DoD's $15.4M Frozen Chicken Purchase from Tyson Foods Raises Questions on Competition and Value
Contract Overview
Contract Amount: $15,447,174 ($15.4M)
Contractor: Tyson Foods Inc.
Awarding Agency: Department of Defense
Start Date: 2009-04-01
End Date: 2009-06-30
Contract Duration: 90 days
Daily Burn Rate: $171.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RESALE - ASSORTED FROZEN CHICKEN (SECTION A)
Place of Performance
Location: SPRINGDALE, WASHINGTON County, ARKANSAS, 72762
State: Arkansas Government Spending
Plain-Language Summary
Department of Defense obligated $15.4 million to TYSON FOODS INC. for work described as: RESALE - ASSORTED FROZEN CHICKEN (SECTION A) Key points: 1. Significant spending on frozen chicken products by the Defense Commissary Agency. 2. Sole reliance on Tyson Foods Inc. for this procurement. 3. Potential for higher costs due to lack of competitive bidding. 4. Frozen chicken falls under the broad 'General Line Grocery Merchant Wholesalers' NAICS code.
Value Assessment
Rating: questionable
The contract value of $15.4 million for frozen chicken is substantial. Without competitive pricing data or benchmarks for similar commissary purchases, it's difficult to definitively assess value. The firm fixed-price contract type offers some cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not available for competition, indicating a sole-source award. This significantly limits price discovery and may lead to inflated costs for taxpayers as there was no opportunity for multiple vendors to bid.
Taxpayer Impact: The lack of competition in this sole-source award likely results in higher prices paid by taxpayers for essential food supplies.
Public Impact
Military families and personnel rely on commissary services for groceries, including items like frozen chicken. The cost of goods sold in commissaries impacts the overall budget allocated to support military members and their families. This procurement highlights potential inefficiencies in the supply chain for commissary goods.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for overpayment
Positive Signals
- Firm fixed-price contract
- Supports military food supply
Sector Analysis
The Defense Commissary Agency procures a wide range of food products to support military personnel and their families. Spending benchmarks for frozen chicken within this sector are not readily available, but competition is typically expected for such staple goods.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Sole-source awards often bypass opportunities for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the government received fair pricing and that competition was appropriately considered or justified.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competitive bidding
- Sole-source award justification unclear
- Potential for inflated pricing
- Limited transparency on value for money
Tags
general-line-grocery-merchant-wholesaler, department-of-defense, ar, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.4 million to TYSON FOODS INC.. RESALE - ASSORTED FROZEN CHICKEN (SECTION A)
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 $15.4 million.
What is the period of performance?
Start: 2009-04-01. End: 2009-06-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies explored?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source justification was made. Without access to the specific justification documentation, it's impossible to know the exact reasons or if alternative competitive strategies were explored. Typically, sole-source awards are reserved for situations where only one responsible source can fulfill the requirement, which would need to be rigorously documented.
How does the per-unit cost of this frozen chicken purchase compare to market rates or similar government contracts?
The provided data does not include per-unit cost information, making a direct comparison impossible. To assess value, one would need to analyze the total contract value against the quantity of chicken purchased and compare this to industry benchmarks or prices paid by other agencies for similar products. The lack of competition further complicates this assessment.
What is the potential impact on food quality and variety for commissary patrons due to this sole-source award?
A sole-source award can limit the variety of products available if the sole provider does not offer a diverse range or if other vendors are excluded from bidding. While Tyson Foods is a major supplier, the absence of competition might mean commissary patrons receive a less diverse selection of frozen chicken products than might be available through a competitive process. Quality is generally maintained by contract specifications, but competition often drives innovation and higher quality standards.
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2210 W OAKLAWN DR, SPRINGDALE, AR, 72762
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $15,447,174
Exercised Options: $15,447,174
Current Obligation: $15,447,174
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0105G3221
IDV Type: IDC
Timeline
Start Date: 2009-04-01
Current End Date: 2009-06-30
Potential End Date: 2009-06-30 00:00:00
Last Modified: 2019-06-07
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