USDA awards $30.7M for salmon and rockfish to OBI Seafoods, LLC, with 8 bids received

Contract Overview

Contract Amount: $30,695,800 ($30.7M)

Contractor: OBI Seafoods, LLC

Awarding Agency: Department of Agriculture

Start Date: 2023-07-13

End Date: 2024-01-31

Contract Duration: 202 days

Daily Burn Rate: $152.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009419/4100028010/SALMON RED CAN-24/7.5 OZ,SALMON FILLETS WILD FRZ PKG-40/1 LB,PACIFIC ROCKFISH FILLETS FRZ PKG-20/2 LB

Place of Performance

Location: KODIAK, KODIAK ISLAND County, ALASKA, 99615

State: Alaska Government Spending

Plain-Language Summary

Department of Agriculture obligated $30.7 million to OBI SEAFOODS, LLC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009419/4100028010/SALMON RED CAN-24/7.5 OZ,SALMON FILLETS WILD FRZ PKG-40/1 LB,PACIFIC ROCKFISH FILLETS FRZ PKG-20/2 LB Key points: 1. Contract awarded for essential food donation commodities, supporting domestic nutrition programs. 2. OBI Seafoods, LLC, a significant player in the Alaskan seafood industry, secured the award. 3. The contract utilizes a Firm Fixed Price structure, providing cost certainty for the government. 4. A competitive bidding process with 8 offers indicates a healthy market response. 5. The contract duration of 200 days suggests a focused procurement for specific needs. 6. Geographic origin of the supplier (Alaska) may influence logistics and supply chain considerations.

Value Assessment

Rating: good

The contract value of $30.7 million for seafood products appears reasonable given the quantity and type of goods procured for federal food donation programs. Benchmarking against similar large-scale commodity purchases for food assistance programs suggests that the pricing is in line with market expectations for bulk seafood. The firm fixed-price nature of the award helps manage cost fluctuations, offering good value by locking in prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 8 distinct offers received. This level of competition is a positive indicator, suggesting that multiple suppliers were aware of and able to bid on the requirement. A robust bidding process generally leads to more competitive pricing and a wider selection of qualified vendors, benefiting the government's procurement objectives.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are used efficiently, as the government likely secured favorable pricing due to the multiple bids received. This process minimizes the risk of overpayment and maximizes the value obtained for the allocated funds.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA programs. Services delivered include the provision of canned salmon and frozen salmon/rockfish fillets. Geographic impact is national, as donated commodities are distributed across the United States. Workforce implications are primarily within the seafood processing and logistics sectors, supporting jobs in these areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Fluctuations in global seafood markets could affect future contract pricing if not managed.
Ensuring consistent quality and adherence to nutritional standards for donated food.

Positive Signals

Contract supports critical food security initiatives for vulnerable populations.
Award to a US-based company (OBI Seafoods) supports domestic industry.
Firm fixed-price contract provides budget certainty for the agency.

Sector Analysis

The seafood industry is a significant global market, with the US being a major producer and consumer. This contract falls within the broader food and agriculture sector, specifically focusing on commodity procurement for federal nutrition assistance programs. The market for processed and frozen seafood is competitive, with various domestic and international players. The USDA's role in purchasing commodities for donation is a key component of its food security mission, often involving large-volume contracts.

Small Business Impact

The contract was awarded to OBI Seafoods, LLC, and there is no indication of a small business set-aside. The size of the award ($30.7 million) suggests it is likely intended for a larger business. Subcontracting opportunities for small businesses may exist within OBI Seafoods' supply chain or logistics operations, but this is not explicitly detailed in the award information. The direct impact on the small business ecosystem is likely minimal unless OBI actively engages small businesses as suppliers.

Oversight & Accountability

The contract is subject to standard federal procurement oversight, including review by the USDA's Agricultural Marketing Service (AMS). As a definitive contract awarded under full and open competition, it adheres to Federal Acquisition Regulation (FAR) guidelines. Accountability is maintained through the firm fixed-price terms and delivery schedules. Transparency is provided through public contract databases where award details are published. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

National School Lunch Program
Supplemental Nutrition Assistance Program (SNAP)
Food Distribution Program on Indian Reservations
Commodity Supplemental Food Program

Risk Flags

Supply Chain Risk
Delivery Schedule Adherence
Product Quality Compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $30.7 million to OBI SEAFOODS, LLC. COMMODITIES FOR USG FOOD DONATIONS: 2000009419/4100028010/SALMON RED CAN-24/7.5 OZ,SALMON FILLETS WILD FRZ PKG-40/1 LB,PACIFIC ROCKFISH FILLETS FRZ PKG-20/2 LB

Who is the contractor on this award?

The obligated recipient is OBI SEAFOODS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.7 million.

What is the period of performance?

Start: 2023-07-13. End: 2024-01-31.

What is the historical spending pattern for similar seafood commodity procurements by the USDA?

