USDA awards $18.9M contract to Tyson Foods for frozen chicken for food donations

Contract Overview

Contract Amount: $18,920,240 ($18.9M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Agriculture

Start Date: 2022-07-06

End Date: 2023-04-15

Contract Duration: 283 days

Daily Burn Rate: $66.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000008608/4100025789/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB

Place of Performance

Location: NEW HOLLAND, LANCASTER County, PENNSYLVANIA, 17557

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $18.9 million to TYSON FOODS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000008608/4100025789/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB Key points: 1. Tyson Foods secured a significant contract for frozen chicken, highlighting their role in government food programs. 2. The contract value of $18.9M indicates substantial demand for poultry products within federal food assistance initiatives. 3. Competition was full and open, suggesting a competitive bidding process for this commodity purchase. 4. The sector is Food & Agriculture, a critical area for federal procurement supporting domestic needs.

Value Assessment

Rating: good

The contract price of $18.9M for 200,000 lbs of chicken appears reasonable given market rates for bulk frozen poultry. Benchmarking against similar USDA food donation contracts would provide a more precise assessment.

Cost Per Unit: $94.60 per 30lb case

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 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: Taxpayers benefit from competitive pricing achieved through open bidding, ensuring federal funds are used efficiently for food donation programs.

Public Impact

Ensures availability of essential protein for food banks and charitable organizations nationwide. Supports domestic agriculture and food processing industries through government purchasing power. Contributes to food security initiatives by providing nutritious options to vulnerable populations.

Waste & Efficiency Indicators

Waste Risk Score: 67 / 10

Warning Flags

Potential for price fluctuations in commodity markets impacting future contract costs.
Logistical challenges in distributing frozen goods across diverse geographic locations.

Positive Signals

Supports critical food assistance programs.
Awarded through competitive bidding.
Utilizes a firm fixed-price contract to manage cost certainty.

Sector Analysis

This contract falls within the Food and Agriculture sector, specifically commodity procurement for federal nutrition assistance programs. Spending benchmarks for similar food commodities vary widely based on type, quantity, and market conditions.

Small Business Impact

While Tyson Foods is a large corporation, the contract's full and open competition structure allows for participation by smaller businesses if they can meet the scale and specifications, though direct award to a large entity is common for bulk commodities.

Oversight & Accountability

The contract is managed by the Department of Agriculture's Agricultural Marketing Service, which oversees commodity procurement. Oversight ensures compliance with contract terms, quality standards, and timely delivery for federal food donation programs.

Related Government Programs

Poultry Processing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Supply chain vulnerability
Commodity price volatility
Logistical complexity of frozen goods
Potential for disease outbreaks impacting supply

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $18.9 million to TYSON FOODS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000008608/4100025789/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB

Who is the contractor on this award?

The obligated recipient is TYSON 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 $18.9 million.

What is the period of performance?

Start: 2022-07-06. End: 2023-04-15.

What is the historical pricing trend for frozen chicken under similar USDA contracts?

Analyzing historical pricing data for frozen chicken from USDA contracts over the past five years would reveal trends influenced by market volatility, feed costs, and overall demand. This analysis helps determine if the current $18.9M award represents a fair market price or if there are opportunities for cost savings in future solicitations.

What are the primary risks associated with the long-term supply of frozen chicken for federal programs?

Key risks include supply chain disruptions due to disease outbreaks (e.g., avian flu), extreme weather events impacting poultry production, and significant fluctuations in feed grain prices. These factors can lead to price spikes and potential shortages, jeopardizing the consistent availability of chicken for donation programs.

How effectively does this contract support the USDA's mission of food security?

This contract directly supports the USDA's food security mission by procuring a vital protein source for distribution through various food assistance programs. The large volume ensures that numerous individuals and families receive nutritious food, thereby alleviating hunger and improving dietary intake among vulnerable populations.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Poultry Processing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1422B0407

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2200 W DON TYSON PKWY, SPRINGDALE, AR, 72762

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: $18,920,240

Exercised Options: $18,920,240

Current Obligation: $18,920,240

Actual Outlays: $18,920,240

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline