USDA awards $59.8M contract for roasted pistachios to Stutz Packing Company under full and open competition

Contract Overview

Contract Amount: $59,848,873 ($59.8M)

Contractor: Stutz Packing Company

Awarding Agency: Department of Agriculture

Start Date: 2023-06-14

End Date: 2024-01-08

Contract Duration: 208 days

Daily Burn Rate: $287.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009369/4100027834/PISTACHIO ROASTED IN SHELL PKG-25/1 LB

Place of Performance

Location: INDIO, RIVERSIDE County, CALIFORNIA, 92201

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $59.8 million to STUTZ PACKING COMPANY for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009369/4100027834/PISTACHIO ROASTED IN SHELL PKG-25/1 LB Key points: 1. Contract value of $59.8M for roasted pistachios indicates significant demand for food commodities. 2. Full and open competition suggests a competitive bidding process, potentially leading to favorable pricing. 3. The contract duration of 208 days (approx. 7 months) allows for consistent supply. 4. Award to Stutz Packing Company, a manufacturer of roasted nuts, suggests specialized capability. 5. The use of a firm-fixed-price contract shifts cost risk to the contractor. 6. Geographic location in California may offer logistical advantages for sourcing pistachios.

Value Assessment

Rating: good

The contract value of $59.8 million for roasted pistachios appears substantial, reflecting the scale of government food donation programs. Benchmarking this against similar large-scale commodity procurements for food aid would provide further context on value for money. The firm-fixed-price structure suggests that the government has secured a set price, mitigating potential cost overruns. However, without specific per-unit cost data or comparisons to commercial market prices for bulk roasted pistachios, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial solicitations might have had restrictions, the final award was made after a broad competitive process. The number of bidders is not specified, but the 'full and open' nature suggests multiple interested parties were likely considered. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces. This approach maximizes the purchasing power of federal funds allocated for food donations.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. The service delivered is the provision of roasted, in-shell pistachios as a nutritious food commodity. The geographic impact is national, supporting food banks and distribution networks across the United States. Workforce implications are primarily within the agricultural and food processing sectors, supporting jobs in cultivation, processing, and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the pistachio market impacting long-term value if not adequately hedged by the contractor.
Dependence on a single contractor for a significant quantity of a specific commodity could pose supply chain risks.
Ensuring consistent quality and adherence to nutritional standards throughout the contract period requires diligent oversight.

Positive Signals

Award under full and open competition suggests a robust market and competitive pricing.
Firm-fixed-price contract provides cost certainty for the government.
Contractor's specialization in roasted nuts indicates relevant expertise and operational capacity.
The significant contract value implies the contractor has the scale to fulfill large orders efficiently.

Sector Analysis

The procurement falls within the broader agricultural commodities sector, specifically focusing on processed nuts. The market for nuts, including pistachios, is influenced by agricultural yields, global demand, and trade policies. Government procurements for food donations represent a stable, albeit specialized, segment of this market, often requiring large volumes and specific packaging. Comparable spending benchmarks would involve analyzing other large-scale food commodity contracts awarded by agencies like the USDA for domestic or international food assistance programs.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb: false). As a large-value commodity contract, it is likely that the prime contractor, Stutz Packing Company, is a larger entity. There is no explicit information on subcontracting plans for small businesses. However, large prime contractors often engage small businesses for various support services or specialized components within their supply chain, though this is not guaranteed without specific subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily reside with the USDA's Agricultural Marketing Service (AMS), the awarding agency. Mechanisms likely include regular performance reviews, quality inspections of the delivered product, and financial audits to ensure compliance with the firm-fixed-price terms. Transparency is facilitated by the Federal Procurement Data System (FPDS), which records contract actions. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USDA Food Purchase Programs
Commodity Supplemental Food Program
National School Lunch Program (commodity purchases)
Food Bank Network Support
Agricultural Marketing Service (AMS) Procurements

Risk Flags

Potential for supply chain disruption
Price volatility in agricultural commodities
Quality control adherence
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $59.8 million to STUTZ PACKING COMPANY. COMMODITIES FOR USG FOOD DONATIONS: 2000009369/4100027834/PISTACHIO ROASTED IN SHELL PKG-25/1 LB

Who is the contractor on this award?

The obligated recipient is STUTZ PACKING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $59.8 million.

What is the period of performance?

Start: 2023-06-14. End: 2024-01-08.

What is Stutz Packing Company's track record with federal contracts, particularly with the USDA?

Reviewing the Federal Procurement Data System (FPDS) for Stutz Packing Company reveals past federal contract awards. While this specific contract (2000009369/4100027834) is a significant award, further analysis would involve examining the volume, value, and performance history of their previous contracts. This includes checking for any past performance issues, contract modifications, or disputes. Understanding their history with the USDA specifically would indicate their familiarity with the agency's requirements and processes for commodity procurement, especially for food donation programs.

How does the per-pound cost of these pistachios compare to commercial market rates or similar government purchases?

The total award amount is $59,848,873.42 for an unspecified quantity of 'PISTACHIO ROASTED IN SHELL PKG-25/1 LB'. To compare per-pound costs, the total weight of pistachios procured under this contract is needed. Assuming the 'PKG-25/1 LB' refers to 25-pound packages, this would imply a significant quantity. Without the exact quantity or weight, a direct per-pound cost comparison is impossible. However, if the quantity were known, it could be benchmarked against average wholesale prices for roasted pistachios and against per-unit costs from previous USDA food purchase contracts to assess value for money.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential supply chain disruptions (e.g., crop failures affecting pistachio availability), price volatility in the nut market, and quality control issues. Mitigation strategies likely involve the firm-fixed-price structure, which transfers some price risk to the contractor. The contract duration (208 days) allows for phased delivery, potentially reducing immediate supply pressure. The USDA's Agricultural Marketing Service (AMS) would implement quality assurance protocols and performance monitoring to ensure adherence to specifications. Furthermore, the 'full and open competition' suggests a robust market, reducing reliance on a single source.

What is the expected impact of this contract on the availability of food assistance resources?

This contract is expected to significantly bolster the supply of nutritious food items available through USDA donation programs. By securing a large quantity of roasted pistachios, the USDA enhances the variety and nutritional content of food packages distributed to beneficiaries, such as low-income families and individuals facing food insecurity. The successful execution of this contract contributes directly to the agency's mission of alleviating hunger and improving access to healthy food options across the nation.

How does this contract's value compare to historical USDA spending on similar commodity procurements?

The $59.8 million award for roasted pistachios is a substantial sum, indicative of a large-scale procurement. To contextualize this, historical spending data from the USDA's food purchase programs would be reviewed. This would involve comparing the value against previous awards for nuts, dried fruits, or other high-value commodities. Analyzing trends in spending for food donations over several fiscal years can reveal whether this contract represents an increase, decrease, or stable level of investment in such items, helping to understand the program's scale and priorities.

What are the specific quality and nutritional standards required for the pistachios under this contract?

While the provided data does not detail the specific quality and nutritional standards, government contracts for food commodities typically include stringent requirements. These usually encompass aspects like grade standards (e.g., USDA Grade AA or equivalent), moisture content, absence of defects, packaging integrity, and adherence to food safety regulations (e.g., HACCP). Nutritional information, such as protein, fat, and vitamin content, would also be specified. The Agricultural Marketing Service (AMS) would have detailed specifications within the contract solicitation and award documents to ensure the procured pistachios meet the intended dietary needs for recipients.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › Roasted Nuts and Peanut Butter Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1423B0440

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 82689 AVENUE 45, INDIO, CA, 92201

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,848,873

Exercised Options: $59,848,873

Current Obligation: $59,848,873

Actual Outlays: $59,839,707

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline