Defense Commissary Agency awards $24.4M contract for flour and baking products to General Mills Inc

Contract Overview

Contract Amount: $24,422,261 ($24.4M)

Contractor: General Mills Inc

Awarding Agency: Department of Defense

Start Date: 2009-07-01

End Date: 2009-09-30

Contract Duration: 91 days

Daily Burn Rate: $268.4K/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 $24.4 million to GENERAL MILLS INC for work described as: RESALE - FLOUR AND OTHER MISCELLANEOUS BAKING PRODUCTS Key points: 1. Contract awarded on a non-competitive basis, raising questions about price discovery and potential value. 2. Limited competition may have resulted in higher costs compared to a fully competed scenario. 3. The contract duration of 91 days suggests a short-term need, potentially for immediate supply chain support. 4. Awarded by the Defense Commissary Agency, indicating support for military family food services. 5. The specific product category, flour and miscellaneous baking products, points to essential food staples. 6. The firm fixed-price contract type offers cost certainty for the government but limits flexibility.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its non-competitive nature and limited duration. Without comparable bids or market analysis, it's difficult to definitively assess if the $24.4 million represents a fair price for the flour and miscellaneous baking products. The absence of competition suggests potential for overpayment compared to what might be achieved in a more open market. Further analysis would require understanding the specific quantities and quality standards of the products procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' (sole-source) designation. This means that only one vendor, General Mills Inc., was solicited or considered for this award. The lack of competition limits the government's ability to leverage market forces to obtain the best possible pricing and terms. It suggests that either there were no other capable sources, or the circumstances of the procurement did not allow for a competitive process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government could not ensure it received the most cost-effective solution available in the market.

Public Impact

Military families and personnel benefit from the availability of essential baking ingredients through commissaries. The contract ensures a supply of flour and other miscellaneous baking products for commissary operations. The geographic impact is likely widespread, serving military installations where the Defense Commissary Agency operates. The contract supports the food supply chain for military communities, contributing to morale and readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price scrutiny and potential savings.
Short contract duration may indicate reactive procurement rather than strategic planning.
Lack of detailed product specifications makes value assessment difficult.

Positive Signals

Firm fixed-price contract provides budget certainty.
Award to a known entity like General Mills may imply established supply chain reliability.
Ensures availability of essential food items for military personnel and families.

Sector Analysis

The procurement of flour and baking products falls within the broader food manufacturing and distribution sector. This sector is characterized by large-scale production, complex supply chains, and significant competition among major players. Contracts like this, even when sole-sourced, are crucial for ensuring the consistent supply of staple goods to government entities. Comparable spending benchmarks would typically involve analyzing prices for similar commodity goods across different government agencies or commercial entities, considering factors like volume, quality, and delivery terms.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'sb' field being false. Given the award to General Mills Inc., a large corporation, it is unlikely that significant subcontracting opportunities for small businesses were a primary consideration or requirement within this specific award. The focus seems to be on securing a large volume of goods from an established supplier.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Commissary Agency's contracting and financial management departments. Accountability measures would include ensuring delivery of specified products according to the firm fixed-price terms. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the pricing and justification more difficult. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Commissary Agency Operations
Food and Agriculture Procurement
Commodity Goods Contracts
Military Food Services

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 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 $24.4 million.

What is the period of performance?

Start: 2009-07-01. End: 2009-09-30.

What is the historical spending pattern for flour and baking products by the Defense Commissary Agency?

Analyzing historical spending patterns for flour and baking products by the Defense Commissary Agency is crucial for understanding trends, identifying potential cost efficiencies, and assessing the reasonableness of current contract values. Without access to specific historical data for this contract or similar procurements, a precise analysis is not possible. However, generally, agencies like the Defense Commissary Agency procure such goods regularly to support military commissaries. Fluctuations in spending can be attributed to changes in demand, market price volatility for raw ingredients (like wheat), contract vehicle changes, and shifts in procurement strategies (e.g., moving towards or away from sole-source awards). A comprehensive review would involve examining contract awards over several fiscal years, noting quantities, unit prices, and the competitive nature of each award to identify any significant deviations or consistent patterns.

How does the unit cost of flour and baking products in this contract compare to commercial market rates?

Directly comparing the unit cost of flour and baking products in this $24.4 million contract to commercial market rates is difficult without specific details on the exact products, quantities, and quality specifications. This contract is also sole-sourced, which inherently limits the potential for competitive pricing that often aligns with or beats commercial rates. Commercial market rates are influenced by factors such as volume discounts, regional pricing, and the specific supplier's operational costs and profit margins. Given the non-competitive nature of this award, it is plausible that the unit costs may be higher than what could be achieved through a competitive bidding process or through large commercial wholesale purchases. A thorough comparison would require detailed product specifications and access to current commercial pricing data for similar bulk purchases.

What are the specific risks associated with a sole-source award for essential food supplies?

Sole-source awards for essential food supplies, such as flour and baking products, carry several risks. Primarily, the lack of competition can lead to inflated prices, meaning taxpayers may overpay for these goods. This reduces the overall value for money. Secondly, it can stifle innovation and reduce the incentive for suppliers to offer competitive terms or explore cost-saving measures, as they face no direct market pressure. There's also a risk of complacency in quality or service delivery, as the incumbent contractor may feel less pressure to perform at peak levels when there's no threat of losing the contract to a competitor. Furthermore, sole-source awards can create a perception of favoritism or lack of transparency, potentially eroding public trust in the procurement process. Ensuring adequate justification and oversight is critical to mitigate these risks.

What is General Mills Inc.'s track record with government contracts, particularly for food supplies?

General Mills Inc. is a major food manufacturer with a significant presence in both commercial and government markets. While specific details on all their government contracts are not readily available in this dataset, large food corporations like General Mills frequently supply goods to various government agencies, including the Department of Defense through entities like the Defense Commissary Agency. Their track record typically involves supplying a wide range of food products, from staples like flour to branded consumer goods. Government contracts awarded to such large entities are often substantial in value and may be awarded through both competitive and non-competitive processes, depending on the specific circumstances and product needs. Assessing their overall track record would involve reviewing past performance evaluations, any disputes or contract terminations, and the volume and type of contracts they have secured over time.

How does the duration of this contract (91 days) impact the overall value and risk assessment?

The short duration of this contract (91 days, approximately three months) suggests a short-term or immediate need for flour and other miscellaneous baking products. This impacts the value assessment in several ways. For the government, it offers flexibility to re-evaluate needs and market conditions after the period, potentially allowing for renegotiation or a shift to a competitive contract if market conditions change. However, it also means that the administrative costs associated with contract award and management are incurred over a shorter period, potentially making the per-day cost higher than for a longer-term contract. From a risk perspective, a short duration can mitigate risks associated with long-term price volatility or supplier performance issues. However, it might also indicate a lack of strategic planning or an inability to secure a longer-term, potentially more cost-effective, supply agreement.

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: $24,422,261

Exercised Options: $24,422,261

Current Obligation: $24,422,261

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0109G3837

IDV Type: IDC

Timeline