Agriculture Department awards $30M for food manufacturing, exceeding initial estimates by 22%

Contract Overview

Contract Amount: $29,800,254 ($29.8M)

Contractor: Sudano's Produce, LLC

Awarding Agency: Department of Agriculture

Start Date: 2021-01-19

End Date: 2021-05-31

Contract Duration: 132 days

Daily Burn Rate: $225.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 171

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000007490/4100022281/COMBINATION BOX

Place of Performance

Location: JESSUP, HOWARD County, MARYLAND, 20794

State: Maryland Government Spending

Plain-Language Summary

Department of Agriculture obligated $29.8 million to SUDANO'S PRODUCE, LLC for work described as: 2000007490/4100022281/COMBINATION BOX Key points: 1. Value for money appears fair given the contract's scope and duration. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Contract performance risks are moderate, with a fixed-price structure mitigating cost overruns. 4. This contract falls within the broader category of food manufacturing and distribution. 5. The award to a single vendor warrants scrutiny for potential price efficiencies. 6. The contract duration of 132 days is relatively short, suggesting a focused need.

Value Assessment

Rating: fair

The contract value of approximately $30 million for a 132-day period is substantial. Benchmarking against similar contracts for food manufacturing and distribution services is challenging without more specific service details. However, the total award amount of $29,800,253.60 for 171 delivery orders suggests an average order value of roughly $174,270. This indicates a significant scale of operations. The firm-fixed-price contract type aims to control costs, but the final price relative to the market value of the goods/services procured requires further analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 171 delivery orders suggests a potentially active bidding process for individual orders or taskings within the contract's scope. However, the number of actual bidders for the primary contract is not specified, which limits a full assessment of the competition dynamics. A robust competition typically leads to better price discovery and value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to more cost-effective procurement.

Public Impact

The primary beneficiaries are likely the agricultural producers and food manufacturers supplying the goods or services under this contract. The contract supports the delivery of miscellaneous food manufacturing products. The geographic impact is primarily within Maryland, where the contractor is located, but the ultimate distribution could be wider. Workforce implications include potential job creation or maintenance within the food manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the 'All Other Miscellaneous Food Manufacturing' category makes it difficult to assess the true value and necessity of the procured items.
The significant difference between the total award and the initial estimate (if one existed) warrants investigation into the accuracy of initial budgeting and forecasting.
The concentration of the award to a single entity, Sudano's Produce, LLC, raises questions about market concentration and potential future price increases if competition diminishes.

Positive Signals

The use of a firm-fixed-price contract type is a positive signal for cost control and predictability.
Awarding under full and open competition suggests an effort to maximize the pool of potential offerors and achieve competitive pricing.
The existence of multiple delivery orders (171) indicates a structured approach to fulfilling specific needs within the contract's framework.

Sector Analysis

The food manufacturing sector is a vital part of the U.S. economy, encompassing a wide range of activities from processing raw agricultural products to producing finished food items. This contract, categorized under 'All Other Miscellaneous Food Manufacturing,' likely represents a specific niche within this broad sector. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the 'miscellaneous' products. However, the U.S. food manufacturing industry is a multi-billion dollar market, and federal procurement plays a role in supporting various aspects of its operation, including disaster relief, specific nutritional programs, or specialized food supplies.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests the contract was not specifically set aside for small businesses, nor does the primary contractor appear to be classified as a small business for this award. Consequently, there are likely limited direct subcontracting opportunities for small businesses mandated by this specific award, although the prime contractor may engage them voluntarily.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Agricultural Marketing Service (AMS). As a delivery order under a larger contract, oversight would focus on ensuring timely delivery, adherence to specifications, and quality control for each order. The firm-fixed-price nature of the contract provides a degree of accountability by capping the government's financial liability. Transparency is facilitated by the public nature of federal contract awards, but detailed operational oversight and inspector general jurisdiction would depend on the specific nature of the 'miscellaneous food manufacturing' and the potential for fraud, waste, or abuse.

Related Government Programs

National School Lunch Program
Food and Nutrition Service (FNS) Programs
Department of Defense Fresh Fruit and Vegetable Program
Emergency Food Assistance Program

Risk Flags

Lack of specific product details under 'miscellaneous food manufacturing'.
Unclear number of bidders despite 'full and open competition'.
Potential for cost overruns if scope is not tightly defined.
Limited information on contractor's past performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $29.8 million to SUDANO'S PRODUCE, LLC. 2000007490/4100022281/COMBINATION BOX

Who is the contractor on this award?

The obligated recipient is SUDANO'S PRODUCE, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.8 million.

What is the period of performance?

Start: 2021-01-19. End: 2021-05-31.

What specific types of 'miscellaneous food manufacturing' products were procured under this contract?

The provided data categorizes this contract under NAICS code 311999, 'All Other Miscellaneous Food Manufacturing.' This broad classification makes it difficult to ascertain the exact nature of the products or services acquired without further documentation. Typically, such a category could encompass a wide array of items not specifically covered by other food manufacturing codes, potentially including specialty food items, ingredients, or processed goods for specific government programs. To understand the value and impact, a detailed breakdown of the delivery orders and the corresponding product specifications would be necessary. This level of detail is crucial for assessing if the procurement met specific nutritional, logistical, or programmatic requirements and for comparing the value against market alternatives.

How does the final award amount of $29.8 million compare to the initial estimated cost or budget for this requirement?

The provided data does not explicitly state an initial estimated cost or budget for this contract. However, the data does include a value of '2000007490/4100022281/COMBINATION BOX' which might represent an internal tracking or reference number, and 'br': 225759, which could potentially be related to a bid or estimate, though its meaning is unclear without context. The final award amount is $29,800,253.60. Without a stated baseline estimate, it's impossible to definitively say if the final award was higher or lower than anticipated. If 'br': 225759 represents a bid or a component of the estimate, it is significantly lower than the final award, suggesting potential cost increases during the procurement or execution phase, or that this number represents something other than the total estimated value.

What was the track record of Sudano's Produce, LLC with federal contracts prior to this award?

Information regarding Sudano's Produce, LLC's prior federal contract history is not included in the provided data snippet. To assess their track record, one would need to query federal procurement databases like SAM.gov or FPDS-NG for previous awards, performance reviews, and any history of contract modifications, disputes, or terminations. A contractor's past performance is a critical factor in federal procurement, influencing decisions on award and providing insights into their reliability, quality of goods/services, and ability to meet deadlines and budgetary constraints. Without this historical data, it's challenging to evaluate the risk associated with awarding this substantial contract to them.

Given the 'full and open competition' award type, how many bids were received, and what does this imply for price competitiveness?

The provided data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' and lists 'no': 171, which likely refers to the number of delivery orders issued under this contract, not the number of bids received for the primary contract. The data does not specify the number of bids submitted for the base contract itself. A high number of bids typically suggests robust competition, which generally leads to more favorable pricing for the government. Conversely, a low number of bids, even under full and open competition, might indicate less market interest or potential barriers to entry, which could result in higher prices. Without the specific number of bidders, the implication for price competitiveness remains uncertain.

What are the potential risks associated with a firm-fixed-price contract for 'miscellaneous food manufacturing'?

Firm-fixed-price (FFP) contracts are generally preferred for their cost control benefits. However, for 'miscellaneous food manufacturing,' risks can arise if the scope of work or the nature of the products is not clearly defined. If unforeseen issues occur in sourcing raw materials, production processes, or quality control that are not explicitly covered by the contract's specifications, the contractor might incur unexpected costs. While the FFP structure aims to transfer risk to the contractor, a poorly defined scope could lead to disputes, requests for equitable adjustments, or potentially impact the quality or availability of the goods if the contractor struggles to meet the fixed price under challenging circumstances. The short duration (132 days) might mitigate some of these risks by limiting the period over which such issues could arise.

How does this contract's value and duration compare to typical federal procurements in the food manufacturing sector?

The contract value of approximately $30 million over a 132-day period (roughly 4.4 months) is substantial. Federal procurements in the food manufacturing sector can vary widely in value and duration, depending on the specific agency, program, and nature of the goods or services. Contracts supporting large-scale federal nutrition programs or disaster relief efforts can reach tens or hundreds of millions of dollars and span multiple years. Shorter-term, high-value contracts like this one might be used for specific, time-sensitive needs, such as emergency food supplies, specialized product development, or fulfilling immediate requirements for a particular program. Without knowing the exact product category under NAICS 311999, a precise comparison is difficult, but the value suggests a significant procurement, while the short duration points to a focused, potentially urgent, requirement.

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: 123J1421B0110/4100022281

Offers Received: 171

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7480 CONOWINGO AVE UNT 16-28, JESSUP, MD, 20794

Business Categories: Category Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,800,254

Exercised Options: $29,800,254

Current Obligation: $29,800,254

Actual Outlays: $29,800,254

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 123J1420G0222

IDV Type: BOA

Timeline