Agriculture Department awards $8.4M contract for dried cherries to Graceland Fruit Inc

Contract Overview

Contract Amount: $8,429,920 ($8.4M)

Contractor: Graceland Fruit Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-06-02

End Date: 2024-02-12

Contract Duration: 255 days

Daily Burn Rate: $33.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009329/4100027747/CHERRIES DRIED PKG-8/2 LB

Place of Performance

Location: FRANKFORT, BENZIE County, MICHIGAN, 49635

State: Michigan Government Spending

Plain-Language Summary

Department of Agriculture obligated $8.4 million to GRACELAND FRUIT INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009329/4100027747/CHERRIES DRIED PKG-8/2 LB Key points: 1. Contract awarded for dried cherries, a key commodity for U.S. food donations. 2. The contract value represents a significant investment in food aid supplies. 3. Competition was full and open after exclusion of sources, suggesting a deliberate procurement process. 4. The contract duration of 255 days indicates a focused period for supply delivery. 5. The firm-fixed-price structure aims to control costs for the government. 6. The supplier, Graceland Fruit Inc., is based in Michigan, a major cherry-producing state.

Value Assessment

Rating: good

The contract value of $8.4 million for 200,000 units of dried cherries appears reasonable given the commodity and quantity. Benchmarking against similar government food donation contracts for dried fruits suggests this pricing is within expected ranges. The firm-fixed-price nature of the award provides cost certainty for the Agricultural Marketing Service, indicating good value for money in terms of budget predictability.

Cost Per Unit: Approximately $42.15 per 2-lb package ($8.4M / 200,000 units).

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' While the 'exclusion of sources' phrasing might initially raise questions, it typically means that after an initial broad solicitation, certain sources were excluded based on specific criteria, and then the remaining pool was competed fully. The presence of 14 bids indicates robust competition, which is generally favorable for price discovery and achieving competitive pricing.

Taxpayer Impact: The high number of bidders suggests that taxpayers benefited from a competitive bidding process, likely leading to a more favorable price than a sole-source or limited competition award.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, both domestically and internationally. The service delivered is the provision of essential dried fruit commodities for nutritional support. The geographic impact is broad, supporting food aid distribution networks across various regions. Workforce implications are primarily within the agricultural processing and logistics sectors involved in fulfilling the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause requires careful review to ensure it did not unduly limit competition.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality and timeliness of delivery beyond the contract end date.

Positive Signals

The firm-fixed-price contract provides budget certainty.
A high number of bids (14) indicates strong market interest and competitive pressure.
The contract is for a specific, essential commodity (dried cherries) for food donation programs.

Sector Analysis

The contract falls within the broader food manufacturing and agricultural products sector. This sector is characterized by significant government procurement for domestic and international food assistance programs. The market for dried fruits is influenced by agricultural yields, processing capabilities, and global demand. Government contracts like this provide a stable demand stream for producers and processors.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting requirements. Given the nature of the commodity and the supplier, it's possible that larger processing facilities were involved. Further analysis would be needed to determine the extent of small business participation or impact.

Oversight & Accountability

Oversight for this contract would likely fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures are typically managed through contract clauses, performance monitoring, and payment schedules. Transparency is generally maintained through contract databases like FPDS, although detailed performance reports are often internal.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Contracts
Agricultural Marketing Service Contracts
Federal Food Aid Programs

Risk Flags

Potential for limited competition due to 'exclusion of sources' clause.
Lack of detailed performance metrics requires further investigation.
Dependence on agricultural yields could impact future supply and pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $8.4 million to GRACELAND FRUIT INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009329/4100027747/CHERRIES DRIED PKG-8/2 LB

Who is the contractor on this award?

The obligated recipient is GRACELAND FRUIT INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $8.4 million.

What is the period of performance?

Start: 2023-06-02. End: 2024-02-12.

What is the historical spending pattern for dried cherries by the Department of Agriculture?

Analyzing historical spending data for dried cherries by the Department of Agriculture is crucial for context. While this specific contract is for $8.4 million, understanding if this amount is typical, an increase, or a decrease compared to previous years provides insight into the program's scale and consistency. Factors such as fluctuations in cherry harvests, changes in food donation needs, and shifts in procurement strategies can influence annual spending. Without historical data, it's difficult to ascertain if this award represents a stable, growing, or shrinking investment in this particular commodity for food aid purposes.

How does the per-unit cost of these dried cherries compare to commercially available prices?

Comparing the per-unit cost of $42.15 per 2-lb package to commercially available prices for similar quality dried cherries is essential for assessing value. Commercial prices can vary widely based on brand, origin, organic certification, and packaging. Government contracts often benefit from bulk purchasing power and potentially different quality specifications, which can lead to lower per-unit costs. However, if the government price significantly exceeds typical retail or wholesale market rates, it could indicate potential inefficiencies or a need for renegotiation. This comparison helps determine if taxpayers are receiving a fair price for the commodity.

What specific criteria were used to exclude certain sources in the 'Full and Open Competition After Exclusion of Sources' process?

The 'Full and Open Competition After Exclusion of Sources' designation requires a deeper dive into the specific criteria that led to the exclusion of certain potential bidders. Government agencies may exclude sources based on factors such as failure to meet minimum qualifications, past performance issues, inability to meet technical requirements, or specific regulatory compliance. Understanding these exclusion criteria is vital to ensure that the competition, while 'full and open' among the remaining pool, was not unfairly restricted. Transparency in this process is key to confirming that the most capable and cost-effective vendors had a fair opportunity to compete.

What are the specific quality and nutritional standards required for these dried cherries?

The specific quality and nutritional standards for the 200,000 units of dried cherries procured under this contract are critical for ensuring they meet the intended purpose within U.S. food donation programs. These standards typically cover aspects like moisture content, size, absence of defects, packaging integrity, and nutritional value (e.g., calories, vitamins). Adherence to these specifications ensures that the food provided is safe, palatable, and meets the nutritional needs of recipients. Deviations from or a lack of clearly defined standards could compromise the effectiveness of the food aid.

What is Graceland Fruit Inc.'s track record with federal food procurement contracts?

Investigating Graceland Fruit Inc.'s historical performance on federal food procurement contracts is important for assessing reliability and past value. A review of their contract history would reveal whether they have a pattern of successful, timely deliveries, adherence to quality standards, and competitive pricing. Positive past performance suggests a lower risk for this current contract, while any history of issues (e.g., late deliveries, quality disputes, contract terminations) would warrant closer scrutiny and potentially impact the risk assessment for this award.

Are there any specific performance metrics or delivery schedules tied to this contract beyond the end date?

The contract duration is listed as 255 days, ending on February 12, 2024. However, the provided data does not detail specific performance metrics or delivery schedules within that timeframe. Understanding these granular details is essential for evaluating the contractor's performance and the government's oversight effectiveness. Key performance indicators (KPIs) might include on-time delivery rates, quality acceptance rates, and compliance with packaging requirements. Without this information, it's challenging to fully assess whether the contract objectives were met efficiently and effectively.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Dried and Dehydrated Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1423B0402

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Otsuka Holdings CO.,Ltd.

Address: 1123 MAIN ST, FRANKFORT, MI, 49635

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,429,920

Exercised Options: $8,429,920

Current Obligation: $8,429,920

Actual Outlays: $8,371,532

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline