USDA's $25.8M contract with Jennie-O for frozen turkey products to support food donations

Contract Overview

Contract Amount: $25,849,207 ($25.8M)

Contractor: Jennie-O Turkey Store Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-05-24

End Date: 2023-11-15

Contract Duration: 175 days

Daily Burn Rate: $147.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009286/4100027637/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY HAM SMKD SLC FRZ PKG-8/5 LB,TURKEY TACO FILLING CTN-30 LB,TURKEY BREAST DELI FRZ CTN-40 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED

Place of Performance

Location: WILLMAR, KANDIYOHI County, MINNESOTA, 56201

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $25.8 million to JENNIE-O TURKEY STORE INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009286/4100027637/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY HAM SMKD SLC FRZ PKG-8/5 LB,TURKEY TACO FILLING CTN-30 LB,TURKEY BREAST DELI FRZ CTN-40 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED Key points: 1. The contract focuses on various frozen turkey products, including breast, ham, and taco filling. 2. Jennie-O Turkey Store Inc. is the sole awardee, indicating a potential lack of broader market engagement. 3. The contract is for food donations, suggesting a public service or humanitarian objective. 4. The firm fixed-price contract type aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $25.8 million for 175 days of supply appears reasonable for bulk commodity procurement. Benchmarking against similar large-scale food donation contracts would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing.

Taxpayer Impact: The use of taxpayer funds for food donations aims to support vulnerable populations and address food insecurity.

Public Impact

Ensures availability of essential protein sources for food assistance programs. Supports domestic agriculture and food processing industries. Contributes to national food security initiatives. Provides relief to individuals and families facing hunger.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in commodity markets impacting long-term value.
Dependence on a single supplier for a significant volume of goods.

Positive Signals

Firm fixed-price contract mitigates cost overrun risks.
Supports a critical government function of food donation.
Awarded through full and open competition.

Sector Analysis

This contract falls within the agricultural commodities sector, specifically poultry processing. Government procurement in this area often involves large volumes to support domestic feeding programs and disaster relief efforts.

Small Business Impact

While the awardee is a large corporation, the procurement process under full and open competition theoretically allows for small business participation as subcontractors or through prime contracts if they meet requirements.

Oversight & Accountability

The Agricultural Marketing Service (AMS) oversees this contract, ensuring compliance with terms and conditions. Regular reporting and quality checks are standard oversight mechanisms for such procurements.

Related Government Programs

Poultry Processing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Potential supply chain vulnerability due to single awardee.
Commodity price volatility risk.
Limited transparency on specific product unit pricing.
Long-term cost-effectiveness requires ongoing monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $25.8 million to JENNIE-O TURKEY STORE INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009286/4100027637/TURKEY BREAST SMKD SLC FRZ PKG-8/5 LB,TURKEY HAM SMKD SLC FRZ PKG-8/5 LB,TURKEY TACO FILLING CTN-30 LB,TURKEY BREAST DELI FRZ CTN-40 LB,TURKEY ROASTS FRZ CTN-32-48 LB,TURKEY BREAST DELI SLICED

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 $25.8 million.

What is the period of performance?

Start: 2023-05-24. End: 2023-11-15.

What is the unit cost breakdown for the different turkey products to assess value for money?

The provided data does not include a detailed unit cost breakdown for each specific turkey product. While the total contract value is $25.8 million over 175 days, understanding the per-pound cost for items like turkey breast, ham, and taco filling would allow for a more granular assessment of value and comparison against market rates.

What are the risks associated with relying on a single supplier for such a large quantity of food commodities?

Relying on Jennie-O Turkey Store Inc. as the sole supplier for 200,009,286 units of turkey products presents risks such as supply chain disruptions due to unforeseen events (e.g., disease outbreaks, natural disasters, labor issues) affecting the supplier. It could also limit negotiating power on future contracts if competition is not consistently fostered.

How effectively does this procurement meet the objective of supporting USG food donation programs?

This procurement appears effective in meeting the objective by securing a substantial quantity of turkey products, a key protein source, for donation programs. The firm fixed-price contract and full and open competition suggest a structured approach to ensuring supply and managing costs, contributing to the program's reliability and reach.

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: 123J1423B0363

Offers Received: 6

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,849,207

Exercised Options: $25,849,207

Current Obligation: $25,849,207

Actual Outlays: $25,849,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline