DoD's $21M grocery contract with General Mills Inc. awarded via non-competitive means

Contract Overview

Contract Amount: $21,071,566 ($21.1M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2008-02-01

End Date: 2008-03-31

Contract Duration: 59 days

Daily Burn Rate: $357.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Other

Official Description: RESALE - DRY GROCERY

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55426

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to GENERAL MILLS INC for work described as: RESALE - DRY GROCERY Key points: 1. Value for money is difficult to assess due to the lack of competitive bidding. 2. Competition dynamics show a sole-source award, limiting price discovery. 3. Risk indicators include potential overpayment and lack of market pressure. 4. Performance context is limited to a single delivery order. 5. Sector positioning is within wholesale grocery distribution for military commissaries.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark without competitive data. As a sole-source award, there's no direct comparison to market rates or other bids. The fixed-price nature provides some cost certainty, but the absence of competition raises concerns about whether the government secured the best possible price for these dry grocery items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Mills Inc., was solicited. The justification for this approach is not provided in the data. The lack of competition means there were no other bidders to compare against, potentially leading to a higher price than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, which typically drives down costs.

Public Impact

Military personnel and their families benefit from the availability of dry grocery items. Services delivered include the wholesale distribution of general line groceries. Geographic impact is likely focused on military installations served by the Defense Commissary Agency. Workforce implications are minimal for this specific contract, primarily affecting the logistics and distribution chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of transparency in the justification for non-competitive award.
Limited performance data available for this single delivery order.

Positive Signals

Ensures supply of essential grocery items to military communities.
General Mills Inc. is an established supplier, suggesting potential reliability.

Sector Analysis

The contract falls within the wholesale trade sector, specifically for grocery merchants. The Defense Commissary Agency (DeCA) procures a wide range of food and household items to support military families worldwide. Spending in this category is substantial, with numerous contracts awarded annually to various suppliers to ensure a diverse and readily available stock. This specific award represents a portion of the overall grocery procurement budget.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to General Mills Inc., a large corporation. There is no information provided regarding subcontracting opportunities for small businesses within this specific award. The focus is on direct procurement from a major supplier.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's procurement and quality assurance functions. Accountability measures would be tied to the terms of the fixed-price delivery order, ensuring timely delivery of specified goods. Transparency is limited due to the sole-source nature of the award.

Related Government Programs

Defense Commissary Agency Operations
Military Food and Beverage Procurement
Wholesale Grocery Distribution Contracts

Risk Flags

Sole-source award
Lack of competition
Limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to GENERAL MILLS INC. RESALE - DRY GROCERY

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 $21.1 million.

What is the period of performance?

Start: 2008-02-01. End: 2008-03-31.

What is the track record of General Mills Inc. in fulfilling government contracts, particularly with the Defense Commissary Agency?

General Mills Inc. has a history of supplying goods to various government entities, including the Defense Commissary Agency (DeCA). While this specific data point represents a single delivery order from 2008, the company's long-standing presence in the food industry suggests a capacity to meet large-scale supply demands. However, a comprehensive assessment would require analyzing a broader range of their federal contracts, including performance ratings, past issues, and the volume and types of goods supplied across different agencies and time periods. Without more extensive data, it's difficult to definitively characterize their overall track record beyond their established market position.

How does the pricing of this contract compare to similar grocery procurements by the DoD or other federal agencies?

Direct price comparison for this specific contract is challenging due to its sole-source nature and the lack of detailed pricing breakdowns. Typically, competitive solicitations allow for benchmarking against multiple bids, revealing market-driven prices. For sole-source awards, comparisons would rely on historical pricing for similar items, pricing from other agencies procuring comparable goods, or established catalog prices. Given that this was a single delivery order in 2008, current market rates or prices from more recent, competitively awarded contracts would not be directly analogous. The absence of competitive data makes it difficult to ascertain if the $21 million represented optimal value for money.

What are the primary risks associated with awarding a large contract like this on a sole-source basis?

The primary risks associated with sole-source awards include a lack of price competition, which can lead to inflated costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or offer the most efficient solutions, as they face no direct market pressure from competitors. Furthermore, sole-source awards can limit opportunities for other capable businesses, including small businesses, to enter the market or secure contracts. Transparency can also be an issue, as the justification for bypassing competition may not always be fully transparent or robust, potentially masking inefficiencies or suboptimal decision-making.

How effective is the Defense Commissary Agency in ensuring value for money when awarding contracts, especially non-competitively?

The Defense Commissary Agency (DeCA) generally aims to ensure value for money through various procurement strategies, including competitive bidding where feasible. However, the effectiveness of value for money in non-competitive awards, like this one, is inherently limited. While DeCA may have internal mechanisms to review pricing and ensure reasonableness, the absence of competing offers means they cannot leverage market forces to drive down costs. Their effectiveness in such cases relies heavily on the accuracy of their price analysis, negotiation skills, and the justification provided for the sole-source award. Oversight bodies and audits play a crucial role in scrutinizing these decisions to ensure taxpayer funds are used appropriately.

What has been the historical spending trend for wholesale grocery distribution by the Defense Commissary Agency?

Historical spending data for wholesale grocery distribution by the Defense Commissary Agency (DeCA) would likely show a consistent and significant expenditure, reflecting the ongoing need to supply commissaries worldwide. This spending fluctuates based on factors such as the number of military installations served, the size of the military population, and the types of goods procured. While this specific $21 million contract is a snapshot from 2008, DeCA's overall budget for commissary operations involves substantial sums dedicated to food and household goods procurement annually. Analyzing trends would require examining multi-year spending reports to identify patterns in contract values, types of awards (competitive vs. sole-source), and major suppliers.

Industry Classification

NAICS: Wholesale Trade › Grocery and Related Product Merchant Wholesalers › General Line Grocery Merchant Wholesalers

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 GENERAL MILLS BLVD, MINNEAPOLIS, MN, 55426

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,000,000

Exercised Options: $21,071,566

Current Obligation: $21,071,566

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0104G3048

IDV Type: IDC

Timeline