DoD's $20.8M Chilled Meats Contract with Tyson Foods Raises Questions on Competition and Value

Contract Overview

Contract Amount: $20,877,704 ($20.9M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Defense

Start Date: 2012-04-01

End Date: 2012-06-30

Contract Duration: 90 days

Daily Burn Rate: $232.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - CHILLED MEATS

Place of Performance

Location: SPRINGDALE, WASHINGTON County, ARKANSAS, 72762

State: Arkansas Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to TYSON FOODS INC. for work described as: RESALE - CHILLED MEATS Key points: 1. Significant spending on chilled meats highlights a key area of commissary operations. 2. Tyson Foods Inc. is the sole awardee, raising concerns about competitive pricing. 3. The contract's value of over $20 million warrants scrutiny for potential cost efficiencies. 4. The Defense Commissary Agency (DeCA) manages this significant food supply chain contract.

Value Assessment

Rating: questionable

The contract value of $20.8M for chilled meats is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts for bulk meat procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and may lead to higher costs for the government and taxpayers.

Taxpayer Impact: The absence of competition for a contract of this magnitude could result in taxpayers overpaying for essential goods.

Public Impact

Military families and personnel rely on commissary services for groceries, including fresh meat. The cost of food procured through this contract impacts the overall budget for military family support programs. Transparency in sole-source contracts is crucial for public trust in government spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Essential goods procurement
Supports military families

Sector Analysis

The food and beverage sector, particularly for essential goods like meat, is a significant area of government procurement. Benchmarks for bulk meat procurement can vary widely based on type, quality, and volume.

Small Business Impact

This contract does not appear to involve small business participation, as it is a sole-source award to a large corporation. Further analysis would be needed to confirm if subcontracting opportunities exist.

Oversight & Accountability

Oversight is critical for sole-source contracts to ensure fair pricing and prevent waste. The Defense Commissary Agency should have robust internal controls and justification processes for such awards.

Related Government Programs

Poultry Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award limits price competition.
Potential for inflated pricing due to lack of bids.
Contract duration and value warrant scrutiny.
Transparency of justification for sole-source award is unclear.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to TYSON FOODS INC.. RESALE - CHILLED MEATS

Who is the contractor on this award?

The obligated recipient is TYSON FOODS INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Commissary Agency).

What is the total obligated amount?

The obligated amount is $20.9 million.

What is the period of performance?

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

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

The justification for a sole-source award is crucial for understanding why competition was not pursued. Typically, this involves situations where only one responsible source can provide the required goods or services, or in cases of urgent and compelling need. Without this justification, it's impossible to fully assess the necessity and fairness of the procurement process.

How does the per-unit cost of these chilled meats compare to market rates for similar quality and quantity?

Comparing the per-unit cost to market rates is essential for determining value for money. Given this is a sole-source contract, direct comparison is difficult. However, analyzing historical pricing data for similar DoD contracts or publicly available wholesale meat prices could provide a benchmark to assess potential overpricing.

What measures are in place to ensure the quality and safety of the chilled meats provided under this contract?

Ensuring the quality and safety of food products is paramount. The Defense Commissary Agency likely has inspection protocols and quality assurance standards in place. Verifying adherence to these standards, including food safety certifications and regular audits, is key to ensuring taxpayer funds are used for safe, high-quality products.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Poultry Processing

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: 2200 DON TYSON PKWY, SPRINGDALE, AR, 72762

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,877,704

Exercised Options: $20,877,704

Current Obligation: $20,877,704

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4001

IDV Type: BOA

Timeline