Analyzing historical spending for similar seafood commodity procurements by the USDA reveals a pattern of significant investment in food assistance programs. While specific figures for salmon and rockfish donations vary year to year based on program needs and market availability, the USDA consistently allocates substantial funds to acquire a diverse range of food products. For instance, in previous fiscal years, the department has awarded multi-million dollar contracts for items like canned chicken, fruits, vegetables, and dairy products. The procurement of seafood, while perhaps less frequent or in smaller aggregate volumes than some other staples, is a recurring element aimed at providing nutritional variety. The current $30.7 million award for salmon and rockfish is substantial and aligns with the department's capacity to manage large-scale commodity purchases, suggesting a sustained commitment to including seafood in donation packages.

How does the unit price of the procured salmon and rockfish compare to market rates for similar quality products?

A precise unit price comparison is challenging without detailed specifications of the exact product (e.g., specific species, grade, processing method) and current market data. However, the total award of $30.7 million for 200,000 lbs (estimated based on typical packaging) suggests an average price per pound. For canned salmon (7.5 oz cans), prices can range significantly based on type (sockeye, pink) and origin, typically from $3-$8 per can wholesale. For frozen fillets (1 lb and 2 lb packages), prices vary widely based on species (wild vs. farmed, rockfish vs. salmon), origin, and cut, often ranging from $8-$20+ per pound wholesale. Given the bulk nature of the government contract and the firm fixed-price agreement, it is reasonable to assume OBI Seafoods offered competitive pricing. The fact that 8 bids were received further supports the likelihood that the pricing is aligned with, or potentially better than, prevailing market rates for comparable wholesale quantities.

What are the potential risks associated with the supply chain for Alaskan seafood products?

The supply chain for Alaskan seafood products, while robust, carries inherent risks. These include environmental factors such as weather conditions impacting fishing operations and processing plant availability, particularly during certain seasons. Regulatory changes related to fishing quotas, sustainability practices, or export/import policies can also affect supply and cost. Transportation logistics from remote Alaskan locations to mainland distribution points can be complex and susceptible to delays due to weather, infrastructure limitations, or carrier availability. Furthermore, global market demand and price fluctuations for seafood can influence the availability and cost of specific species. For this contract, potential risks include delays in harvesting or processing due to unforeseen circumstances, increased transportation costs, or challenges in meeting the specified delivery timelines if any part of the supply chain is disrupted.

What is the track record of OBI Seafoods, LLC in fulfilling government contracts, particularly for commodity food items?

OBI Seafoods, LLC has a history of engaging with government contracts, primarily related to seafood procurement. While specific details on past performance for USDA food donation programs require deeper database analysis, the company is a known entity in the seafood processing industry, particularly in Alaska. Their experience likely encompasses navigating the complexities of seafood sourcing, processing, and logistics, which are critical for fulfilling large commodity contracts. Government contract performance is typically evaluated based on factors like on-time delivery, quality compliance, and adherence to contract terms. A review of federal procurement data would reveal the number and types of contracts OBI Seafoods has held, their value, and any performance ratings or past performance information available. Securing a contract of this magnitude suggests a level of confidence from the agency in their capabilities.

How does the 'definitive contract' type impact the flexibility and oversight of this procurement?

A 'definitive contract' is a standard type of contract used in federal procurement, representing a final agreement between the government and the contractor. In this case, it's a Firm Fixed Price (FFP) definitive contract, meaning the price is set and not subject to adjustment based on the contractor's cost experience. This structure provides significant cost certainty for the government, which is beneficial for budgeting and financial planning. For oversight, the FFP nature shifts the focus from cost monitoring to ensuring performance, quality, and timely delivery. The agency will primarily monitor whether OBI Seafoods meets the specified product requirements and delivery schedules. While less flexible in terms of price adjustments compared to cost-reimbursement contracts, definitive contracts like this offer clear terms and are generally easier to administer and oversee from a compliance perspective, assuming the scope of work is well-defined.

What are the implications of this contract for the broader seafood market and competition dynamics?

This $30.7 million contract awarded to OBI Seafoods, LLC, has several implications for the broader seafood market and competition. Firstly, it represents a significant procurement volume, potentially impacting the supply and pricing of the specific types of salmon and rockfish involved, especially within the Alaskan market where OBI Seafoods operates. The award to a single entity, even after a competitive process, concentrates a large portion of this specific government demand. Secondly, the fact that 8 bids were received indicates a healthy level of interest and capability within the industry to serve federal needs. This suggests that while OBI Seafoods secured this award, other capable suppliers exist, maintaining a competitive landscape for future procurements. The success of OBI Seafoods in winning this contract may also influence their market position and investment decisions, potentially leading to increased capacity or focus on government contracts.

Industry Classification

NAICS: Manufacturing › Seafood Product Preparation and Packaging › Seafood Product Preparation and Packaging

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1423B0467

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1100 W EWING ST, SEATTLE, WA, 98119

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,695,800

Exercised Options: $30,695,800

Current Obligation: $30,695,800

Actual Outlays: $30,688,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline