DoD awards $28.6M contract for food and medical supplies to US Foods Inc

Contract Overview

Contract Amount: $28,584,250 ($28.6M)

Contractor: US Foods Inc

Awarding Agency: Department of Defense

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $78.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SUBSISTENCE (FOOD ITEMS), NON-SUBSISTENCE (NON-FOOD SUPPLIES), AND SUPPLEMENTS FOR VARIOUS DEFENSE HEALTH AGENCY MEDICAL TREATMENT FACILITIES.

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $28.6 million to US FOODS INC for work described as: SUBSISTENCE (FOOD ITEMS), NON-SUBSISTENCE (NON-FOOD SUPPLIES), AND SUPPLEMENTS FOR VARIOUS DEFENSE HEALTH AGENCY MEDICAL TREATMENT FACILITIES. Key points: 1. Contract focuses on providing essential food and medical supplies to Defense Health Agency facilities. 2. Full and open competition was utilized, suggesting a potentially competitive bidding process. 3. The contract is a delivery order, indicating it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The contract duration is one year, with a potential for renewal. 5. The primary contractor, US Foods Inc., is a large, established food service distributor. 6. The contract value is significant, reflecting the scale of medical facility operations.

Value Assessment

Rating: good

The contract value of $28.6 million for a one-year period for subsistence and non-subsistence items appears reasonable given the scope of supporting multiple Defense Health Agency medical treatment facilities. Benchmarking against similar contracts for food and medical supply provision to large government institutions would provide a more precise value-for-money assessment. However, the firm-fixed-price structure helps control costs for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but this method generally encourages a competitive environment, which can lead to better pricing and terms for the government. The use of this procurement method suggests that the agency sought to maximize competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through a wider range of offers, ensuring the government receives the best value for its spending.

Public Impact

Service members and their families receiving care at DHA facilities will benefit from the consistent availability of necessary food and medical supplies. The contract ensures the operational readiness of various medical treatment facilities within the Defense Health Agency. The primary geographic impact is within Texas, where the contractor is based, but the supplies will be distributed to DHA facilities. This contract supports the supply chain and logistics workforce involved in the distribution of food and medical items.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations if market conditions for food and medical supplies change significantly during the contract period.
Reliance on a single large distributor could present supply chain risks if the contractor faces operational disruptions.
Ensuring consistent quality and timely delivery across all supported facilities requires robust oversight.

Positive Signals

The use of full and open competition suggests a competitive pricing environment was sought.
The firm-fixed-price contract type provides cost certainty for the government.
US Foods Inc. is a large, experienced provider with established distribution networks, indicating a lower risk of delivery failure.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically serving the government's healthcare and defense needs. The market for supplying food and medical essentials to large institutions is competitive, with major distributors vying for such contracts. The Defense Health Agency represents a significant customer base within this sector, requiring reliable and large-scale supply chain management.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting opportunities for small businesses. As a large contract awarded to a major distributor, the primary focus is likely on the prime contractor's capabilities. Further investigation would be needed to determine if any small business subcontracting plans are in place.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Health Agency contracting officers and quality assurance personnel. They will be responsible for monitoring performance, ensuring compliance with contract terms, and verifying the quality and timeliness of deliveries. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight, but performance monitoring remains critical.

Related Government Programs

Defense Health Agency Medical Supplies
Federal Food Procurement
Medical Treatment Facility Support Contracts
General Services Administration (GSA) Schedules (potential for related items)

Risk Flags

Potential for supply chain disruption
Contractor performance risk
Price volatility of goods

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.6 million to US FOODS INC. SUBSISTENCE (FOOD ITEMS), NON-SUBSISTENCE (NON-FOOD SUPPLIES), AND SUPPLEMENTS FOR VARIOUS DEFENSE HEALTH AGENCY MEDICAL TREATMENT FACILITIES.

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 $28.6 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

What is the historical spending pattern for subsistence and non-subsistence items by the Defense Health Agency?

Analyzing historical spending patterns for the Defense Health Agency (DHA) on subsistence and non-subsistence items is crucial for understanding long-term trends and budget allocation. While specific historical data for this exact contract is not provided, the DHA consistently procures a wide range of supplies to support its global network of medical facilities. Past spending would likely show significant investment in food, pharmaceuticals, medical equipment, and general supplies. Trends might indicate shifts in demand based on operational needs, changes in healthcare services offered, or fluctuations in market prices. Comparing current contract values to previous years can reveal whether spending is increasing, decreasing, or remaining stable, and whether this reflects changes in service volume or efficiency improvements. Understanding these patterns helps in forecasting future needs and identifying potential areas for cost savings or optimization.

How does the awarded price compare to similar contracts for food and medical supplies for other federal agencies or military branches?

Comparing the awarded price of $28.6 million for this Defense Health Agency (DHA) contract to similar contracts across federal agencies requires access to a broader dataset of government procurements. However, general benchmarks can be inferred. Contracts for large-scale food and medical supply distribution to institutional settings, such as hospitals or military bases, often involve significant dollar values. The price per unit or per facility served is a key metric for comparison. If other agencies procure similar volumes of goods from large distributors under firm-fixed-price contracts, the pricing structures might be comparable. Factors like geographic location, specific product mix (e.g., specialized medical equipment vs. general food items), and the level of competition in the bidding process can cause variations. A higher price might be justified by unique logistical challenges or specialized requirements, while a lower price could indicate strong competition or economies of scale.

What are the potential risks associated with relying on a single large distributor like US Foods Inc. for critical medical facility supplies?

Relying on a single large distributor like US Foods Inc. for critical medical facility supplies presents several potential risks. Firstly, supply chain disruptions, whether due to natural disasters, labor strikes, transportation issues, or the contractor's own operational problems, could lead to shortages of essential food and medical items, impacting patient care and facility operations. Secondly, a lack of direct competition for subsequent delivery orders under an IDIQ contract could potentially lead to less favorable pricing over time if not managed carefully through contract modifications or re-competition. Thirdly, the sheer scale of the operation means that any quality control issues or compliance failures by the contractor could have a widespread impact across multiple facilities. Robust contract management, contingency planning, and clear performance metrics are essential to mitigate these risks.

What is the track record of US Foods Inc. in fulfilling government contracts, particularly for the Department of Defense or Health agencies?

US Foods Inc. is a major food service distributor with extensive experience serving various sectors, including government and institutional clients. While specific details on their performance for this particular Defense Health Agency (DHA) contract are not yet available as it is newly awarded, their history with government contracts is generally characterized by large-scale distribution capabilities. Companies of this size often hold numerous contracts with federal, state, and local governments. Performance can vary, but typically, large distributors have established systems for logistics, inventory management, and compliance. It would be prudent to review past performance evaluations and any reported issues or successes on similar government contracts to assess their reliability and adherence to contractual obligations. Their established presence suggests a capacity to handle significant volume and complexity.

How does the firm-fixed-price contract type influence cost control and risk allocation for this DHA supply contract?

The firm-fixed-price (FFP) contract type is a key element in managing costs and allocating risk for this Defense Health Agency (DHA) supply contract. Under an FFP agreement, the contractor, US Foods Inc., is obligated to provide the specified goods and services for a predetermined price, regardless of their actual costs incurred. This provides the government with significant cost certainty, as the total expenditure is fixed upfront. The primary financial risk is borne by the contractor; if their costs exceed the agreed-upon price, their profit margin decreases or they may incur a loss. Conversely, if their costs are lower than anticipated, their profit increases. This structure incentivizes the contractor to manage their own costs efficiently and to deliver the supplies within budget. For the DHA, this means predictable budgeting and protection against cost overruns, assuming the initial price was set competitively.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: US Foods Holding Corp.

Address: 9399 W HIGGINS RD, 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: $28,584,250

Exercised Options: $28,584,250

Current Obligation: $28,584,250

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79723D0001

IDV Type: IDC

Timeline