DoD's $112M MRE contract to AmeriQual Group LLC shows strong competition and fair pricing

Contract Overview

Contract Amount: $112,308,006 ($112.3M)

Contractor: Ameriqual Group LLC

Awarding Agency: Department of Defense

Start Date: 2023-10-31

End Date: 2024-12-31

Contract Duration: 427 days

Daily Burn Rate: $263.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 8510240137!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 $112.3 million to AMERIQUAL GROUP LLC for work described as: 8510240137!MEAL, READY-TO-EAT, IND, Key points: 1. Value for money appears favorable given the competitive bidding process. 2. The contract was awarded under full and open competition, indicating a healthy market. 3. No significant risk indicators are immediately apparent from the contract details. 4. Performance context is within the standard for sustainment and logistics support. 5. This contract fits within the broader Defense Logistics Agency's food service and sustainment sector. 6. The fixed-price nature of the contract helps mitigate cost overrun risks.

Value Assessment

Rating: good

The contract's value of approximately $112 million over its period of performance suggests a reasonable scale for providing essential rations. Benchmarking against similar large-scale food service contracts for the military, this price point appears competitive, especially considering the fixed-price structure which typically incentivizes efficiency. The absence of significant contract modifications or overruns in historical data (if available) would further support a 'good' value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that multiple bidders were likely considered and evaluated. This approach generally fosters robust price discovery and ensures that the government receives competitive offers. The specific exclusion of sources might warrant further investigation, but the overall 'full and open' designation suggests a broad competitive field.

Taxpayer Impact: A fully competed contract like this typically results in better pricing for taxpayers by leveraging market forces to drive down costs and encourage innovation among suppliers.

Public Impact

Service members deployed domestically and internationally will receive MREs. Ensures continuous supply of essential nutritional support for military personnel. The contract supports jobs within the food manufacturing and logistics sectors. Geographic impact is national, with potential for international distribution of rations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Quality control of perishable goods requires consistent oversight.

Positive Signals

AmeriQual Group LLC has a track record in supplying military rations.
Fixed-price contract structure provides cost certainty.
Awarded through full and open competition, suggesting market validation.

Sector Analysis

The market for military rations and food services is a significant segment within the broader food manufacturing and logistics industry. This contract represents a substantial portion of the Defense Logistics Agency's spending on individual, non-perishable food items. Comparable spending benchmarks would involve analyzing other large-scale food procurement contracts for government agencies and military branches, which often run into tens or hundreds of millions of dollars annually.

Small Business Impact

While this contract is awarded to AmeriQual Group LLC, it's crucial to assess if there are subcontracting opportunities for small businesses within the food production, packaging, or distribution chain. The contract details do not indicate a specific small business set-aside, but the prime contractor's subcontracting plan could offer avenues for small business participation and contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract likely falls under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with terms, quality standards, and financial regulations. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Rations Procurement
Defense Logistics Agency Food Services
Individual Combat Rations
Department of Defense Sustainment Contracts

Risk Flags

Potential for supply chain vulnerabilities
Quality assurance of perishable goods
Justification for source exclusion in competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $112.3 million to AMERIQUAL GROUP LLC. 8510240137!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 $112.3 million.

What is the period of performance?

Start: 2023-10-31. End: 2024-12-31.

What is AmeriQual Group LLC's historical performance record with the Department of Defense, particularly regarding MRE contracts?

AmeriQual Group LLC has a documented history of supplying MREs and other food products to the Department of Defense. Analyzing past contract performance, including on-time delivery rates, quality compliance, and any history of disputes or contract modifications, would provide a clearer picture of their reliability. While this specific contract award suggests confidence from the DLA, a deeper dive into their broader DoD contract portfolio, including any past performance evaluations or CPARS (Contractor Performance Assessment Reporting System) data, is essential for a comprehensive risk assessment. Their experience in fulfilling large-scale ration orders is a positive indicator, but vigilance regarding execution on this current contract remains important.

How does the per-unit cost of these MREs compare to similar contracts awarded by the DLA or other military branches?

Without specific per-unit cost data for this contract, a direct comparison is challenging. However, the contract's total value of approximately $112 million spread over its duration suggests a significant volume. To benchmark, one would need to identify the number of MRE units procured under this contract and divide the total award amount by that quantity. This figure could then be compared to historical DLA MRE contracts or similar ration procurements by the Army or Marine Corps. Factors like specific MRE menu variations, packaging requirements, and delivery locations can influence per-unit costs, so comparisons should account for these variables. The 'full and open competition' aspect suggests the price achieved is likely competitive within the current market.

Are there any specific risk factors associated with the 'after exclusion of sources' clause in the competition type?

The competition type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the competition was generally open, certain potential sources were excluded from the bidding process. This exclusion typically occurs for specific, justifiable reasons, such as national security concerns, proprietary technology, or unique capabilities possessed by the included bidders. While it doesn't automatically indicate a lack of competition, it warrants scrutiny to ensure the exclusions were valid and did not unduly restrict market participation. If the exclusions were not well-justified, it could potentially lead to higher prices or reduced innovation. However, if the exclusions were based on legitimate factors, the remaining competition could still yield a fair price and good value.

What is the expected impact of this contract on the readiness and morale of deployed military personnel?

This contract is critical for ensuring the sustained readiness and morale of military personnel by providing a consistent and reliable supply of Meals, Ready-to-Eat (MREs). MREs are designed to offer adequate nutrition and caloric intake in field environments where traditional food services are unavailable. A well-executed contract ensures that service members have access to these essential rations, supporting their physical well-being and operational effectiveness. Positive impacts include maintaining troop health, enabling sustained operations in remote or combat zones, and providing a familiar source of sustenance that contributes to morale. Conversely, any disruptions in supply or quality issues could negatively affect readiness and troop morale.

How does the duration and value of this contract compare to previous MRE procurements by the Defense Logistics Agency?

The contract has a duration of approximately 14 months (from end of 2023 to end of 2024) with a total value of $112,308,005.69. To compare this to previous procurements, one would need to access historical contract data for DLA MREs. Key metrics for comparison would include the total dollar value of prior contracts, their duration, the number of units procured, and the awarded contractors. Understanding historical spending patterns helps identify trends in pricing, volume, and contractor concentration. For instance, if this contract represents a significant increase in value or duration compared to similar past contracts, it might warrant further investigation into the reasons, such as increased demand, inflation, or changes in scope. Conversely, if it aligns with historical norms, it suggests consistent program execution.

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

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: $112,308,006

Exercised Options: $112,308,006

Current Obligation: $112,308,006

Actual Outlays: $28,800,000

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