Department of Agriculture awards $26.8M contract for canned meat products to Lakeside Foods Inc

Contract Overview

Contract Amount: $26,801,116 ($26.8M)

Contractor: Lakeside Foods Inc

Awarding Agency: Department of Agriculture

Start Date: 2020-06-02

End Date: 2020-10-06

Contract Duration: 126 days

Daily Burn Rate: $212.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000006994/4100020716/PORK CAN-24/24 OZ,BEEF CAN-24/24 OZ

Place of Performance

Location: PLAINVIEW, WABASHA County, MINNESOTA, 55964

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $26.8 million to LAKESIDE FOODS INC for work described as: 2000006994/4100020716/PORK CAN-24/24 OZ,BEEF CAN-24/24 OZ Key points: 1. Contract awarded for canned meat products, indicating a need for preserved food supplies. 2. The contract was awarded under full and open competition, suggesting a robust bidding process. 3. The duration of the contract is 126 days, pointing to a short-term supply need. 4. The contract type is a firm fixed price, which helps in budget predictability. 5. The award amount of $26.8 million represents a significant investment in food procurement. 6. The North American Industry Classification System (NAICS) code 311611 relates to animal slaughtering, providing context for the product type.

Value Assessment

Rating: fair

The contract value of $26.8 million for canned meat products appears substantial. Without specific details on the quantity and type of meat, a direct comparison to similar contracts is challenging. However, the firm fixed-price nature suggests the government aimed to control costs. The benchmark for 'value for money' would depend heavily on the unit price of the canned meat and its quality compared to market rates or historical government purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bidders (no: 2) suggests a moderate level of competition for this specific procurement. While competition is generally positive, a higher number of bidders could potentially lead to more aggressive pricing and a wider selection of offerings.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best prices, potentially leading to cost savings for the government.

Public Impact

The primary beneficiaries of this contract are likely the recipients of the canned meat products, potentially including military personnel, disaster relief efforts, or food assistance programs. The services delivered involve the supply of canned beef and pork, essential for food security and sustenance. The geographic impact is not specified but likely relates to distribution points within the United States or potentially overseas if for deployed personnel. Workforce implications would be within the food processing and manufacturing sector, supporting jobs at Lakeside Foods Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw materials impacting the fixed price over the contract duration.
Dependence on a single supplier (Lakeside Foods Inc.) for a critical food supply could pose a risk if production is interrupted.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award through full and open competition suggests a competitive bidding process was utilized.
The contract is for a defined period, limiting long-term financial commitment.

Sector Analysis

This contract falls within the food manufacturing and processing sector, specifically related to meat products. The market for government food procurement is substantial, with agencies like the Department of Agriculture frequently purchasing provisions for various programs. Comparable spending benchmarks would involve analyzing other large-scale contracts for preserved food items, considering factors like quantity, type of food, and delivery requirements.

Small Business Impact

The contract was not set aside for small businesses (ss: false, sb: false). This indicates that the procurement was open to all eligible businesses, and the primary awardee, Lakeside Foods Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award, suggesting that the primary focus was on fulfilling the large-scale requirement directly.

Oversight & Accountability

Oversight for this contract would typically be managed by the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures would include adherence to the contract's terms, specifications, and delivery schedules. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Food Procurement
Federal Prison System Food Services
National School Lunch Program
Disaster Relief Food Supplies

Risk Flags

Limited competition (2 bidders)
Potential for raw material price volatility impacting fixed price

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $26.8 million to LAKESIDE FOODS INC. 2000006994/4100020716/PORK CAN-24/24 OZ,BEEF CAN-24/24 OZ

Who is the contractor on this award?

The obligated recipient is LAKESIDE FOODS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.8 million.

What is the period of performance?

Start: 2020-06-02. End: 2020-10-06.

What is the historical spending pattern of the Department of Agriculture on canned meat products?

