DoD's $16.7M Chilled Meats Contract with Tyson Foods Raises Questions on Competition and Value
Contract Overview
Contract Amount: $16,774,813 ($16.8M)
Contractor: Tyson Foods Inc.
Awarding Agency: Department of Defense
Start Date: 2009-07-01
End Date: 2009-09-30
Contract Duration: 91 days
Daily Burn Rate: $184.3K/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 $16.8 million to TYSON FOODS INC. for work described as: RESALE - CHILLED MEATS Key points: 1. The contract awarded to Tyson Foods Inc. for chilled meats represents a significant expenditure. 2. Lack of competition is a major concern, potentially leading to inflated prices. 3. The firm fixed price contract offers some cost certainty but may not reflect market best prices. 4. Analysis of the sector suggests potential for greater competition and cost savings.
Value Assessment
Rating: questionable
The contract value of $16.7M for a 91-day period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar bulk meat purchases by other agencies or private entities.
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 may prevent the government from securing the most favorable terms.
Taxpayer Impact: The lack of competition likely results in higher costs for taxpayers, as market pressures that drive down prices are absent.
Public Impact
Taxpayers may be overpaying for essential food supplies due to a lack of competitive bidding. The Department of Defense's reliance on a single vendor for critical food items raises supply chain vulnerability concerns. Transparency in government procurement processes is crucial for public trust and efficient use of funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Limited Transparency
Positive Signals
- Firm Fixed Price Contract
Sector Analysis
The procurement falls under general line grocery merchant wholesalers, a sector where competitive bidding is typically robust. The value is significant for a short-term delivery order, suggesting substantial volume.
Small Business Impact
The data does not indicate any specific provisions or considerations for small business participation in this contract.
Oversight & Accountability
The limited competition and lack of transparency raise concerns about the effectiveness of oversight mechanisms in ensuring the best value for taxpayer dollars.
Related Government Programs
- General Line Grocery Merchant Wholesalers
- Department of Defense Contracting
- Defense Commissary Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in award justification
- Single vendor reliance for a critical commodity
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 $16.8 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 $16.8 million.
What is the period of performance?
Start: 2009-07-01. End: 2009-09-30.
What was the justification for not competing this contract, and what steps were taken to ensure a fair and reasonable price was negotiated?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' Without further documentation, the specific justification remains unclear. Agencies typically cite reasons like urgency, lack of available sources, or unique capabilities. However, for a commodity like chilled meats, a lack of competition is unusual and warrants scrutiny to ensure fair pricing was achieved through negotiation or benchmark analysis.
How does the per-unit cost of these chilled meats compare to market rates or other government contracts for similar products?
The data does not provide per-unit cost information, making a direct comparison difficult. The total contract value of $16.7M over 91 days suggests a significant volume. Benchmarking against industry prices for bulk chilled meats or other DoD commissary contracts would be necessary to assess cost-effectiveness. The absence of competition makes this benchmark analysis even more critical.
What is the potential impact on food supply chain resilience if a single vendor like Tyson Foods is relied upon for such a large volume of chilled meats?
Relying on a single vendor for a substantial portion of chilled meat supply can create supply chain vulnerabilities. Disruptions at Tyson Foods, whether due to operational issues, natural disasters, or labor disputes, could significantly impact the Department of Defense's ability to procure these essential items. Diversifying suppliers, even within limited competition scenarios, can enhance overall resilience.
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: $16,774,813
Exercised Options: $16,774,813
Current Obligation: $16,774,813
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HDEC0105G3222
IDV Type: IDC
Timeline
Start Date: 2009-07-01
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2019-06-07
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