A Month In The Life: US Military Commissary & Food Contracts, Oct. 2006

Army of the Potomac
Commissary Dept. HQ, 1864
(click to view full)

It’s often said that an army travels on its stomach. Well, they base that way, too. In addition to contracts for field rations like MREs, the US military has an extensive network of bases with a correspondingly extensive set of mess halls and even commissary stores where military families can go to buy food and other goods. To get an idea of the scale involved, annual sales at those commissaries exceeds $5 billion.

This article will track an often-overlooked area during the month of October 2006, covering all food-related contracts issued by the US military and explaining just what an “economic price adjustment” contract is.

It will be updated as new contract items are published on DefenseLINK…

2006: Ft. Greely, Alaska
(click to view full)

Note that “economic price adjustment” contracts will compensate vendors if the prices of their inputs rise. These ajustments can be based on a set agreed price, or on actual prices or costs indexes of labor or material – see clause 16.203 at this link for more, including when to use such contracts and when not to.

For instance, the government signs an oil contract with Company A at a fixed price, but with economic price adjustment. If oil prices later go through the roof, Company A doesn’t have to go bankrupt supplying that oil because there’s an agreed formula under which the government will pay extra as a function of the rise in commodity prices.

If the government didn’t do this in certain areas, everyone would (a) pad their bids to cover price fluctuation risks, and the government would end up paying more; and (b) be less inclined to bid for government contracts, because their size would represent a lot of risk. Which would reduce the number of bidders overall and pretty much eliminate small business bidders in certain areas – again leading to the government paying more, as well as reducing selection.

Oct 18/06: Sysco Food Services of Central Alabama in Calera, AL received a maximum $18.75 million fixed-price with economic price adjustment contract for Southeast Region prime vendor food and beverage support for the US Army, Navy, Air Force, and Job Corps in Alabama and Florida. Proposals were Web-solicited and 3 responded. This is an indefinite-quantity type contract exercising the second of four 1-year options. Contract funds will expire at the end of the current fiscal year, and the date of performance completion is October 16, 2007. The Defense Supply Center Philadelphia (DSCP) in Philadelphia, PA issued the contract (SPM300-07-D-3104).

Oct 17/06: US Food Service Atalanta Division in Fairburn, GA received a maximum $38.8 million fixed price with economic price adjustment contract for prime vendor full line food distribution for the Army, and Air Force. The DefenseLINK announcement didn’t specify where these services would be provided, but it did note that the ontract is exercising option year 2. Research shows an August 20, 2004 contract that specifies Georgia as the territory, and a comparison also notes that this new contract omits the US Navy and Job Corps. Proposals were Web-solicited and 3 responded, and this option period will end on Oct. 16, 2007. The Defense Supply Center Philadelphia (DSCP) in Philadelphia, PA issued the contract (SPM300-06-D-3105).

Oct 13/06: Quality Distributors in Tamuning, Guam received a maximum $30 million firm-fixed-price contract for prime vendor full line food distribution to US Army, Navy, Air Force, Marine Corps, Federal civilian agencies, and authorized DoD customers. This will take place on Guam as well as Stockton, CA and Richmond, CA. This indefinite quantity type contract has a two-year base period, and the date of performance completion is October 23, 2008. Proposals were Web-solicited and 2 responded. The Defense Supply Center Philadelphia (DSCP) in Philadelphia, PA issued the contract (SPM300-07-D-3210). DefenseLINK flagged this as a “labor surplus” contract.

Oct 10/06: Small business qualifier Ettline Food Corp. in York, PA won a maximum $18.9 million firm fixed price contract for prime vendor total food and beverage support for the US Navy, Federal civilian agencies, and Job Corp center in mid-Atlantic Zone 2s. Proposals were Web-solicited and 4 responded; the date of performance completion is November 19, 2007. The Defense Supply Center Philadelphia (DSCP) in Philadelphia, PA issued the contract (SPM300-07-D-3211).

Oct 10/06: Coast Produce Co. in Los Angeles, CA won a $70.7 million indefinite delivery, requirements type contract to provide fresh fruits and vegetables (FF&V) for resale at multiple commissary store locations throughout the Defense Commissary Agency’s West Region and Hawaii. This include the following states: Arizona, California, Nevada, and Hawaii. Deliveries will occur to the store locations as needed over the two-year base period beginning November 1, 2006 – October 31, 2008. Two one-year option periods are available, and if both are exercised the contract will be complete on October 31, 2010. 45 firms were solicited and 9 offers were received by the Defense Commissary Agency’s Resale Contracting Division, Resale Services Support Branch at Fort Lee, VA (HDEC02-07-D-0004).

Oct 6/06: Tyson Fresh Meats Incorporated in Dakota Dunes, SD won an indefinite delivery, requirements type contract to provide fresh and frozen beef products for resale to 93 commissary stores located throughout Maine, Pennsylvania, Virginia, Florida, Georgia, New York, New Jersey, North and South Carolina, Alabama, Louisiana, Mississippi, Tennessee, South Dakota, Wyoming, Colorado, Kansas, North and South Dakota, Kentucky, Illinois, Ohio, Missouri and New Hampshire. The estimated award amount is $157.1 million. The contractor will deliver beef to the store locations as needed during the base period beginning Oct. 6, 2006 – Oct. 31, 2007. Two one-year option periods are available, and if both are exercised the contract will be complete October 31, 2009. 41 firms were solicited and 3 offers were received by the Defense Commissary Agency’s Resale Contracting Division, Resale Services Support Branch at Fort Lee, VA (HDEC02-07-D-0001)

Oct 6/06: National Beef Packing Company, LLC in Kansas City, MO received an indefinite delivery, requirements type contract to provide fresh and frozen beef products for resale to 32 commissary stores located throughout Texas, Oklahoma, New Mexico, and Kansas. The estimated award amount is $33.9 million. The contractor will deliver beef to the store locations as needed during the base period beginning Oct.6, 2006 – Oct. 31, 2007. Two one-year option periods are available, and if both are exercised the contract will be complete October 31, 2009. 41 firms were solicited and 3 offers were received by the Defense Commissary Agency’s Resale Contracting Division, Resale Services Support Branch at Fort Lee, VA (HDEC02-07-D-0003)