Defense Commissary Agency awards $30.1M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $30,159,915 ($30.2M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2011-03-31

Contract Duration: 89 days

Daily Burn Rate: $338.9K/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 $30.2 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 potential cost savings through competition. 2. The contract value represents a significant portion of spending within the flour milling sub-sector. 3. Limited competition may indicate a lack of readily available alternative suppliers or unique product requirements. 4. The firm-fixed-price contract type shifts cost risk to the contractor. 5. The short duration of the contract (89 days) suggests it may be for immediate or short-term needs. 6. The award is for resale items, indicating it supports commissary operations rather than direct military use.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar quantities and types of flour and baking products. The contract's value of over $30 million for a 3-month period suggests a substantial volume of goods. However, the lack of competition prevents a direct assessment of whether this price represents optimal value for the government compared to what might have been achieved through a competitive bidding process. Further analysis would require understanding the specific product specifications and market prices at the time of award.

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 typically occurs when only one responsible source is available or when there is a compelling justification for not seeking competition. The specific reasons for this sole-source determination are not detailed in the provided data. Without competition, it is difficult to assess the range of pricing and terms that might have been available from multiple bidders, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible prices, potentially resulting in less favorable terms for taxpayers.

Public Impact

Military personnel and their families benefit from the availability of essential baking products through commissary stores. The contract ensures the supply chain for a range of flour and miscellaneous baking items for resale. The geographic impact is likely nationwide, supporting commissary operations across various military bases. The contract supports the food manufacturing and distribution workforce involved in producing and delivering these goods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competitive award.
Sole-source justification needs further scrutiny to ensure necessity.
Short contract duration could indicate a need for more strategic, long-term planning for supply.

Positive Signals

Firm-fixed-price contract protects against cost overruns if contractor's costs increase.
Ensures availability of essential goods for military families.
General Mills Inc. is a well-established supplier, suggesting reliability.

Sector Analysis

The contract falls within the broader food manufacturing and wholesale trade sector, specifically the flour milling industry (NAICS 311211). This industry is characterized by large-scale production and distribution of essential food ingredients. The Defense Commissary Agency's spending on such items is part of a larger government effort to provide goods and services to the military community. Comparable spending benchmarks would typically involve analyzing other large-scale food procurement contracts by government agencies or major retail distributors.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the sole-source nature and the large prime contractor, it is unlikely that small businesses were directly involved as prime contractors. However, General Mills Inc. may utilize small businesses in its supply chain for raw materials or services, though this subcontracting information is not available.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting and procurement offices. Accountability measures are inherent in the firm-fixed-price contract, requiring delivery of specified goods. Transparency is limited due to the sole-source award, with further details on the justification and performance monitoring not publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Operations
Food and Agriculture Procurement
Resale and Retail Services
General Mills Inc. Government Contracts

Risk Flags

Sole-source award raises concerns about potential lack of competition and price optimization.
Short contract duration may indicate a reactive procurement rather than strategic planning.
Lack of detailed product specifications hinders in-depth value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.2 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 $30.2 million.

What is the period of performance?

Start: 2011-01-01. End: 2011-03-31.

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

Analyzing historical spending patterns for flour and miscellaneous baking products by the Defense Commissary Agency (DECA) is crucial for understanding the scale and consistency of this procurement. Without specific historical data for this contract, we can infer that DECA likely procures these items regularly to support commissary operations. The current award of $30.1 million for a short period suggests a significant, ongoing need. A comprehensive review would involve examining DECA's procurement history over several fiscal years, identifying trends in contract values, quantities, and awarded vendors for similar product categories. This analysis would help determine if the current award is in line with historical spending, or if there are significant deviations that warrant further investigation into market conditions, demand fluctuations, or changes in procurement strategy. Understanding past spending also aids in benchmarking future contract values and identifying potential cost-saving opportunities through strategic sourcing or longer-term agreements.

What specific types and quantities of flour and baking products are included in this $30.1 million contract?

The provided data categorizes the award as 'RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS' with a total value of $30,159,915.46. However, it does not specify the exact types of flour (e.g., all-purpose, bread flour, whole wheat) or the variety of miscellaneous baking products (e.g., sugar, yeast, baking powder, chocolate chips, cake mixes) covered under this contract. Similarly, the precise quantities for each item are not detailed. This level of specificity is typically found in the contract's statement of work or delivery schedules. Without this granular information, it is difficult to perform a detailed cost-per-unit analysis or to compare the value proposition against market prices for specific ingredients. The broad description suggests a comprehensive supply agreement for a range of essential baking staples intended for resale in commissary stores.

Why was this contract awarded on a sole-source basis to General Mills Inc.?

The data indicates this contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not provided in the data. Generally, sole-source awards are made when only one responsible source is capable of providing the required goods or services, or when there is a compelling urgency that precludes full and open competition. Reasons could include unique product formulations, proprietary manufacturing processes, or a critical need that cannot be met by other vendors within the required timeframe. For this contract, it might be that General Mills possesses unique capabilities or specific product lines essential for the Defense Commissary Agency's resale operations that cannot be replicated by other suppliers. A thorough review of the Justification for Other Than Full and Open Competition (JOFOC) document, if available, would provide the detailed rationale behind this decision.

What is the typical profit margin for General Mills Inc. on government contracts of this nature?

Determining the precise profit margin for General Mills Inc. on this specific government contract is not possible with the provided data. Profit margins are proprietary information and are influenced by numerous factors, including the contract type (firm-fixed-price in this case), negotiation leverage, market conditions, and the contractor's internal cost structure. While a firm-fixed-price contract generally allows the contractor to retain any savings if costs are lower than anticipated, it also means the contractor bears the risk of cost overruns. Without access to General Mills' cost accounting and the specific terms negotiated for this award, any estimation of profit margin would be speculative. Government agencies aim to negotiate fair and reasonable prices, but the lack of competition in this sole-source award makes it harder to ascertain if the profit margin achieved was optimal from a taxpayer perspective.

How does the $30.1 million contract value compare to the overall budget of the Defense Commissary Agency for food and grocery items?

The $30.1 million contract value represents a significant, albeit specific, portion of the Defense Commissary Agency's (DECA) overall budget for food and grocery items. DECA's mission is to provide a full-range of grocery stores and related services to military personnel and their families worldwide, operating on a cost-plus-one-percent-of-cost-of-goods-sold (C+1%) funding model. Their annual sales typically run into billions of dollars. Therefore, while $30.1 million is a substantial sum for flour and baking products, it is likely a component within a much larger procurement portfolio. To assess its proportion accurately, one would need to compare it against DECA's total annual spending on all food and grocery categories, or specifically on similar resale items. This comparison would help contextualize the contract's financial significance within DECA's broader operational expenditures and procurement strategies.

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: $30,159,915

Exercised Options: $30,159,915

Current Obligation: $30,159,915

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline