USDA's $70M contract for precooked meat boxes awarded to RICH CHICKS LLC amid 568 offers

Contract Overview

Contract Amount: $69,827,975 ($69.8M)

Contractor: Rich Chicks LLC

Awarding Agency: Department of Agriculture

Start Date: 2020-05-14

End Date: 2020-09-19

Contract Duration: 128 days

Daily Burn Rate: $545.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 568

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000006919/4100020277/PRECOOKED MEAT BOX,COMBINATION BOX

Place of Performance

Location: GARDENA, LOS ANGELES County, CALIFORNIA, 90249

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $69.8 million to RICH CHICKS LLC for work described as: 2000006919/4100020277/PRECOOKED MEAT BOX,COMBINATION BOX Key points: 1. Value for money assessed against market benchmarks for similar food products. 2. Competition dynamics indicate a robust bidding process with 568 offers. 3. Risk indicators include contractor performance history and delivery timelines. 4. Performance context is a short-term supply need for food products. 5. Sector positioning within the 'All Other Miscellaneous Food Manufacturing' category. 6. Contract type is a definitive contract with a firm fixed price.

Value Assessment

Rating: fair

The contract value of approximately $70 million for precooked meat boxes appears substantial. Benchmarking against similar government contracts for food supplies is challenging without specific product details. However, the large number of offers (568) suggests that the pricing was likely competitive. Further analysis would require comparing the per-unit cost of the meat boxes to commercial wholesale prices for comparable products, considering factors like packaging, delivery, and specific meat types.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with a significant 568 offers received. This high level of competition is a positive indicator, suggesting that the solicitation attracted a wide range of potential suppliers. The extensive bidding process likely contributed to price discovery and may have driven down costs for the government. The agency's ability to secure such a large number of bids indicates a healthy market for these types of food products.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a more favorable price than a less competitive procurement. It demonstrates that government funds are being used efficiently by leveraging market forces.

Public Impact

Beneficiaries include recipients of USDA food assistance programs or emergency food supplies. Services delivered include the provision of precooked meat boxes and combination boxes. Geographic impact is primarily within California, where the contractor is located. Workforce implications may include employment at RICH CHICKS LLC and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (128 days) may limit long-term planning for the contractor.
Reliance on a single contractor for a significant food supply could pose a risk if performance issues arise.

Positive Signals

High number of bids (568) indicates strong market interest and potential for quality suppliers.
Firm fixed-price contract provides cost certainty for the government.
Contract awarded to a domestic supplier (California).

Sector Analysis

The 'All Other Miscellaneous Food Manufacturing' sector encompasses a broad range of food processing activities. This contract falls within the broader food and beverage industry, which is a significant part of the US economy. Government procurement of food products is common, supporting various programs and agencies. Benchmarking spending in this specific niche is difficult without more granular data, but the overall food manufacturing sector is substantial.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. The contractor, RICH CHICKS LLC, is not identified as a small business in the provided data. Therefore, the direct impact on the small business ecosystem appears limited for this specific award, though indirect benefits could arise if RICH CHICKS LLC utilizes small business suppliers.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's Agricultural Marketing Service (AMS). AMS is responsible for ensuring contract compliance, quality standards, and timely delivery. Accountability measures are inherent in the firm fixed-price contract, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for supply chain disruption due to short contract duration.
Quality control risks inherent in perishable food products.
Contractor performance monitoring is critical.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $69.8 million to RICH CHICKS LLC. 2000006919/4100020277/PRECOOKED MEAT BOX,COMBINATION BOX

Who is the contractor on this award?

The obligated recipient is RICH CHICKS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $69.8 million.

What is the period of performance?

Start: 2020-05-14. End: 2020-09-19.

What is the track record of RICH CHICKS LLC in fulfilling government contracts, particularly for food products?

Information regarding the specific track record of RICH CHICKS LLC in fulfilling government contracts is not detailed in the provided data snippet. However, the award of a definitive contract valued at approximately $70 million suggests a level of capability and experience deemed sufficient by the Department of Agriculture's Agricultural Marketing Service. To fully assess their track record, a review of past performance evaluations, any history of contract disputes or terminations, and the successful completion of similar-sized or complex food supply contracts would be necessary. Government contract databases and past performance information systems would be the primary sources for this detailed assessment.

How does the per-unit cost of these precooked meat boxes compare to commercial wholesale prices?

The provided data does not include the specific per-unit cost or the exact specifications of the 'PRECOOKED MEAT BOX, COMBINATION BOX.' Therefore, a direct comparison to commercial wholesale prices is not possible. To conduct such a comparison, one would need to know the weight, type of meat, ingredients, packaging, and preparation level of the boxes. This information, along with current wholesale market data for similar products, would be required to determine if the government price represents good value. The large number of bids (568) suggests competitive pricing, but without unit cost data, a definitive benchmark cannot be established.

What are the primary risks associated with this contract, given its short duration and specific product type?

The primary risks associated with this contract include potential supply chain disruptions, quality control issues, and contractor performance failures, especially given the short duration of 128 days. A short timeframe can put pressure on the contractor to meet delivery schedules, potentially impacting quality or leading to delays. If RICH CHICKS LLC experiences unforeseen issues (e.g., raw material shortages, production problems, transportation delays), the government's ability to secure an alternative supply quickly might be limited due to the specialized nature of precooked meat boxes. Furthermore, ensuring consistent quality and safety standards for perishable food items over the contract period requires robust oversight.

How effective is the Agricultural Marketing Service (AMS) in managing food procurement contracts of this nature?

The Agricultural Marketing Service (AMS) has extensive experience in managing food procurement contracts to support various federal nutrition assistance programs. Their effectiveness is generally considered good, characterized by established procedures for solicitation, evaluation, and contract administration. AMS utilizes quality assurance specialists and contract officers to monitor performance, ensure compliance with specifications, and manage payments. While specific effectiveness metrics for this particular contract are not available, AMS's long-standing role in procuring billions of dollars worth of food annually suggests a high degree of operational competence. Challenges can arise, as with any large-scale procurement, but AMS typically has mechanisms in place to address performance issues.

What is the historical spending pattern for similar precooked meat box contracts by the USDA?

Historical spending patterns for similar precooked meat box contracts by the USDA are not detailed in the provided data. However, the USDA, through its various agencies like AMS, regularly procures food products, including processed meats, to support domestic nutrition programs. Spending can fluctuate based on program needs, appropriations, and market conditions. To analyze historical spending, one would need to query federal procurement databases (like FPDS) for contracts with similar product descriptions (e.g., 'precooked meat,' 'food boxes,' 'combination meals') awarded by the USDA over several fiscal years. This would reveal trends in contract volume, value, and awarded contractors.

What are the implications of awarding a large contract like this to a single entity, RICH CHICKS LLC?

Awarding a large contract valued at approximately $70 million to a single entity, RICH CHICKS LLC, concentrates the delivery responsibility and associated risks. On the positive side, it can streamline management and potentially lead to economies of scale for the contractor, possibly translating to better pricing. However, it also creates a dependency; if RICH CHICKS LLC fails to perform adequately (e.g., quality issues, delivery delays, financial instability), the government faces significant disruption in its food supply chain. The short contract duration (128 days) mitigates some long-term risk but still requires diligent monitoring of the contractor's performance throughout its term.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 123J1420R0377/4100020277

Offers Received: 568

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4276 N TRACY BLVD, TRACY, CA, 95304

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $69,827,975

Exercised Options: $69,827,975

Current Obligation: $69,827,975

Actual Outlays: $64,464,725

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline