USDA Awards $29.7M Contract to CHS Inc. for Soft White Wheat Bulk for Food Donations

Contract Overview

Contract Amount: $29,650,055 ($29.7M)

Contractor: CHS Inc.

Awarding Agency: Department of Agriculture

Start Date: 2024-09-18

End Date: 2025-03-15

Contract Duration: 178 days

Daily Burn Rate: $166.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010346/4210007198/WHEAT, SOFT WHITE BULK

Place of Performance

Location: KALAMA, COWLITZ County, WASHINGTON, 98625

State: Washington Government Spending

Plain-Language Summary

Department of Agriculture obligated $29.7 million to CHS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010346/4210007198/WHEAT, SOFT WHITE BULK Key points: 1. The contract value of $29.7 million is significant for food donation commodities. 2. CHS Inc. is a major agricultural cooperative, indicating substantial market presence. 3. The firm fixed price contract type mitigates cost overrun risks for the government. 4. This procurement falls under the 'All Other Miscellaneous Food Manufacturing' NAICS code.

Value Assessment

Rating: good

The contract value of $29.7 million for bulk wheat appears reasonable given market prices for agricultural commodities. Benchmarking against similar government food donation procurements would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process that likely led to fair market pricing. The use of a definitive contract indicates a clear scope of work.

Taxpayer Impact: The procurement supports vital food donation programs, ensuring resources reach intended recipients efficiently. Competition helps ensure taxpayer funds are used effectively for this social good.

Public Impact

Ensures supply of essential food commodities for domestic and international food assistance programs. Supports agricultural producers through the purchase of bulk wheat. Contributes to food security initiatives by providing staple food items.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in global wheat markets impacting future procurements.
Logistical challenges in distribution of bulk commodities.

Positive Signals

Firm fixed price contract provides cost certainty.
Award to a large, established supplier like CHS Inc. suggests reliability.
Supports critical government food donation missions.

Sector Analysis

This contract falls within the agricultural commodities sector, specifically focusing on food manufacturing and distribution for government programs. Spending benchmarks for food donations vary widely based on commodity type and program scope.

Small Business Impact

The award to CHS Inc., a large agricultural cooperative, suggests that small businesses may not have been primary bidders for this specific large-volume commodity contract. Further analysis would be needed to determine if any small business subcontracting opportunities exist.

Oversight & Accountability

The Agricultural Marketing Service (AMS) oversees procurements for USDA food donation programs. Oversight typically involves ensuring contract compliance, quality standards, and timely delivery to meet program needs.

Related Government Programs

All Other Miscellaneous Food Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Potential for price volatility in agricultural commodities.
Logistical complexities of bulk commodity handling and distribution.
Dependence on a single large supplier for a critical commodity.
Ensuring consistent quality of bulk food items over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $29.7 million to CHS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010346/4210007198/WHEAT, SOFT WHITE BULK

Who is the contractor on this award?

The obligated recipient is CHS INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Marketing Service).

What is the total obligated amount?

The obligated amount is $29.7 million.

What is the period of performance?

Start: 2024-09-18. End: 2025-03-15.

What is the historical pricing trend for soft white wheat and how does this contract align?

Analyzing historical price data for soft white wheat, both domestically and internationally, is crucial. This contract's price should be compared against these trends and average market prices over the contract period to assess value. Fluctuations due to weather, global demand, and trade policies can significantly impact pricing, making a direct comparison essential for determining if the government secured a favorable rate.

What are the potential risks associated with the long-term supply and quality of bulk wheat over the contract duration?

Risks include potential spoilage or contamination during storage and transport, especially for bulk commodities. Ensuring robust quality control measures and adherence to handling protocols by the contractor is paramount. Furthermore, unforeseen global events impacting wheat supply chains or quality could pose challenges. The government should have contingency plans and clear recourse mechanisms in place.

How effectively does this procurement mechanism support the overall goals of the USG food donation program?

This procurement method, utilizing a firm fixed price contract with full and open competition, appears effective for ensuring a reliable supply of a key commodity at a predictable cost. It directly addresses the need for staple foods in donation programs. However, the effectiveness is ultimately measured by the successful distribution and impact of the donated food on recipient populations.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NAG24B0032

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5500 CENEX DR, INVER GROVE HEIGHTS, MN, 55077

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,650,055

Exercised Options: $29,650,055

Current Obligation: $29,650,055

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline