DoD's $117M MRE contract awarded to AmeriQual Group LLC shows fair value despite limited competition

Contract Overview

Contract Amount: $117,287,636 ($117.3M)

Contractor: Ameriqual Group LLC

Awarding Agency: Department of Defense

Start Date: 2022-10-26

End Date: 2023-12-31

Contract Duration: 431 days

Daily Burn Rate: $272.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8509487175!MEAL, READY-TO-EAT, IND,

Place of Performance

Location: EVANSVILLE, VANDERBURGH County, INDIANA, 47710

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $117.3 million to AMERIQUAL GROUP LLC for work described as: 8509487175!MEAL, READY-TO-EAT, IND, Key points: 1. The contract's value appears reasonable when benchmarked against similar food service contracts. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. Performance risk appears low given the contractor's experience and contract type. 4. This contract supports the DoD's logistical needs for operational readiness. 5. The award falls within the broader Defense sector's spending on sustainment and operational support. 6. The fixed-price nature of the contract shifts performance risk to the contractor.

Value Assessment

Rating: good

The awarded value of $117.3 million for MREs appears to be within a reasonable range when compared to historical data for similar food service contracts. The firm fixed-price structure provides cost certainty for the government. While specific per-unit cost benchmarks are not readily available without more granular data, the overall contract value seems to reflect market conditions for bulk food procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. The specific reasons for exclusion are not detailed, but this approach can sometimes limit the number of responsive bidders. The limited number of bidders may have influenced the final pricing, potentially leading to a less competitive outcome than a truly open competition.

Taxpayer Impact: Limited competition can mean that taxpayers may not have received the lowest possible price, as the pool of potential bidders was restricted. This could result in a higher overall cost compared to a scenario with broader participation.

Public Impact

Service members deployed domestically and internationally benefit from consistent access to MREs. The contract ensures the availability of essential nutritional support for military personnel. The primary geographic impact is on military installations and operational theaters where U.S. forces are stationed. This contract supports jobs within the food manufacturing and logistics sectors, particularly at AmeriQual Group LLC's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price optimization for taxpayers.
Lack of detailed justification for source exclusion raises transparency concerns.
Reliance on a single primary contractor for a critical supply could pose future risk if performance falters.

Positive Signals

Firm fixed-price contract provides cost certainty and shifts risk to the contractor.
Contract supports essential operational readiness for military personnel.
AmeriQual Group LLC has a track record in supplying MREs, suggesting operational capability.

Sector Analysis

This contract falls within the broader food manufacturing and defense logistics sector. The market for military rations is specialized, with a few key players capable of meeting stringent DoD requirements. Spending in this area is driven by operational tempo and global force posture. Comparable spending benchmarks would include other large-scale food service contracts awarded by government agencies or large institutional buyers.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'small business set-aside' flag is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary awardee is expected to fulfill the contract requirements directly, potentially limiting opportunities for small businesses within the supply chain for this particular procurement.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Logistics Agency (DLA), which is responsible for procurement and supply chain management for the DoD. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract award databases, though specific performance metrics and detailed justifications for competition exclusions may not be publicly available.

Related Government Programs

Military Rations Procurement
Defense Logistics Agency Contracts
Food Service Contracts
Operational Sustainment Contracts

Risk Flags

Limited Competition
Potential for Higher Costs
Supply Chain Vulnerability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.3 million to AMERIQUAL GROUP LLC. 8509487175!MEAL, READY-TO-EAT, IND,

Who is the contractor on this award?

The obligated recipient is AMERIQUAL GROUP LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $117.3 million.

What is the period of performance?

Start: 2022-10-26. End: 2023-12-31.

What is AmeriQual Group LLC's track record with DoD MRE contracts?

AmeriQual Group LLC has a history of supplying Meal, Ready-to-Eat (MRE) components and complete meals to the Department of Defense. They have been a significant contractor in this space, often competing for and winning large-scale contracts for ration production. Their experience includes meeting the rigorous quality, safety, and logistical requirements necessary for military food service. This specific contract, valued at approximately $117 million, builds upon their established relationship with the Defense Logistics Agency (DLA) and demonstrates their continued capability to fulfill these critical sustainment needs.

How does the $117.3 million contract value compare to similar MRE procurements?

Benchmarking the $117.3 million contract value requires comparing it against historical awards for similar MRE procurements by the DoD, particularly those managed by the Defense Logistics Agency (DLA). While exact per-unit costs are not provided, the total value suggests a significant volume of MREs. Factors influencing this value include the specific types of MREs procured (e.g., standard, Halal, Kosher), packaging requirements, delivery schedules, and the overall market demand at the time of award. Generally, large-scale, multi-year contracts for essential supplies like MREs represent substantial investments, and this award appears consistent with the scale of such procurements necessary to maintain operational readiness.

What are the primary risks associated with this MRE contract?

The primary risks associated with this MRE contract include potential supply chain disruptions (e.g., ingredient shortages, transportation issues), quality control failures leading to non-compliant rations, and contractor performance issues (e.g., delivery delays). Given the 'limited' competition noted, there's also a risk that the government did not secure the most cost-effective pricing. Furthermore, reliance on a single primary contractor for a critical supply like MREs could pose a risk if the contractor faces significant operational challenges or financial instability, although the firm fixed-price nature mitigates cost overrun risks for the government.

How effective is this contract in ensuring military operational readiness?

This contract is likely highly effective in ensuring military operational readiness by providing a consistent and reliable supply of MREs. MREs are a critical component of soldier sustainment, particularly during field operations, deployments, and contingency responses where traditional food services are unavailable. By securing a substantial quantity of MREs through a firm fixed-price contract, the DoD ensures that service members have access to necessary nutrition, supporting their ability to perform missions effectively. The duration of the contract (ending December 2023) suggests it addresses a sustained need.

What are the historical spending patterns for MREs by the DoD?

Historical spending patterns for MREs by the DoD, primarily through the Defense Logistics Agency (DLA), show consistent and significant investment in ration procurement. Annual spending can fluctuate based on global operational tempo, force size, and specific strategic needs. Over the past decade, the DoD has consistently awarded contracts in the hundreds of millions of dollars for MREs and other ration types. This $117.3 million award represents a portion of that ongoing, substantial expenditure aimed at maintaining adequate stockpiles and ensuring logistical support for military personnel worldwide.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply for this contract?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the contract was initially intended to be competed broadly, but specific sources were subsequently excluded from consideration. This is distinct from a sole-source award, as multiple bidders could still participate. However, the exclusion of certain potential offerors limits the scope of competition. The reasons for such exclusions are typically based on specific technical requirements, past performance issues, or other criteria outlined in the solicitation. This approach can sometimes be used to ensure specialized capabilities are met but may reduce the number of bidders and potentially impact price competitiveness compared to a completely unrestricted competition.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Fruit and Vegetable Canning

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ameriqual Group Holdings LLC

Address: 225 W MORGAN AVE STE C, EVANSVILLE, IN, 47710

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $117,287,636

Exercised Options: $117,287,636

Current Obligation: $117,287,636

Actual Outlays: $88,857,417

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE3S122DZ145

IDV Type: IDC

Timeline