Agriculture contract for soybean meal awarded to Archer-Daniels-Midland Company for over $25 million

Contract Overview

Contract Amount: $25,040,596 ($25.0M)

Contractor: Archer-Daniels-Midland Company

Awarding Agency: Department of Agriculture

Start Date: 2025-05-21

End Date: 2025-06-15

Contract Duration: 25 days

Daily Burn Rate: $1.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010810/4210007374/SOYBEAN MEAL BULK

Place of Performance

Location: DESTREHAN, SAINT CHARLES County, LOUISIANA, 70047

State: Louisiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $25.0 million to ARCHER-DANIELS-MIDLAND COMPANY for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010810/4210007374/SOYBEAN MEAL BULK Key points: 1. Value for money appears reasonable given the commodity market for soybean meal. 2. Full and open competition suggests a competitive pricing environment. 3. Contract duration is relatively short, potentially mitigating long-term price volatility risks. 4. Performance context is for food donations, indicating a critical public service. 5. Sector positioning is within agricultural commodities, a core function of the USDA. 6. The contract is a definitive contract, suggesting a clear scope of work.

Value Assessment

Rating: good

The contract value of approximately $25 million for soybean meal is within expected ranges for bulk commodity purchases. Benchmarking against historical USDA food donation contracts for similar quantities and types of commodities would provide a more precise value assessment. However, given the nature of agricultural commodities, prices can fluctuate, making direct comparisons challenging without specific market data for the award period. The firm fixed-price structure offers cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a competitive process, which generally leads to better price discovery and value for the government. The specific number of bidders is not detailed, but the competition type implies a robust market for this commodity.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces, ensuring the government obtains the best possible value for its spending on essential food donations.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered include the provision of bulk soybean meal, a key ingredient for food processing and distribution. Geographic impact is likely national, supporting the broader network of food banks and charitable organizations. Workforce implications are minimal for the direct contract, but support jobs in agriculture, processing, and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in commodity markets impacting the fixed price if market conditions change drastically.
Reliance on a single supplier for a critical commodity could pose a risk if supply chain disruptions occur.

Positive Signals

Firm fixed-price contract provides budget certainty.
Short contract duration limits exposure to long-term market fluctuations.
Awarded through full and open competition, suggesting competitive pricing.

Sector Analysis

This contract falls within the agricultural commodities sector, specifically focusing on soybean meal processing and distribution. The market for agricultural commodities is vast and subject to global supply and demand dynamics, weather patterns, and trade policies. The USDA's Agricultural Marketing Service plays a crucial role in ensuring the availability and affordability of such commodities for domestic and international programs. Comparable spending benchmarks would involve analyzing other large-scale commodity procurements by government agencies for food aid or strategic reserves.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. The primary contractor, Archer-Daniels-Midland Company, is a large corporation. Further analysis would be needed to determine if any subcontracting opportunities for small businesses exist within the supply chain or logistics for this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Agricultural Marketing Service (AMS) within the USDA. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Contracts
Agricultural Marketing Service Contracts
Food Security Initiatives

Risk Flags

Potential for commodity price volatility
Short contract duration may require rapid re-procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $25.0 million to ARCHER-DANIELS-MIDLAND COMPANY. COMMODITIES FOR USG FOOD DONATIONS: 2000010810/4210007374/SOYBEAN MEAL BULK

Who is the contractor on this award?

The obligated recipient is ARCHER-DANIELS-MIDLAND COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2025-05-21. End: 2025-06-15.

What is the historical spending pattern for soybean meal procurement by the USDA for food donation purposes?

Analyzing historical spending patterns for soybean meal procurement by the USDA for food donation purposes requires access to detailed contract databases over several fiscal years. This would involve identifying all contracts awarded for soybean meal, noting the quantities, prices, and awardees. Trends in pricing, volume, and the number of competing bidders over time would reveal whether the current award of $25,059,595.80 is consistent with past expenditures or represents a significant deviation. Factors such as market fluctuations, changes in program requirements, and the number of active suppliers can influence these patterns. A comprehensive review would help assess if the government is consistently achieving good value for this essential commodity.

How does the awarded price per ton of soybean meal compare to prevailing market rates at the time of award?

To compare the awarded price per ton of soybean meal to prevailing market rates, one would need to calculate the quantity of soybean meal procured under this contract and divide the total award amount by that quantity. For instance, if the contract was for 100,000 tons, the price per ton would be approximately $250.59. This figure would then be benchmarked against commodity market data (e.g., from the Chicago Board of Trade or USDA's Agricultural Marketing Service reports) for bulk soybean meal during the contract award period (May-June 2025). A comparison would reveal if the government secured a competitive price relative to the open market, considering factors like delivery terms and quality specifications.

What is Archer-Daniels-Midland Company's track record with USDA contracts, particularly for commodity procurement?

Archer-Daniels-Midland Company (ADM) is a major global agricultural origination and processing company. Its track record with USDA contracts, especially for commodity procurement, is extensive. ADM frequently participates in and wins bids for various agricultural commodities, including grains, oilseeds, and processed products, often in large volumes for domestic and international food assistance programs. A review of ADM's contract history with the USDA would likely show numerous awards across different agencies and programs. Assessing the performance history, including any past issues with delivery, quality, or compliance, would provide context for the current award. Generally, large, established companies like ADM have a well-documented history of fulfilling government contracts.

What are the potential risks associated with a short-duration contract for a commodity like soybean meal?

The primary risk associated with a short-duration contract (25 days) for a commodity like soybean meal is the potential for price volatility. While a firm fixed-price contract protects the government from price increases during the contract period, a short duration means the government might need to re-compete or re-negotiate at potentially higher prices if market conditions shift unfavorably shortly after the contract ends. Conversely, a short duration can also be advantageous if prices are expected to fall. Another risk could be ensuring consistent supply and timely delivery within a compressed timeframe, especially if unforeseen logistical challenges arise. However, for a commodity like soybean meal, which is widely produced and traded, supply chain disruptions are less likely to be catastrophic over such a short period.

How does the 'full and open competition' designation impact the overall cost-effectiveness of this contract?

The 'full and open competition' designation is a strong indicator of potential cost-effectiveness for this contract. It signifies that the solicitation was made available to all responsible prospective contractors, fostering a competitive environment. This typically drives down prices as multiple bidders vie for the contract, offering their best terms. The fact that there were two bids suggests that the market for this commodity procurement is sufficiently robust to attract multiple interested parties. This competitive pressure helps ensure that the government is not overpaying and is likely receiving a price that reflects fair market value, thereby maximizing the value for taxpayer dollars spent on food donations.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean and Other Oilseed Processing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NFG25B0016

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 77 W WACKER DR STE 4600, CHICAGO, IL, 60601

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

Financial Breakdown

Contract Ceiling: $25,040,596

Exercised Options: $25,040,596

Current Obligation: $25,040,596

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline