DoD's $17.3M Contract for Food Supplies Awarded to US Foods Inc. Amidst Firm Fixed Price Structure

Contract Overview

Contract Amount: $17,337,020 ($17.3M)

Contractor: US Foods Inc

Awarding Agency: Department of Defense

Start Date: 2019-10-01

End Date: 2024-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONSUMABLE SUBSISTENCE COMMODITIES AND SUPPLIES

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20889

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to US FOODS INC for work described as: CONSUMABLE SUBSISTENCE COMMODITIES AND SUPPLIES Key points: 1. Significant contract value of $17.3 million for consumable subsistence commodities. 2. US Foods Inc. is the sole awardee, raising questions about competition. 3. The contract spans nearly five years, indicating a long-term need. 4. The 'All Other Miscellaneous Food Manufacturing' NAICS code suggests a broad scope of supplies.

Value Assessment

Rating: fair

The contract is awarded under a Firm Fixed Price (FFP) structure, which generally provides cost certainty for the government. However, without detailed cost breakdowns or benchmarks for 'consumable subsistence commodities and supplies,' a precise value assessment is difficult. The award amount of $17.3M over 5 years needs comparison to similar large-scale food service contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' suggesting multiple vendors had the opportunity to bid. However, only US Foods Inc. is listed as the awardee. Further investigation is needed to confirm if other bids were received and why only one award was made.

Taxpayer Impact: The use of Firm Fixed Price and Full and Open Competition aims to ensure taxpayer funds are used efficiently. However, the lack of multiple awardees could potentially limit price discovery and savings.

Public Impact

Ensures consistent supply of essential food items to military personnel and facilities. Supports the Defense Health Agency's operational readiness and healthcare services. Impacts the food supply chain and potentially local economies where US Foods operates.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency on other bidders in a 'Full and Open' competition.
Potential for price escalation over the 5-year contract term.
Broad NAICS code may obscure specific commodity costs.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Long-term contract ensures supply chain stability for essential goods.
Awarded to a known entity, potentially leveraging existing distribution networks.

Sector Analysis

This contract falls under the broad category of food services and supply chain management, a critical component of government operations. Spending in this sector is generally stable, driven by consistent demand for subsistence. Benchmarks would typically compare per-unit costs for common food items across government agencies.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The award to US Foods Inc., a large corporation, suggests that small businesses may not have been primary awardees or subcontractors on this specific contract, despite the 'Full and Open' competition.

Oversight & Accountability

The contract's duration and value warrant regular oversight to ensure compliance with terms, quality standards, and pricing. The Defense Contract Audit Agency (DCAA) or equivalent may be involved in auditing costs if necessary, particularly if contract modifications occur.

Related Government Programs

All Other Miscellaneous Food Manufacturing
Department of Defense Contracting
Defense Health Agency Programs

Risk Flags

Potential lack of robust competition despite 'Full and Open' designation.
Long contract duration increases exposure to market price fluctuations.
Broad NAICS code hinders detailed cost analysis.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to US FOODS INC. CONSUMABLE SUBSISTENCE COMMODITIES AND SUPPLIES

Who is the contractor on this award?

The obligated recipient is US FOODS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2019-10-01. End: 2024-09-30.

What was the competitive landscape like for this 'Full and Open' solicitation, and were there specific reasons why only one award was made?

While listed as 'Full and Open Competition,' the single award to US Foods Inc. raises questions. It's possible that only one bid met all the technical and financial requirements, or that the solicitation was structured in a way that favored a large, established supplier. Further review of the solicitation documents and award justification would be needed to fully understand the competitive dynamics and the rationale behind the single award.

How does the per-unit cost of these 'consumable subsistence commodities and supplies' compare to industry benchmarks or other government contracts for similar items?

Without specific line-item details on the commodities purchased, a direct per-unit cost comparison is challenging. The 'All Other Miscellaneous Food Manufacturing' NAICS code is very broad. To assess value, one would need to analyze the pricing of specific high-volume items (e.g., staple goods, MRE components) against GSA schedules, other agency contracts, or commercial pricing data to identify potential overpricing or cost savings.

What is the potential risk of supply chain disruption or quality issues given the long-term nature of the contract and the single awardee?

A single awardee for a five-year contract carries inherent risks. Supply chain disruptions could occur due to the contractor's internal issues, natural disasters affecting distribution, or geopolitical events impacting food sourcing. Quality control is paramount; the Defense Health Agency must have robust inspection and acceptance procedures in place to ensure the subsistence commodities meet all required standards and specifications throughout the contract's duration.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT001419R0015

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: US Foods Holding Corp.

Address: 9399 W HIGGINS RD STE 500, ROSEMONT, IL, 60018

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,337,020

Exercised Options: $17,337,020

Current Obligation: $17,337,020

Actual Outlays: $1,383,752

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79719D0001

IDV Type: IDC

Timeline