Defense Commissary Agency awards $31.3M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $31,340,623 ($31.3M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2012-01-01

End Date: 2012-03-31

Contract Duration: 90 days

Daily Burn Rate: $348.2K/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 $31.3 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 efficiencies. 3. A short performance period of 90 days suggests a tactical or immediate need for supplies. 4. The award value of over $31 million for a 90-day period warrants scrutiny for value. 5. General Mills Inc., a large corporation, is the sole awardee, potentially limiting market engagement. 6. The contract falls under the 'Flour Milling' industry, a niche but essential component of food supply chains.

Value Assessment

Rating: fair

The contract value of $31.3 million for a 90-day delivery order appears high for the specified goods. Without comparable contract data for flour and miscellaneous baking products, it is difficult to definitively benchmark the value. However, the scale of the award suggests a significant volume of goods, and the firm-fixed-price structure provides cost certainty. Further analysis would require understanding the specific types and quantities of products included.

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 that only one vendor, General Mills Inc., was solicited or considered for this award. The lack of competition limits the agency's ability to explore alternative suppliers or negotiate potentially lower prices through a competitive bidding process. This approach is typically used when only one source can fulfill the requirement, but it can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the absence of competition removes the downward pressure on prices that typically occurs in a competitive environment.

Public Impact

Military personnel and their families benefit from the availability of essential baking ingredients through the Defense Commissary Agency. The contract ensures the supply of flour and other miscellaneous baking products, supporting food service and retail operations within commissaries. The geographic impact is likely widespread, serving commissaries across the United States and potentially overseas locations where General Mills products are distributed. The contract supports the workforce involved in the production, logistics, and distribution of these food products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing for taxpayers.
Sole-source award raises questions about the necessity and justification for not seeking competitive bids.
The high dollar value for a short performance period warrants further investigation into the specific goods and quantities procured.

Positive Signals

Firm-fixed-price contract provides cost certainty for the agency.
Award to a well-established supplier like General Mills Inc. suggests reliability in product quality and delivery.
Ensures critical supply chain continuity for essential baking ingredients for military commissaries.

Sector Analysis

The contract falls within the Food Manufacturing sector, specifically the Flour Milling (NAICS 311211) sub-sector. This industry is characterized by large-scale production facilities and established supply chains. The Defense Commissary Agency is a significant purchaser of food products to support military personnel and their families. Spending in this category is generally stable, driven by consistent demand for staple food items. Benchmarking this contract's value would require comparing it to other large-volume flour and baking product procurements, both within the government and in the commercial sector.

Small Business Impact

This contract was awarded to General Mills Inc., a large corporation, and there is no indication of small business set-asides or subcontracting requirements. Therefore, this specific award is unlikely to have a direct positive impact on the small business ecosystem. The focus appears to be on securing a large volume of goods from an established supplier rather than promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically reside with the Defense Commissary Agency's contracting officers and potentially the Department of Defense Inspector General. Transparency is limited due to the sole-source nature of the award. Accountability measures would be tied to the terms of the firm-fixed-price contract, ensuring delivery of specified products. The lack of a competitive process reduces opportunities for public scrutiny of the procurement decision itself.

Related Government Programs

Defense Commissary Agency Food Procurement
Department of Defense Food Services
Federal Food Supply Contracts
Commodity Procurement Contracts

Risk Flags

Sole-source award lacks competitive justification.
High value for a short-term contract requires validation.
Potential for overpayment due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.3 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 $31.3 million.

What is the period of performance?

Start: 2012-01-01. End: 2012-03-31.

What specific types and quantities of flour and miscellaneous baking products were included in this $31.3 million contract?

The provided data does not specify the exact types and quantities of flour and miscellaneous baking products covered under this $31.3 million contract. The description 'RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS' is broad. Given the significant award value for a 90-day period, it is likely that this contract encompassed a wide range of flour types (e.g., all-purpose, bread, cake) and various other baking ingredients such as sugar, yeast, baking powder, and potentially pre-mixed baking components. The Defense Commissary Agency (DECA) operates a large retail network, and this procurement would aim to stock these items across multiple locations. Without a detailed line-item breakdown or statement of work, precise quantification is impossible, but the value suggests substantial volume to meet the needs of military commissaries nationwide or within a specific region.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates this contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source procurement. The specific justification for this sole-source award is not provided in the data. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or if the requirement is a follow-on to a previously competed contract where only one contractor can provide the necessary compatibility. For a commodity like flour, a sole-source award is unusual unless there are specific brand requirements, unique processing needs, or perhaps a critical supply chain disruption that only General Mills could address within the required timeframe. Further investigation into the contracting officer's justification documentation would be necessary to understand the precise reasons.

How does the $31.3 million value for a 90-day contract compare to typical spending for similar goods?

The value of $31.3 million for a 90-day contract for flour and miscellaneous baking products is substantial and warrants scrutiny. To benchmark this, one would need to compare it against similar contracts awarded by the Defense Commissary Agency (DECA) or other federal agencies for bulk food commodities. A rough estimation can be made: $31.3 million over 90 days equates to approximately $10.4 million per month, or about $348,000 per day. If this contract is for nationwide distribution, the per-day cost might be reasonable given the scale of DECA's operations. However, if the scope is more limited, or if the 'miscellaneous baking products' are high-cost specialty items, the value could be excessive. Without detailed product lists and quantities, a definitive comparison is challenging, but the amount suggests a very large procurement volume.

What is General Mills Inc.'s track record with the Defense Commissary Agency and other federal agencies?

General Mills Inc. is a major food manufacturer with a long history of supplying products to various government entities, including the Defense Commissary Agency (DECA). While this specific data point reflects a sole-source award, General Mills likely holds numerous other contracts, both competed and sole-source, for a wide array of food products. Their extensive distribution network and established reputation suggest a reliable supplier. To assess their track record thoroughly, one would need to examine their performance history on past DECA contracts, looking at factors like on-time delivery, product quality compliance, and any past performance issues or disputes. Their presence as a sole-source awardee here implies they meet DECA's requirements, but a broader review of their federal contracting history would provide a more complete picture of their performance and reliability.

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 like flour and baking products is the potential for inflated pricing due to the lack of competition. Taxpayers may end up paying more than necessary compared to a scenario where multiple vendors bid on the contract. Another risk is reduced innovation and efficiency, as the incumbent contractor may have less incentive to improve processes or offer cost-saving alternatives when faced with no direct competition. Furthermore, reliance on a single source can create vulnerabilities in the supply chain; if the sole supplier experiences production issues, logistical problems, or financial difficulties, the agency could face shortages. This underscores the importance of robust justification for sole-source awards and diligent oversight.

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: $31,340,623

Exercised Options: $31,340,623

Current Obligation: $31,340,623

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline