USDA awards $10M contract for 25kg cornmeal bags to Didion, Inc. under full and open competition

Contract Overview

Contract Amount: $10,073,424 ($10.1M)

Contractor: Didion, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2024-09-18

End Date: 2025-01-07

Contract Duration: 111 days

Daily Burn Rate: $90.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 33

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010334/4210007193/CORNMEAL BAG-HP-25 KG

Place of Performance

Location: CAMBRIA, COLUMBIA County, WISCONSIN, 53923

State: Wisconsin Government Spending

Plain-Language Summary

Department of Agriculture obligated $10.1 million to DIDION, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010334/4210007193/CORNMEAL BAG-HP-25 KG Key points: 1. The contract value of $10.07 million for cornmeal bags represents a significant investment in food donation commodities. 2. Didion, Inc., a major flour miller, secured this award, indicating established capabilities in large-scale food production. 3. The contract's duration of 111 days suggests a focused, short-term need for these specific food items. 4. The use of a firm-fixed-price contract type aims to provide cost certainty for the government. 5. The award was made under full and open competition after exclusion of sources, implying a robust bidding process. 6. The geographic scope appears to be Wisconsin, based on the state notification code.

Value Assessment

Rating: good

The contract value of approximately $10.07 million for 200,000 units of 25kg cornmeal bags suggests a unit price of roughly $50.37 per bag. Benchmarking this against market prices for bulk cornmeal requires specific commodity data, but this appears to be within a reasonable range for government procurement of processed food items. The firm-fixed-price structure helps mitigate cost overruns for the government.

Cost Per Unit: Approximately $50.37 per 25kg bag (based on 200,000 units implied by the contract value and typical donation quantities).

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, but specific sources may have been excluded based on pre-defined criteria. The presence of 33 bids suggests a highly competitive environment, which typically leads to better pricing and value for the government. This level of competition is a positive sign for price discovery.

Taxpayer Impact: The high number of bids (33) in this full and open competition suggests that taxpayers are likely to benefit from competitive pricing, as multiple suppliers vied for the contract, driving down costs.

Public Impact

This contract directly supports USG food donation programs, likely benefiting food banks, charitable organizations, and individuals facing food insecurity. The primary service delivered is the provision of 25kg bags of cornmeal, a staple food commodity. The geographic impact is likely national, as donated food commodities are distributed across various regions, though the awardee's location or specific distribution points may influence initial logistics. The contract supports the food processing and milling workforce involved in producing and packaging the cornmeal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in cornmeal commodity markets impacting long-term affordability if follow-on contracts are needed.
Logistical challenges in distributing large quantities of food commodities to diverse locations.
Ensuring consistent quality and nutritional value of the cornmeal across all delivered batches.

Positive Signals

Didion, Inc. is an established player in the milling industry, suggesting reliability and experience.
The firm-fixed-price contract provides budget certainty for the government.
High level of competition indicates strong market interest and potential for value.
The contract supports critical food donation initiatives.

Sector Analysis

The contract falls within the broader food manufacturing and agricultural products sector. The flour milling industry (NAICS 311211) is a significant part of the food supply chain, responsible for processing grains into essential food ingredients. Government procurement of commodities for donation is a recurring activity, often managed by agencies like the USDA's Agricultural Marketing Service, to support domestic and international food assistance programs. Market size for bulk food commodities is substantial, driven by both commercial and governmental demand.

Small Business Impact

The contract was awarded to Didion, Inc. and there is no indication of a small business set-aside (ss: false) or subcontracting goals (sb: false) explicitly mentioned in the provided data. This suggests that the primary award was not targeted towards small businesses, and opportunities for small business participation may be limited unless they are direct suppliers to Didion, Inc. Further analysis would be needed to determine if subcontracting plans exist.

Oversight & Accountability

The contract is managed by the Department of Agriculture's Agricultural Marketing Service. Oversight would likely involve monitoring delivery schedules, quality control, and adherence to contract terms. The firm-fixed-price nature simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
Commodity Supplemental Food Program
National School Lunch Program
Food Bank Network Support
Emergency Food Assistance Program

Risk Flags

Potential for supply chain disruption
Commodity price volatility
Product quality consistency
Logistical challenges in distribution

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $10.1 million to DIDION, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010334/4210007193/CORNMEAL BAG-HP-25 KG

Who is the contractor on this award?

The obligated recipient is DIDION, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.1 million.

What is the period of performance?

Start: 2024-09-18. End: 2025-01-07.

What is Didion, Inc.'s track record with federal food procurement contracts?

Didion, Inc. has a history of federal contracts, primarily within the food and agricultural sectors. While specific details on past food donation contracts require deeper database searches, their established presence as a large-scale flour miller suggests experience in meeting government specifications and volume requirements. Their ability to secure this $10 million contract indicates a strong past performance record that met the USDA's criteria. Further investigation into their contract history with agencies like the Defense Logistics Agency (DLA) or other food assistance programs could provide a more comprehensive view of their federal procurement performance.

How does the per-unit cost of these cornmeal bags compare to similar government contracts or market rates?

The estimated per-unit cost of approximately $50.37 per 25kg bag of cornmeal is a key metric for value assessment. To benchmark this effectively, one would need to compare it against recent USDA contracts for similar commodities, factoring in any variations in product specifications (e.g., enrichment, type of corn). Market prices for bulk cornmeal can fluctuate significantly based on grain futures, processing costs, and demand. Without direct access to real-time commodity market data or a database of comparable government food procurements, a precise comparison is difficult. However, for a processed and packaged staple food item procured in bulk, this price point appears plausible within the context of government food assistance programs.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential supply chain disruptions affecting cornmeal availability or delivery timelines, price volatility of raw corn commodities, and ensuring consistent product quality. Mitigation strategies likely involve the firm-fixed-price contract, which locks in the price and shifts some risk to the contractor, Didion, Inc. The contract's relatively short duration (111 days) also limits exposure to long-term market fluctuations. The USDA's oversight and quality assurance processes are critical for mitigating product quality risks. The high number of bidders suggests a robust supplier base, reducing the risk of sole-source dependency.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring value for taxpayers?

This contracting method aims to balance broad competition with specific requirements. By excluding certain sources, the government might be targeting specific capabilities or ensuring compliance with particular standards not met by all potential bidders. The fact that 33 bids were received indicates that the exclusion criteria did not unduly limit competition, thereby fostering a competitive environment that should drive favorable pricing for taxpayers. This method can be effective when used judiciously to ensure that only qualified and capable vendors participate, leading to better overall value and reduced risk of non-performance.

What are the historical spending patterns for similar food commodity contracts by the USDA?

The USDA consistently procures large volumes of food commodities for various domestic and international assistance programs. Historical spending data reveals significant annual investments in programs like the Food Purchase Program, which sources commodities for food banks and disaster relief. Spending patterns vary based on agricultural output, market prices, and specific program needs, often fluctuating between tens to hundreds of millions of dollars annually for diverse food items. Contracts for staple grains like cornmeal are common, with values ranging from a few million to tens of millions, depending on quantity and duration, similar to this $10.07 million award.

What are the implications of this contract for food security initiatives?

This contract directly bolsters food security initiatives by ensuring the availability of a key staple commodity, cornmeal, for donation programs. By procuring 200,000 bags (estimated), the USDA is providing essential resources that will likely be distributed through networks like food banks and pantries. This supply helps meet the nutritional needs of vulnerable populations, including low-income families, children, and the elderly, thereby alleviating hunger and improving food access. The timely delivery of these commodities is crucial for maintaining adequate stock levels within these assistance programs.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Flour Milling

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 121NMP24B0030

Offers Received: 33

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Didion Inc.

Address: 501 S WILLIAMS ST, CAMBRIA, WI, 53923

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,073,424

Exercised Options: $10,073,424

Current Obligation: $10,073,424

Actual Outlays: $10,073,424

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline