern of the Defense Commissary Agency with General Mills Inc. for similar products?

The provided data only pertains to a single delivery order with an award date of 2009-10-01 and an end date of 2009-12-31. It does not offer insight into historical spending patterns with General Mills Inc. or for similar products. To assess historical trends, a comprehensive review of past contracts awarded by the Defense Commissary Agency (or other relevant agencies) to General Mills Inc. would be required. This would involve analyzing contract databases for previous awards, their values, durations, and the specific goods or services procured to identify any patterns or significant changes in spending.

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

The primary risk associated with a sole-source award for essential commissary supplies is the potential for inflated pricing. Without competitive bidding, the contractor may not feel the same pressure to offer the lowest possible price, leading to higher costs for the government and, by extension, taxpayers. Another risk is a lack of innovation or service improvement, as there is no competitive incentive for the sole provider to enhance their offerings. Furthermore, sole-source awards can raise concerns about fairness and equal opportunity for other potential suppliers who are excluded from bidding.

How does the contract's fixed-price type impact the risk allocation between the government and the contractor?

A firm fixed-price (FFP) contract, as indicated for this award, shifts the majority of the cost risk to the contractor. The contractor is obligated to complete the work or provide the goods for the agreed-upon price, regardless of their actual costs. If the contractor's costs exceed the fixed price, they absorb the loss. Conversely, if their costs are lower than anticipated, they retain the profit. This contract type provides the government with cost certainty, making budgeting more predictable. However, for sole-source awards, the government may not benefit from the lowest possible price that competition could have driven.

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: $32,798,748

Exercised Options: $32,798,748

Current Obligation: $32,798,748

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline