USDA awards $22.2M for canned pork and beef, with 4 bidders competing for a firm-fixed-price contract

Contract Overview

Contract Amount: $22,199,191 ($22.2M)

Contractor: Lakeside Foods Inc

Awarding Agency: Department of Agriculture

Start Date: 2021-05-13

End Date: 2021-09-30

Contract Duration: 140 days

Daily Burn Rate: $158.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000007762/4100023082/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 $22.2 million to LAKESIDE FOODS INC for work described as: 2000007762/4100023082/PORK CAN-24/24 OZ,BEEF CAN-24/24 OZ Key points: 1. The contract value of $22.2 million represents a significant investment in canned meat products. 2. Competition dynamics involved 4 bidders, suggesting a moderately competitive market for these goods. 3. The firm-fixed-price contract type indicates price certainty for the government. 4. Performance is scheduled over 140 days, a relatively short duration for a supply contract. 5. The contract falls within the broader category of food and agricultural products procurement. 6. The award to LAKESIDE FOODS INC highlights a key supplier in this niche.

Value Assessment

Rating: good

The contract value of $22.2 million for canned pork and beef appears reasonable given the quantity and nature of the goods. Benchmarking against similar large-scale food procurements by the USDA suggests that the pricing is likely competitive, especially considering the firm-fixed-price structure which transfers risk to the contractor. The specific unit costs would require further detailed analysis of the product specifications and market fluctuations at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four distinct bidders participating. This level of competition is generally positive, indicating that multiple suppliers were aware of and capable of fulfilling the requirement. The presence of four bidders suggests a healthy market for these specific canned meat products, which likely contributed to achieving a fair market price for the government.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages quality.

Public Impact

The primary beneficiaries are likely the recipients of the food products, potentially including food banks, disaster relief efforts, or military personnel. The services delivered involve the supply of canned pork and beef, essential for food security and nutritional needs. The geographic impact is primarily within Minnesota, where the contractor is located, but the distribution of the food products could be nationwide. Workforce implications include employment at LAKESIDE FOODS INC and potentially its suppliers, supporting jobs in food processing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in raw meat commodities impacting long-term cost-effectiveness.
Ensuring consistent quality and safety standards across large batches of canned goods.
Logistical challenges in distributing perishable or shelf-stable food products nationwide.

Positive Signals

Firm-fixed-price contract provides budget certainty for the agency.
Full and open competition suggests a competitive market and potentially good value.
Award to an established company with a track record in food production.

Sector Analysis

This contract falls within the broader food manufacturing and processing sector, specifically focusing on canned meats. The market for government food procurement is substantial, with agencies like the USDA regularly sourcing a wide variety of food products to support various programs. Comparable spending benchmarks would involve analyzing other large-volume food contracts awarded by federal agencies, considering factors like product type, quantity, and delivery terms.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. There is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem for this specific award appears minimal, though LAKESIDE FOODS INC may engage small businesses in its supply chain.

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 firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though detailed performance monitoring reports are not always publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Defense Logistics Agency Troop Support
Federal Emergency Management Agency (FEMA) Disaster Relief Supplies

Risk Flags

Potential for commodity price fluctuations impacting cost.
Ensuring consistent food safety and quality standards.
Timeliness of delivery within the specified contract period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $22.2 million to LAKESIDE FOODS INC. 2000007762/4100023082/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 $22.2 million.

What is the period of performance?

Start: 2021-05-13. End: 2021-09-30.

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

Historical spending data for canned meat products by the Department of Agriculture can be complex to isolate due to the vast array of food procurement categories. However, agencies like the USDA, particularly through the Agricultural Marketing Service (AMS), frequently procure food items for various programs, including domestic nutrition assistance and international food aid. Analyzing past solicitations and awards for similar canned goods (e.g., canned chicken, canned vegetables) can provide context. For instance, looking at the volume and value of contracts awarded over the past five to ten years for shelf-stable protein sources would reveal trends in demand, pricing, and supplier engagement. This specific $22.2 million award for canned pork and beef suggests a significant, albeit potentially episodic, need for these specific items, possibly tied to specific program requirements or market conditions at the time of the award.

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

Determining the precise unit cost and comparing it to market rates requires access to the detailed specifications of the canned pork and beef (e.g., specific cuts, fat content, can size, preparation method) and the exact quantities awarded. Without this granular data, a direct unit cost comparison is challenging. However, the fact that the contract was awarded under full and open competition with four bidders suggests that the pricing achieved is likely competitive within the market for government food procurement. The firm-fixed-price nature of the contract also implies that the contractor has factored in market risks and costs. To perform a robust comparison, one would need to obtain the bid details and compare the price per ounce or per can against commercial wholesale prices for similar products, adjusted for bulk purchasing and delivery terms.

What are the potential risks associated with the contractor, LAKESIDE FOODS INC, for this contract?

Potential risks associated with LAKESIDE FOODS INC for this contract primarily revolve around supply chain reliability, quality control, and timely delivery. As a producer of canned goods, risks include fluctuations in the cost and availability of raw meat commodities (pork and beef), potential disruptions in their manufacturing process, and ensuring consistent adherence to stringent food safety and quality standards required by the USDA. Given the contract duration of 140 days, timely delivery is crucial. Any delays could impact the intended use of the food products. While the firm-fixed-price contract shifts some financial risk to the contractor, the government still faces risks related to product quality and availability. A review of LAKESIDE FOODS INC's past performance on similar government contracts, if available, would provide further insight into their risk profile.

How effective is the Agricultural Marketing Service (AMS) in procuring food products efficiently?

The Agricultural Marketing Service (AMS) plays a crucial role in procuring food products for various USDA programs, often leveraging its expertise in agricultural markets and commodity purchasing. Its effectiveness is generally considered good, particularly in managing large-scale procurements and ensuring fair market prices through competitive bidding processes. AMS utilizes various contract types, including firm-fixed-price, to manage cost and risk. The agency's ability to procure diverse food items, from fresh produce to processed goods like canned meats, supports critical functions such as nutrition assistance and disaster relief. However, like any large procurement entity, challenges can arise related to market volatility, logistical complexities, and ensuring consistent quality across numerous suppliers and contracts. The success of individual procurements, such as this $22.2 million award, is a testament to AMS's operational capabilities.

What is the typical duration for USDA contracts of this nature, and how does this contract's duration compare?

The duration for USDA contracts involving the supply of processed food items can vary significantly based on the specific program requirements, the nature of the product, and the quantity ordered. Contracts for shelf-stable items like canned goods might range from a few months to over a year, especially if they are part of ongoing food assistance programs or strategic reserves. This particular contract, with a duration of 140 days (approximately 4.5 months), is relatively short for a large-value food procurement. This suggests that the requirement might have been for a specific, time-bound need, such as immediate distribution, a particular event, or a short-term program initiative, rather than a continuous supply over an extended period. Shorter durations can sometimes simplify logistics but may require more frequent re-solicitation if the need is ongoing.

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: 123J1421B0332/4100023082

Offers Received: 4

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: $22,199,191

Exercised Options: $22,199,191

Current Obligation: $22,199,191

Actual Outlays: $22,199,191

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline