DoD's $22.2M Chilled Meats Contract with Tyson Foods Raises Questions on Competition and Value

Contract Overview

Contract Amount: $22,205,612 ($22.2M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Defense

Start Date: 2012-07-01

End Date: 2012-09-30

Contract Duration: 91 days

Daily Burn Rate: $244.0K/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 $22.2 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 food procurement. 2. Tyson Foods Inc. is the sole awardee, raising concerns about limited competition. 3. The contract's value of $22.2M warrants scrutiny for potential cost efficiencies. 4. The Defense Commissary Agency's role in this procurement needs further examination. 5. The lack of a Public Service Code (PSC) is unusual for this type of contract.

Value Assessment

Rating: questionable

The contract value of $22.2M for a 91-day period is substantial. Without comparable contract data or a benchmark, assessing the pricing against similar procurements is difficult. The firm fixed price suggests cost certainty, but the lack of competition hinders a true value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a sole-source or limited-source award. This significantly restricts price discovery and potentially leads to higher costs for taxpayers. The rationale for limiting competition is not provided.

Taxpayer Impact: The lack of competitive bidding likely results in a higher price than could be achieved through an open market, impacting taxpayer funds negatively.

Public Impact

Military families and personnel rely on commissary services for groceries, including chilled meats. The significant expenditure on this contract could impact the availability of other goods or services. Transparency in defense procurement is crucial for public trust and efficient use of funds. The sole-source nature of this award may limit opportunities for other meat suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potentially inflated pricing due to limited competition
Short contract duration (91 days) may indicate a stop-gap measure or lack of long-term planning
Unclear rationale for sole-source award

Positive Signals

Firm fixed price contract provides cost certainty
Award to a known supplier (Tyson Foods) ensures product availability

Sector Analysis

The procurement falls under the broader category of food services and supplies for military commissaries. Spending benchmarks for chilled meats within the Department of Defense are not readily available, but $22.2M for a 3-month period is a considerable sum, suggesting a large volume or high-value product.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement. The sole-source nature of the award suggests limited opportunities for small business participation.

Oversight & Accountability

The award was made by the Defense Commissary Agency, which is responsible for managing commissaries worldwide. Oversight mechanisms should ensure that even sole-source contracts are awarded at fair and reasonable prices, with justifications for the limited competition.

Related Government Programs

Poultry Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Insufficient justification for sole-source award
Limited transparency in procurement process
High contract value for a short duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.2 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 $22.2 million.

What is the period of performance?

Start: 2012-07-01. End: 2012-09-30.

What was the specific justification for awarding this contract on a limited or sole-source basis, and were any efforts made to explore competitive options?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' This implies a sole-source or limited-source award. A thorough review would require access to the contract file to understand the specific justification, such as urgency, unique capabilities, or lack of market availability. Without this, it's impossible to determine if competitive options were adequately explored or if the limitation was truly warranted.

How does the per-unit cost of these chilled meats compare to market rates or other government contracts for similar products, given the $22.2M total award?

The data provides a total award amount of $22.2M for a 91-day period but lacks per-unit cost details or specific product descriptions. Without this granular information, a direct comparison to market rates or other government contracts is not feasible. The firm fixed price suggests a set cost, but its reasonableness cannot be assessed without knowing the quantity and type of meats procured.

What is the expected impact of this significant sole-source award on the overall budget and operational efficiency of the Defense Commissary Agency?

A sole-source award of $22.2M for a short period raises concerns about potential overpayment compared to a competitive process. This could strain the agency's budget, potentially diverting funds from other essential services or requiring increased appropriations. The lack of competition also misses opportunities to foster a more robust and potentially cost-effective supplier base for the agency.

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: $22,205,612

Exercised Options: $22,205,612

Current Obligation: $22,205,612

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0110G4001

IDV Type: BOA

Timeline