Agriculture contract for food manufacturing awarded to L.A. Specialty Produce Co. for over $33 million

Contract Overview

Contract Amount: $33,265,221 ($33.3M)

Contractor: L.A. Specialty Produce CO.

Awarding Agency: Department of Agriculture

Start Date: 2020-09-17

End Date: 2020-10-31

Contract Duration: 44 days

Daily Burn Rate: $756.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 53

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000007304/4100021679/COMBINATION BOX

Place of Performance

Location: SANTA FE SPRINGS, LOS ANGELES County, CALIFORNIA, 90670

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $33.3 million to L.A. SPECIALTY PRODUCE CO. for work described as: 2000007304/4100021679/COMBINATION BOX Key points: 1. The contract value represents a significant investment in food manufacturing services. 2. Competition dynamics for this contract were fully open, suggesting a competitive bidding process. 3. The contract duration of 44 days is relatively short for its value, potentially indicating a focused or urgent need. 4. The firm fixed-price contract type suggests predictable costs for the government. 5. The award was made to a single contractor, L.A. Specialty Produce Co. 6. The contract falls under the 'All Other Miscellaneous Food Manufacturing' NAICS code.

Value Assessment

Rating: fair

The contract value of over $33 million for a 44-day period is substantial. Benchmarking this against similar contracts for food manufacturing services is challenging without more specific details on the exact products or services procured. However, the firm fixed-price structure provides cost certainty. The awarded amount appears to be within a reasonable range for large-scale food production, but a detailed cost breakdown would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows 53 offers were received, suggesting a robust level of interest and competition for this procurement. A high number of bidders generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down prices and ensured the government received competitive offers for the food manufacturing services.

Public Impact

The primary beneficiaries are likely the recipients of the food products manufactured under this contract, potentially including government feeding programs or disaster relief efforts. The contract facilitated the manufacturing of miscellaneous food products, contributing to the food supply chain. The geographic impact is centered in California, where the contractor is located. Workforce implications would include employment opportunities at L.A. Specialty Produce Co. and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The short duration relative to the contract value could indicate a potential for rushed production or unforeseen challenges in meeting demand.
Lack of detailed service description makes it difficult to fully assess performance risks.
Reliance on a single awardee for a large sum necessitates close monitoring of delivery and quality.

Positive Signals

Full and open competition with 53 offers received indicates a healthy market and strong contractor interest.
Firm fixed-price contract type provides cost predictability for the government.
Contractor is based in California, a major hub for food production and distribution.

Sector Analysis

The food manufacturing sector is a critical component of the broader agricultural and industrial economy. This contract falls under NAICS code 311999, 'All Other Miscellaneous Food Manufacturing,' which encompasses a wide array of food production activities not classified elsewhere. The market for government food procurement is substantial, driven by needs for military rations, domestic feeding programs, and disaster relief. This contract's value of over $33 million places it as a significant award within this sub-sector.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside. However, the prime contractor, L.A. Specialty Produce Co., may engage small businesses as subcontractors in its supply chain, though this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. Standard contract management procedures, including performance monitoring, quality assurance, and payment verification, would be in place. Transparency is generally maintained through contract award databases like FPDS. Specific Inspector General jurisdiction would depend on the nature of any potential issues or investigations arising from the contract's performance.

Related Government Programs

Department of Agriculture Food Procurement
Federal Food Manufacturing Contracts
Miscellaneous Food Product Contracts
Agricultural Marketing Service Contracts

Risk Flags

Short contract duration relative to value
Lack of specific product details
Potential for cost overruns if contractor underestimates scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $33.3 million to L.A. SPECIALTY PRODUCE CO.. 2000007304/4100021679/COMBINATION BOX

Who is the contractor on this award?

The obligated recipient is L.A. SPECIALTY PRODUCE CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.3 million.

What is the period of performance?

Start: 2020-09-17. End: 2020-10-31.

What specific types of 'Miscellaneous Food Products' were manufactured under this contract?

The provided data identifies the NAICS code as '311999 - All Other Miscellaneous Food Manufacturing,' but does not specify the exact products. This category is broad and can include items like pasta, cereal, sauces, spices, and other processed food items not covered by more specific manufacturing codes. To understand the precise nature of the goods, one would need to consult the detailed contract statement of work or delivery order documentation. Without this, it's difficult to assess the specific utility or impact of the manufactured goods.

How does the awarded amount of $33.2 million compare to typical spending for similar food manufacturing contracts by the USDA?

Comparing this $33.2 million contract to typical USDA food manufacturing spending requires context on the specific product category and duration. For a short-term (44-day) contract, this value is substantial. The USDA procures a wide range of food products, from bulk commodities to specialized items for various programs (e.g., school lunches, food banks, military). Contracts for large-scale, diverse food manufacturing services can easily reach multi-million dollar figures. However, without knowing the exact product mix and volume, a precise benchmark is difficult. The high number of bids (53) suggests the value was competitive within its specific niche.

What are the primary risks associated with a firm fixed-price contract of this magnitude and short duration?

For a firm fixed-price contract of $33.2 million over just 44 days, the primary risks lie in potential contractor underestimation of costs or production capacity. If the contractor misjudges the resources needed, they could incur losses, potentially impacting delivery schedules or quality. Conversely, if the government's requirements are underestimated by the contractor, the price might be higher than necessary. The short duration amplifies these risks, as there is less time to correct course. Ensuring the contractor has robust production capabilities and accurate costings is crucial for mitigating these risks.

What is the track record of L.A. Specialty Produce Co. with federal contracts, particularly with the Department of Agriculture?

Information on L.A. Specialty Produce Co.'s specific track record with federal contracts, especially with the Department of Agriculture, is not detailed in the provided summary data. To assess their performance history, one would need to access federal procurement databases (like FPDS) and analyze past awards, contract values, durations, and any reported performance issues or successes. A review of their past performance would be essential to gauge their reliability and capability in fulfilling large-value, short-term manufacturing contracts.

Given the 'All Other Miscellaneous Food Manufacturing' classification, how does this contract fit into the USDA's broader food procurement strategy?

Contracts under NAICS 311999, like this one, often fulfill specific, sometimes niche, needs within the USDA's vast procurement portfolio. While the USDA buys large volumes of commodity crops and staples, miscellaneous food manufacturing contracts can address requirements for value-added products, specialized dietary needs, or emergency food supplies. This contract likely supports a particular program or initiative requiring these specific manufactured goods. Its value suggests it's not a minor procurement but addresses a significant demand within the USDA's operational requirements.

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: 123J1420B0682/4100021679

Offers Received: 53

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13527 ORDEN DR, SANTA FE SPRINGS, CA, 90670

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

Financial Breakdown

Contract Ceiling: $33,265,221

Exercised Options: $33,265,221

Current Obligation: $33,265,221

Actual Outlays: $33,259,124

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 123J1420G0226

IDV Type: BOA

Timeline