USDA Awards $43.7M for Miscellaneous Food Manufacturing, Primarily to M. Palazola Produce Co

Contract Overview

Contract Amount: $43,753,003 ($43.8M)

Contractor: M. Palazola Produce CO.

Awarding Agency: Department of Agriculture

Start Date: 2021-01-19

End Date: 2021-05-31

Contract Duration: 132 days

Daily Burn Rate: $331.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 171

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000007490/4100022294/COMBINATION BOX

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38182

State: Tennessee Government Spending

Plain-Language Summary

Department of Agriculture obligated $43.8 million to M. PALAZOLA PRODUCE CO. for work described as: 2000007490/4100022294/COMBINATION BOX Key points: 1. Significant contract value of $43.7 million for food manufacturing services. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Potential risk related to the broad 'Miscellaneous Food Manufacturing' category. 4. The contract supports the Agricultural Marketing Service within the Department of Agriculture.

Value Assessment

Rating: fair

The contract value of $43.7 million is substantial. Without specific product details or benchmarks for 'All Other Miscellaneous Food Manufacturing,' a precise pricing assessment is difficult. However, the firm fixed-price structure suggests cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The $43.7 million expenditure represents taxpayer funds allocated to food manufacturing. The competitive award process aims to maximize the value derived from this investment.

Public Impact

Ensures the availability of essential food manufacturing services for the Department of Agriculture. Supports agricultural supply chains and potentially local economies where production occurs. The broad category may encompass a wide range of food products, impacting various consumer needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Vague service description ('All Other Miscellaneous Food Manufacturing') could lead to scope creep or unexpected costs.
Lack of specific performance metrics makes it hard to assess effectiveness.
Reliance on a single awardee for a broad category might limit future flexibility.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Firm fixed-price contract provides cost predictability.
Supports critical agricultural and food supply functions.

Sector Analysis

This contract falls under the 'Food Manufacturing' sector, specifically 'All Other Miscellaneous Food Manufacturing.' Spending in this area can vary widely based on government needs for diverse food products, from raw ingredient processing to finished goods.

Small Business Impact

While awarded under full and open competition, the data does not indicate if small businesses participated in or benefited from this contract. Further analysis would be needed to determine small business inclusion.

Oversight & Accountability

The contract was awarded via a delivery order, suggesting it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on ensuring adherence to the contract terms and delivery schedules.

Related Government Programs

All Other Miscellaneous Food Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Lack of specificity in service description.
Potential for scope creep.
Difficulty in performance monitoring.
Unclear small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $43.8 million to M. PALAZOLA PRODUCE CO.. 2000007490/4100022294/COMBINATION BOX

Who is the contractor on this award?

The obligated recipient is M. PALAZOLA 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 $43.8 million.

What is the period of performance?

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

What specific food manufacturing services are included under 'All Other Miscellaneous Food Manufacturing' to justify the $43.7 million cost?

The broad categorization of 'All Other Miscellaneous Food Manufacturing' makes it difficult to ascertain the specific services procured. This could range from basic processing and packaging to specialized food production. A detailed review of the contract's statement of work and any associated task orders would be necessary to understand the precise nature of the services and evaluate their value against the significant expenditure.

What are the potential risks associated with awarding a large sum for a vaguely defined food manufacturing category?

The primary risk lies in the lack of specificity. 'All Other Miscellaneous Food' could encompass a vast array of products and processes, potentially leading to scope creep, cost overruns if not tightly managed, or the procurement of services that do not align with the most critical needs. It also makes performance monitoring and quality assurance more challenging without clear deliverables.

How effectively does the 'full and open competition' method ensure optimal value for this type of broad food manufacturing contract?

Full and open competition is designed to maximize value by encouraging broad participation and price competition. For a contract like this, it likely ensured multiple vendors could bid, potentially driving down costs. However, the effectiveness in achieving optimal value is also dependent on how well the government defined its needs within the solicitation, even within a broad category.

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: 123J1421B0110/4100022294

Offers Received: 171

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2713 CHELSEA AVE, MEMPHIS, TN, 38108

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

Financial Breakdown

Contract Ceiling: $43,753,003

Exercised Options: $43,753,003

Current Obligation: $43,753,003

Actual Outlays: $43,753,003

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 123J1420G0039

IDV Type: BOA

Timeline