Analyzing historical spending patterns for canned meat products by the Department of Agriculture requires access to comprehensive procurement data over several fiscal years. This would involve identifying similar contracts awarded for canned beef and pork, noting the quantities, unit prices, and awardees. Trends in spending could reveal fluctuations based on program needs, commodity prices, or changes in federal food assistance policies. For instance, increased spending might correlate with heightened disaster relief efforts or shifts in dietary guidelines. Conversely, a decrease could indicate a move towards fresh or frozen alternatives where feasible, or a reduction in overall program scope. Without specific historical data for this exact product category, it's difficult to provide precise figures, but such analysis is crucial for understanding the long-term commitment and potential future needs of the agency in this area.

How does the unit cost of the canned meat products in this contract compare to market rates?

To assess the unit cost against market rates, we would need the exact quantity of canned meat (e.g., number of 24 oz cans) and the total contract value. The provided data indicates a total award of $26,801,116.20 for 'PORK CAN-24/24 OZ,BEEF CAN-24/24 OZ'. If we assume a certain mix and quantity of these cans, we could derive a per-can or per-pound cost. For example, if the contract was for 1 million cans of beef and 1 million cans of pork, the average cost per can would be approximately $13.40. Comparing this to retail prices for similar canned meats (which can range from $3-$8 per can depending on brand and type) or wholesale prices would be necessary. Government contracts often achieve lower prices due to bulk purchasing power, but significant deviations from market rates, even at wholesale, could indicate issues with pricing or competition. Without the precise quantity breakdown, a definitive comparison is not possible.

What is the track record of Lakeside Foods Inc. in fulfilling government contracts?

Lakeside Foods Inc. has a history of receiving government contracts, particularly with agencies like the Department of Agriculture. Their track record typically involves supplying various food products, including canned goods. Analyzing past performance would involve reviewing contract completion data, any instances of late deliveries, quality control issues, or contract disputes. A review of public databases often shows consistent awards, suggesting a generally reliable performance. However, a deeper dive into specific contract performance metrics, such as on-time delivery rates and adherence to specifications, would provide a more nuanced understanding of their capabilities and reliability as a government supplier. Their ability to secure a contract of this magnitude ($26.8 million) implies a demonstrated capacity to meet large-scale federal requirements.

What are the potential risks associated with a firm fixed-price contract for perishable or processed goods?

Firm fixed-price (FFP) contracts offer cost certainty to the government but can introduce risks for the contractor, especially with processed goods like canned meat. If the cost of raw materials (livestock, processing, canning supplies) increases significantly after the contract is awarded, Lakeside Foods Inc. might face reduced profit margins or even losses, as they are obligated to deliver at the agreed-upon price. Conversely, if raw material costs decrease, the contractor benefits. For the government, the primary risk with FFP is that the contractor may cut corners on quality to maintain profitability if costs rise unexpectedly, although quality specifications are typically stringent. Another risk is that the contractor might not be incentivized to innovate or improve efficiency beyond what is necessary to meet the contract terms, as the profit is fixed.

How does the competition level (2 bidders) impact the value for money in this contract?

A competition level of two bidders suggests a moderate degree of market interest for this specific procurement. While any competition is generally better than a sole-source award, having only two bidders might limit the potential for achieving the most aggressive pricing. With more bidders, the pressure to offer lower prices and better terms increases. In this case, the government secured the contract through full and open competition, indicating that the process was fair and accessible. However, the limited number of bids could mean that the price achieved, while competitive among the two, might not represent the absolute lowest possible price the market could offer if more suppliers had participated. Evaluating the final price against benchmarks and the contractor's historical pricing would be key to determining the true value for money.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Animal (except Poultry) Slaughtering

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1420B0444/4100020716

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lakeside Foods, Inc.

Address: 808 HAMILTON ST, MANITOWOC, WI, 54220

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: $26,801,116

Exercised Options: $26,801,116

Current Obligation: $26,801,116

Actual Outlays: $16,392,721

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline