USDA awards $3.28M for frozen turkey products to Jennie-O Turkey Store Inc

Contract Overview

Contract Amount: $3,277,610 ($3.3M)

Contractor: Jennie-O Turkey Store Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-01-26

End Date: 2023-06-30

Contract Duration: 155 days

Daily Burn Rate: $21.1K/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: 2000009018/4100026845/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED FRZ PKG-8/5 LB

Place of Performance

Location: WILLMAR, KANDIYOHI County, MINNESOTA, 56201

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $3.3 million to JENNIE-O TURKEY STORE INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009018/4100026845/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED FRZ PKG-8/5 LB Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 155 days indicates a short-term need for these commodities. 3. The fixed-price contract type likely provides cost certainty for the government. 4. The awardee, Jennie-O Turkey Store Inc., is a known entity in the poultry market. 5. The specific commodities are for USG food donations, highlighting a humanitarian or aid component. 6. The contract value is relatively modest within the broader context of federal food procurement.

Value Assessment

Rating: good

The contract value of $3.28 million for 155 days of frozen turkey products appears reasonable given the quantity and nature of the goods. Benchmarking against similar commodity contracts for food donations would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract suggests that the government secured a set price, mitigating potential cost overruns.

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 presence of one bid suggests that while the process was open, the number of responsive bidders might have been limited for this specific commodity or timeframe. This level of competition generally promotes price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: A competitive bidding process, even with a single bid, aims to ensure that the government receives fair market value for taxpayer dollars. The open competition framework provides a baseline for pricing that can be compared against future solicitations.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USG donation programs. Services delivered involve the procurement and supply of essential protein sources (frozen turkey products). Geographic impact is primarily within the United States, where the food donations are distributed. Workforce implications are minimal for the government, with the primary labor involved in production and distribution by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition indicated by a single bid could potentially lead to less aggressive pricing than if multiple bids were received.
Short contract duration might necessitate frequent re-solicitation, increasing administrative burden and potential for price fluctuations.

Positive Signals

Award to a known supplier like Jennie-O Turkey Store Inc. suggests reliability and established supply chain capabilities.
Fixed-price contract provides budget certainty for the procuring agency.
Procurement for food donations aligns with governmental humanitarian and social support objectives.

Sector Analysis

This contract falls within the broader food and agriculture sector, specifically focusing on commodity procurement for federal food donation programs. The market for processed poultry products is substantial, with numerous suppliers capable of meeting government specifications. This contract represents a small portion of overall federal food spending, which includes a wide array of agricultural products and services.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary awardee is likely a large business, and the procurement did not specifically aim to leverage the small business industrial base for this particular requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Agriculture's Agricultural Marketing Service. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified goods. Transparency is generally maintained through federal procurement databases where contract awards are recorded.

Related Government Programs

National School Lunch Program
Food Bank Assistance Programs
Commodity Supplemental Food Program
Emergency Food Assistance Program

Risk Flags

Limited competition (1 bid)
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.3 million to JENNIE-O TURKEY STORE INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009018/4100026845/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED FRZ PKG-8/5 LB

Who is the contractor on this award?

The obligated recipient is JENNIE-O TURKEY STORE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.3 million.

What is the period of performance?

Start: 2023-01-26. End: 2023-06-30.

What is the historical spending pattern for similar frozen turkey products by the Department of Agriculture?

Analyzing historical spending data for similar frozen turkey products by the Department of Agriculture (USDA) is crucial for understanding value and consistency. While specific data for this exact contract's duration and type is not provided, the USDA frequently procures large quantities of food commodities for various domestic and international assistance programs. Past awards for turkey products have varied in price based on market conditions, volume, and specific product specifications. For instance, during periods of high demand or supply chain disruptions, prices can fluctuate significantly. Examining previous solicitations and awards for comparable items, such as frozen turkey breasts or roasts, over the past 3-5 years would reveal average per-pound costs and identify any trends in pricing. This historical context helps determine if the $3.28 million award for 155 days represents a fair market price or if it deviates significantly from established benchmarks, potentially indicating either exceptional value or an area for further investigation into cost drivers.

How does the price per pound for these turkey products compare to market rates?

To assess the price per pound for these turkey products, we need to estimate the total quantity procured. The provided data lists specific product types like 'TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB' and 'TURKEY ROASTS FRZ CTN-32-48 LB'. Without the exact quantities of each item, a precise per-pound calculation is challenging. However, if we assume a representative mix and volume, we can derive an approximate cost. For example, if the $3.28 million procured a substantial tonnage of frozen turkey, comparing this to average wholesale or retail prices for similar cuts in the relevant period (January-June 2023) is necessary. Market data from agricultural reports or industry publications can serve as a benchmark. If the contract price per pound is significantly lower than market rates, it suggests excellent value for the government. Conversely, a higher price might indicate potential issues with competition, specifications, or market timing. A detailed breakdown of the awarded quantities for each specific item would be needed for a definitive comparison.

What is the track record of Jennie-O Turkey Store Inc. in fulfilling government contracts?

Jennie-O Turkey Store Inc. is a well-established name in the poultry industry, and their track record in fulfilling government contracts is generally considered robust. As a subsidiary of Hormel Foods, they possess significant production capacity and logistical capabilities necessary for large-scale government procurements. Federal procurement databases typically show a history of awards to Jennie-O for various poultry products, often for agencies like the Department of Defense (DoD) and the USDA, for use in school lunch programs, military bases, and food assistance initiatives. While specific performance metrics for past contracts (e.g., on-time delivery, quality compliance) are not detailed in this award notice, their consistent presence as a bidder and awardee suggests a satisfactory performance history. Any past issues, such as delivery delays or quality control problems, would likely be documented in contract performance reports, which are not publicly detailed here but are accessible to contracting officers for future source selection.

What are the potential risks associated with procuring frozen turkey products for food donations?

Procuring frozen turkey products for food donations carries several potential risks. Firstly, **supply chain disruptions** are a significant concern; factors like avian influenza outbreaks, extreme weather events, or transportation issues can impact availability and price. Secondly, **quality control** is paramount; ensuring the frozen products meet safety and nutritional standards throughout the cold chain, from production to distribution, is critical. Improper handling or temperature fluctuations can lead to spoilage and health risks. Thirdly, **price volatility** in the agricultural commodity market means that the cost of turkey can fluctuate, potentially impacting the value of the procurement if not locked in through a fixed-price contract. Fourthly, **logistical challenges** in distributing frozen goods to various donation points can be complex and costly. Finally, **demand forecasting** can be difficult; accurately predicting the need for these specific commodities ensures efficient use of funds and avoids waste.

How does this contract align with the USDA's broader mission regarding food security and agricultural markets?

This contract directly aligns with the USDA's broader mission in several key areas. Firstly, it supports **food security** by providing essential protein sources for vulnerable populations through food donation programs. This addresses immediate nutritional needs and contributes to overall public health. Secondly, it impacts **agricultural markets** by creating demand for turkey products, thereby supporting farmers and processors within the poultry sector. By procuring commodities, the USDA helps stabilize agricultural markets and ensures a consistent outlet for producers. Thirdly, it fulfills the **stewardship responsibilities** of the government in managing agricultural resources and ensuring their availability for public benefit. The procurement process itself, when conducted competitively, also reinforces fair market practices within the agricultural industry.

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: 123J1423B0156

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hormel Foods Corporation

Address: 2505 WILLMAR AVE SW, WILLMAR, MN, 56201

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

Financial Breakdown

Contract Ceiling: $3,277,610

Exercised Options: $3,277,610

Current Obligation: $3,277,610

Actual Outlays: $3,277,610

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline