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NAICS Newsletter May 30, 2011

NAICS 722310

Food Service Contractors

Government Contract and Procurement Analysis Report

Report Summary

This report, offered by epipeline, contains a brief analysis of the Federal government's procurement practices with regards to purchasing Food Service Contractors.


You will find information on the top federal government agencies that purchase these services, as well as their procurement strategy (i.e. full and open competition, set-asides and more). Finally, there is a review of the top companies that are awarded federal government contracts for Food Service Contractors.


To get a more comprehensive analysis and learn more about how epipeline can help you identify current and future bid opportunities, register for a live Demo.

This report takes an in-depth look at the 'Food Service Contractors' industry, NAICS 722310. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enable you to develop the best positioning and strategy for your company to more effectively compete for government contracts. The following graph illustrates one such perspective: the top Government departments/agencies buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY07 through FY11 for NAICS 722310

WHAT IS NAICS 722310?

This industry comprises establishments primarily engaged in providing food services at institutional, governmental, commercial or industrial locations of others based on contractual arrangements with these type of organizations for a specified period of time. The establishments of this industry provide food services for the convenience of the contracting organization or the contracting organizations customers. The contractual arrangement of these establishments with contracting organizations may vary from type of facility operated (e.g., cafeteria, restaurant, fast-food eating place), revenue sharing, cost structure, to providing personnel. Management staff is always provided by the food service contractors.

The description of NAICS 722310 is further broken out to include these additional specific topics:

  • Airline food services contractors
  • Cafeteria food services contractors (e.g., government office cafeterias, hospital cafeterias, school cafeterias)
  • Food concession contractors (e.g., convention facilities, entertainment facilities, sporting facilities)
  • Food service contractors, airline
  • Food service contractors, cafeteria
  • Food service contractors, concession operator (e.g., convention facilities, entertainment facilities, sporting facilities)
  • Industrial caterers (i.e., providing food services on a contractural arrangement (except single-event basis))

Please note that establishments primarily engaged in providing food services on a single-event basis are classified in Industry 722320, Caterers; and establishments supplying and servicing food vending machines are classified in Industry 454210, Vending Machine Operators.

The size standard associated with NAICS 722310 is $35.5 million (effective November 5, 2010), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross receipts does not exceed $35.5 million for the past three years.

Total reported spending under NAICS 722310 for the period of Fiscal Year 2007 (FY07) through Fiscal Year 2011 (FY11) was more than $2.7 billion. FY11 reported spending of close to $20.8 million for services under NAICS 722310. The chart below illustrates the reported** spending by year for FY07 through FY11.

Reported Contract Spending for NAICS 722310 FY07 through FY11

Source: epipeline's Contract History Plus*

** Note: it is possible that some Defense spending for the more recent fiscal years (FY06 to present) is not as widely reported as earlier years. These numbers will likely increase as more departments and agencies report their current and historic contract spending.

WHO ISSUES THE CONTRACTS?

The Department of the Army was the largest procurer for these services for the last five fiscal years (FY07 through FY11), with over $1.2 billion in contract spending, comprising nearly 45.8% of the market share for NAICS 722310. The Department of the Navy took the second spot, with over $585 million in reported spending for this period. The Department of the Air Force and the Defense Logistics Agency took third and fourth places, respectively, making up a combined market share of 17.86% for all spending in NAICS 722310.

The US Coast Guard and the Bureau of Prisons spent $99 and $84 million respectively during this time period with the rest of the top ten reporting spending just north of $140.6 million for NAICS 722310.

Top 10 Federal Agencies by % of Total Market FY07 through FY11 for NAICS 722310

Source: epipeline's Contract History Plus*

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 1,970 companies registered under NAICS 722310 (source: active registrants, www.ccr.gov as of 6/24/2011). Of this number, 1,449 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category):

  • 114 SBA Certified 8(a) contractors;
  • 74 SBA Certified HUBZone contractors; and
  • 180 Service Disabled Veteran Owned Small Businesses (SDVOSB).

NOTE, the CCR website states, "As of the July 30, 2008 release (4.08.2), CCR-registered vendors may elect not to display their registration in the CCR/FedReg Public Search." This could mean that there are more active contractors registered with the CCR than the resulting totals above represent.

The two charts below identify the top 10 Companies, by market share, for the period of FY07 through FY11. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the acquisition strategies listed below. The contract dollars represented on this second chart may not include all contract dollars for the individual contractor.

  • 8(a) Competed
  • 8(a) Small Disadvantaged (SDB) set-aside
  • 8(a) sole-source
  • SDB set-aside
  • SDB, 8(a) with HUBZone
  • Combination HUBZone and 8(a)
  • HUBZone set-aside
  • HUBZone sole-source
  • Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside
  • SDVOSB sole-source
  • Emerging Small Business set-aside
  • Very Small Business set-aside
  • Reserved for Small Businesses ($2501 to $100,000)
  • Total Small Business set-aside

Sodexho Management achieved the top spot on the unrestricted competition list, with close to $379 million in contract dollars for FY07 to FY11 and just under 15% of the market share. The Georgia Department of Labor landed $155 million in contract dollars with the South Carolina Commission for the Blind earning over $101 million. Goodwill Industries of Southeastern Wisconsin and the Texas Commission for the Blind round out the top five with $86 and $71 million, respectively. Five additional firms: Missouri Family Support Division, the Oklahoma Department of Rehabilitation Services, the Department Of Assistive And Rehabilitative Services, Work Services and K C A Corporation, each topped $50 million in contracting dollars for the same time period.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not be reflected in the chart below.

Top 10 NAICS 722310 Contractors by % of Total Market for FY07 through FY11 - All Acquisition Strategies

Source: epipeline's Contract History Plus*

The combined contract spending for contracts awarded under "restricted competition," as outlined above, totaled over $363 million for FY07 through FY11. K C A Corporation takes the top spot, with reported spending of almost $49 million for this period, or 13.4% of market share. Note that K C A Corporation is also in the top ten in the unrestricted competition list. Austin Associates secured nearly $22 million in contracting dollars for this time period. Six other firms in the top ten: Watson Services Inc, Nayyar Sons Food Corp, Ganaayoo Services Corporation, M B Catering Inc, Alabama Dept Of Rehabilitation Services and Avery Group Inc, also exceeded $10 million in reported spending for NAICS 722310.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 722310 Contractors by % of Total Market for FY07 through FY11 - Restricted Competition

Source: epipeline's Contract History Plus*

HOW ARE THESE CONTRACTS PROCURED?

84% of contract spending reported for the FY07 through FY11 timeframe under NAICS 722310 used full and open (unrestricted aka "N/A") competition. This equated to over $2 billion. Contracts that did not indicate their acquisition strategy (which means they could represent any acquisition strategy) reported contract spending of close to $73 million. Contracts that were small business set-aside reported spending of over $174 million. The combined value of contracts representing all other acquisition strategies was just under $199 million, or approximately 7% of the market.

Acquisition Breakout under NAICS 722310 for FY07 through FY11

Source: epipeline's Contract History Plus*

WHERE ARE THESE CONTRACTS PERFORMED?

These contracts are being performed across the continental United States and abroad. The 50 states plus Washington, DC have reported spending for the FY07 through FY11 period of $2.4 billion and contracts for locations outside the United States (or unlisted) totaled $312 million.

The highest total of reported contract spending is reported for California, with $361 million. Texas ($275 million) and North Carolina ($203 million) took the second and third spots. Together, the top five states represent 41.79% of market under NAICS 722310. Besides those in the top ten, an additional five states reported at least $50 million for NAICS 722310 during this time period.

Contract Place of Performance under NAICS 722310 for FY07 through January 2011

Source: epipeline's Contract History Plus*

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