Defense Commissary Agency spent $32.6M on flour and baking products from General Mills Inc

Contract Overview

Contract Amount: $32,648,274 ($32.6M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2011-10-01

End Date: 2011-12-31

Contract Duration: 91 days

Daily Burn Rate: $358.8K/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 $32.6 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Value for money appears fair given the fixed-price contract for essential goods. 2. Competition dynamics were limited, with the contract awarded via other than full and open competition. 3. Risk indicators are low due to the nature of the commodity and established supplier. 4. Performance context is within a defined delivery period for commissary supplies. 5. Sector positioning is within the food and beverage supply chain for military personnel and families.

Value Assessment

Rating: fair

The contract value of $32.6 million for flour and miscellaneous baking products from General Mills Inc. appears reasonable for the quantity and type of goods procured by the Defense Commissary Agency. Benchmarking against similar commodity contracts is difficult without more specific product details and market data. However, the firm fixed-price structure suggests that the price was determined upfront, potentially limiting upside risk for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition scenario. Specific details on why full and open competition was not utilized are not provided in the data. This limited competition may have resulted in a higher price than could have been achieved in a more open bidding environment.

Taxpayer Impact: Limited competition means taxpayers may not have received the most competitive pricing available in the market for these essential baking products.

Public Impact

Commissary shoppers, including military members and their families, benefit from the availability of baking products. Services delivered include the supply of flour and other miscellaneous baking items to commissaries. Geographic impact is likely widespread, serving military installations where commissaries are located. Workforce implications are minimal, primarily related to logistics and distribution of the goods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding could lead to suboptimal pricing for taxpayers.
Limited transparency into the justification for sole-source award.

Positive Signals

Ensured supply of essential baking goods to military communities.
Utilized an established supplier, General Mills Inc., potentially ensuring product quality.

Sector Analysis

This contract falls within the food manufacturing and wholesale trade sector, specifically dealing with grain and flour milling. The market for such commodities is generally stable, with large established players like General Mills. The spending of $32.6 million represents a portion of the Defense Commissary Agency's overall procurement budget for food and household goods, aimed at providing goods to military personnel at reduced prices.

Small Business Impact

The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. As a large sole-source award to a major corporation, it is unlikely to have directly benefited small businesses through set-asides, though General Mills may utilize small business suppliers in its broader operations.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's procurement and financial management systems. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the 'NOT AVAILABLE FOR COMPETITION' award status.

Related Government Programs

Defense Commissary Agency Food Procurement
Commodity Food Contracts
General Mills Inc. Federal Contracts

Risk Flags

Limited Competition
Lack of Transparency in Award Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 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 $32.6 million.

What is the period of performance?

Start: 2011-10-01. End: 2011-12-31.

What is the historical spending pattern of the Defense Commissary Agency on flour and baking products?

Historical spending data for the Defense Commissary Agency (DECA) on flour and baking products reveals a consistent need for these staples to support military families. While this specific $32.6 million contract with General Mills Inc. covers a defined period, DECA's overall procurement strategy involves ongoing acquisition of food items. Analyzing past contracts would show fluctuations based on demand, inventory management, and prevailing market prices. Without access to a comprehensive historical database of DECA's food procurement, it's challenging to provide precise year-over-year spending figures. However, it is reasonable to assume that such essential items are procured regularly, with contract values varying based on quantity, supplier, and economic conditions. The agency's mission to provide goods at a discount necessitates careful budgeting and procurement practices across all food categories, including baking supplies.

How does the unit cost of flour in this contract compare to market rates at the time of award?

Determining the precise unit cost of flour within this $32.6 million contract is not possible with the provided data, as it aggregates 'flour and other miscellaneous baking products.' Furthermore, the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which limits the ability to benchmark against competitive market rates. General Mills Inc. is a major producer, and their pricing would reflect their production scale and distribution network. To compare with market rates, one would need to know the exact quantities of each specific product (e.g., pounds of all-purpose flour, types of yeast, sugar, etc.) and the prevailing wholesale prices for those items from various suppliers during the contract period (October 1, 2011 - December 31, 2011). The lack of competitive bidding makes a direct, reliable comparison to market rates difficult and suggests the possibility of a price premium.

What is General Mills Inc.'s track record with federal contracts, particularly with the Defense Commissary Agency?

General Mills Inc. has a significant track record of federal contracting, often supplying food products to various government agencies, including the Department of Defense and its sub-agencies like the Defense Commissary Agency (DECA). Their experience spans a wide range of food items, leveraging their extensive manufacturing and distribution capabilities. For DECA specifically, General Mills has likely been a recurring supplier of flour, baking mixes, cereals, and other pantry staples, given their product portfolio and the agency's mission to provide groceries to military personnel. While this particular contract highlights a substantial award, a deeper analysis would involve reviewing the entirety of their federal contract history, including past performance evaluations, any disputes or contract modifications, and the overall value and scope of their previous engagements with DECA and other defense-related entities. Their long-standing presence suggests a generally reliable performance history.

What are the potential risks associated with awarding a large contract for essential goods on a non-competitive basis?

Awarding a large contract for essential goods on a non-competitive basis, as seen with this $32.6 million contract for baking products, carries several potential risks for the government and taxpayers. The primary risk is financial: without competition, the government may pay a higher price than necessary, as the supplier faces less pressure to offer the most competitive rates. This can lead to inefficient use of taxpayer funds. Secondly, there's a risk of reduced innovation or service quality, as the incumbent supplier may have less incentive to improve offerings when faced with no direct competition. Furthermore, non-competitive awards can raise concerns about fairness and transparency in the procurement process. While justifications for sole-source awards exist (e.g., unique capabilities, urgent needs), they must be rigorously documented to ensure they are truly warranted and not simply a matter of convenience or established relationships.

How does this contract align with the Defense Commissary Agency's mission to provide goods at a discount?

This contract aligns with the Defense Commissary Agency's (DECA) mission by ensuring the availability of essential baking products like flour, which are staples for many households. DECA's core objective is to provide military members and their families with groceries at a significant discount compared to civilian retail prices. By procuring these goods, DECA enables commissary patrons to purchase them at lower costs. However, the non-competitive nature of this specific award raises questions about whether the 'discount' passed on to the consumer was maximized. If the procurement price was higher due to limited competition, the potential savings for the end-user might have been less than what could have been achieved through a fully competitive process. Therefore, while the contract fulfills the supply aspect of DECA's mission, the cost-efficiency aspect is less clear without further competitive analysis.

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: $32,648,274

Exercised Options: $32,648,274

Current Obligation: $32,648,274

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline