DoD's $31.6M Flour Purchase: General Mills Inc. Awarded Firm Fixed Price Contract

Contract Overview

Contract Amount: $31,614,324 ($31.6M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2012-04-01

End Date: 2012-06-30

Contract Duration: 90 days

Daily Burn Rate: $351.3K/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 $31.6 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Significant spending on essential baking ingredients. 2. Sole source award to General Mills Inc. raises competition concerns. 3. Potential for higher costs due to lack of competitive bidding. 4. Focus on Defense Commissary Agency operations.

Value Assessment

Rating: fair

The contract value of $31.6 million for flour and baking products is substantial. Without competitive pricing data, it's difficult to assess if this price is optimal compared to similar bulk ingredient purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially leads to less favorable pricing for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not leverage market forces to secure the best possible price.

Public Impact

Ensures availability of essential baking ingredients for military personnel and their families through commissaries. Supports a major food manufacturer, General Mills Inc., with a significant government contract. Highlights the government's reliance on specific suppliers for certain commodity goods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Lack of clear justification for sole-source.
Potential for inflated pricing.

Positive Signals

Ensures supply of critical food items.
Firm fixed price contract provides cost certainty.

Sector Analysis

This contract falls within the food manufacturing and distribution sector, specifically for commodity ingredients like flour. Government spending in this area is crucial for supporting military food services and commissaries.

Small Business Impact

The award went to General Mills Inc., a large corporation, with no indication of small business participation. This contract does not appear to support small business goals.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the pricing was fair and reasonable, and that competition was not unnecessarily excluded.

Related Government Programs

Flour Milling
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 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 $31.6 million.

What is the period of performance?

Start: 2012-04-01. End: 2012-06-30.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services, or in cases of urgent need. Further investigation would be required to determine the specific rationale behind this decision and whether it was appropriate.

How does the $31.6 million price compare to market rates for flour and baking products during the contract period?

Without access to historical market data for flour and baking products during the April-June 2012 period, a direct comparison is not possible. The lack of competition in this sole-source award suggests the government may not have achieved the most competitive pricing available in the open market.

What is the long-term impact of sole-source awards for essential commodities like flour on the Defense Commissary Agency's budget?

Sole-source awards for essential commodities can lead to higher long-term costs for the Defense Commissary Agency if prices are not rigorously negotiated and benchmarked against market alternatives. Over time, this can strain the agency's budget and potentially impact the prices passed on to commissary patrons.

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: $31,614,324

Exercised Options: $31,614,324

Current Obligation: $31,614,324

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline