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NAICS NewsletterMay 7, 2009

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 the services of 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.


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. To understand the future, one must study the past. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enables 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 FY05 - Q2FY09 for NAICS 722310

WHAT IS NAICS 722310?

Companies represented by NAICS 722310 provide food services at institutional, governmental, commercial, or industrial locations. The services are provided for the convenience of the contracting organization or the contracting organization's customers. The contracts for these services may vary by type of facility operated (e.g., cafeteria, restaurant, fast-food eating place), revenue sharing, cost structure, and/or providing personnel. These companies always provide the management staff for these contracts.

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 contractual arrangement (except single-event basis))

The size standard associated with NAICS 722310 is $20.5 Million (effective August 22, 2008), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross receipts does not exceed $20.5 Million for the past three years. If a company has not been in business for three years, the average weekly revenue for the number of weeks the company has been in business is multiplied by 52 to determine the average annual receipts.

Total reported spending under NAICS 722310 for the period of Fiscal Year 2005 (FY05) through the January 2009 (Q1FY09+) was over $2.76 Billion. With four months reported, FY09 reported spending of $194 Million for services under NAICS 722310. The chart below illustrates the reported** spending by year for FY05 through Q1FY09+.

Reported Contact Spending FY05 - Q1FY09+ for NAICS 722310 Source: epipeline's Contract History Plus*
** Note: it is possible that some Defense spending for the more recent fiscal years (FY05 to present) is not as widely reported as earlier years. These numbers will likely increase as more departments and agencies report their contract spending.

WHO ISSUES THE CONTRACTS?

The United States Army is the largest buyer of services under NAICS 722310, commanding over 40% of the market share for the last four fiscal years (FY05 through Q1FY09+), with over $1.13 Billion in contract spending. The United States Navy, the United States Air Force, and the United States Coast Guard (USCG) all topped the $100 Million mark. The remaining agencies in the top ten, along with another four agencies, all reported spending above $10 Million.

Top 10 Federal Agencies by % of Total Market FY05 - Q2FY09 for NAICS 722310 Source: epipeline's Contract History Plus*

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 1,479 companies registered under NAICS 722310 (source: active registrants, www.ccr.gov as of 02/25/2009). Of this number, 1,042 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category):

  • 92 SBA Certified 8(a) contractors;
  • 88 SBA Certified HUBZone contractors; and
  • 119 Service Disabled Veteran Owned Small Businesses (SDVOSB).

There are also 34 firms listed as AbilityOne non-profit agencies. The AbilityOne program (www.abilityone.org, formerly known as JWOD - Javits-Wagner-O’Day) provides employment for people who are blind or have other severe disabilities. Working with non-profit organizations, they can provide these services at a fair price. The program is overseen by The Committee for Purchase From People Who Are Blind or Severely Disabled (an independent federal agency). They receive help from the NISH (www.nish.org) and the National Industries for the Blind (NIB - www.nib.org). Some contracts are set-aside under the AbilityOne program or the Randolph Sheppard Act (RSA - associated closely with NIB) and others may have an evaluation preference for these programs.

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 then the resulting totals above represent.

The two charts below identify the top 10 Companies, by market share, for the period of FY05 through Q1FY09+. 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 holds the top spot on the unrestricted competition list with over $347 Million in contract dollars for FY05-Q1FY09+ and over 13.3% of the market share. The next four companies on the list, Goodwill Industries of Southeastern Wisconsin, Georgia Department Of Labor, Missouri Family Support Division, and Work Services Corporation, all reported spending above $100 Million for this same period. The remaining firms in the top ten, along with forty other companies had reported spending topping $10 Million.

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 FY05 - Q2FY09 - All Acquisition Strategies Source: epipeline's Contract History Plus*

The ninth company on the previous chart is the top company on the following chart, which represents spending under NAICS 722310 for contracts using restricted competition, as outlined above. KCA Corporation had the highest reported spending with over $57.6 Million, or 13.4% of the market share for contracts with a restricted acquisition strategy. Nayyar Sons Food Corporation was next, with $31 Million in reported contract spending during the FY05 through Q1FY09+ period. The Department Of Assistive And Rehabilitative Services also has reported spending above $25 Million - with $28.6 Million, or 6.6% of the market share.

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 FY05 - Q2FY09 - RESTRICTED Competition

HOW ARE THESE CONTRACTS PROCURED?

Almost 74% of contract spending reported for the FY05 through Q1FY09+ timeframe under NAICS 722310 used full and open (unrestricted) competition. This equated to over $2.03 Billion. Over 10% of the market share did not include a designated acquisition strategy, which could include contracts awarded using full and open competition, small business set-aside, or any manner of restriction. Small Business set-aside contracts represented 7.46% market share, or over $200 Million in contract spending for this period. Contracts competitively awarded to 8(a) firms and those sole sourced to 8(a) firms combined, reported over $168 Million in contract spending, with competitive contracts taking the lion's share at $107 Million. Contracts set-aside for HUBZone or SDVOSB companies represented a smaller market share, with combined sole source and competitive contracts for these acquisition strategies totaling just over $51 Million for the FY05 - Q1FY09+ period.

Acquisition Breakout under NAICS 722310 - FY05 through Q2FY09 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 of $2.46 Billion and contracts for locations outside the United States total over $292 Million.

The contracts with a reported place of performance located in California reported the highest level of spending under this NAICS, with over $332 Million - or 12% of the market share. Texas, North Carolina, and Georgia all reported spending over $200 Million, and Illinois, Missouri, and South Carolina reported spending over $100 Million for the period of FY05 through Q1FY09+. The remaining states in the top ten, along with 23 other states, all reported spending above $10 Million.

The contracts under this code are site-specific, so states with large and/or multiple military installations will show higher reported spending. Federal buildings throughout the United States have food/cafeteria service contracts through GSA Public Buildings Service (PBS), however many are 'zero dollar' contracts, so there is no reported spending for these contracts.

Contract Place of Performance under NAICS 722310 (FY05-Q2FY09) Source: epipeline's Contract History Plus*
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