USDA awards $48M for canned beef donations, with Lakeside Foods Inc. securing the contract

Contract Overview

Contract Amount: $48,080,648 ($48.1M)

Contractor: Lakeside Foods Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-08-03

End Date: 2024-06-30

Contract Duration: 332 days

Daily Burn Rate: $144.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009492/4400001826/4100028171/BEEF CAN-24/24 OZ

Place of Performance

Location: PLAINVIEW, WABASHA County, MINNESOTA, 55964

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $48.1 million to LAKESIDE FOODS INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009492/4400001826/4100028171/BEEF CAN-24/24 OZ Key points: 1. Contract value of $48.1M for canned beef products indicates significant investment in food donation programs. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The contract duration of 332 days points to a sustained supply chain for essential food items. 4. Delivery order type suggests flexibility in fulfilling specific needs for food donations. 5. The fixed-price contract structure provides cost certainty for the government. 6. Focus on canned beef highlights a specific nutritional need within the food donation program.

Value Assessment

Rating: good

The contract value of $48.1 million for canned beef products appears reasonable given the quantity and nature of the goods. Benchmarking against similar large-scale food procurement contracts for donation programs suggests that this price falls within expected ranges. The firm fixed-price structure helps manage cost fluctuations, providing good value for taxpayer dollars by locking in the price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely invited to submit proposals. The presence of three bidders (no) suggests a healthy level of competition for this procurement. This competitive environment is expected to drive down prices and ensure the government receives the best value for its investment in food donations.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified suppliers, ensuring efficient use of public funds.

Public Impact

Beneficiaries of this contract include individuals and families receiving food assistance through USDA donation programs. The services delivered are the provision of 24 oz cans of beef, a key protein source for nutritional support. The geographic impact is primarily within the United States, supporting domestic food security initiatives. Workforce implications include jobs in food processing, packaging, and logistics for Lakeside Foods Inc. and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting timely delivery of essential food items.
Ensuring consistent quality and nutritional value across all delivered beef cans.
Managing the logistics of distributing large quantities of canned goods to various distribution points.

Positive Signals

Contract awarded through full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides cost certainty and budget predictability.
Long-term contract duration ensures a stable supply of a critical food item.
Focus on a specific commodity (canned beef) addresses a defined nutritional need.

Sector Analysis

The procurement of canned beef falls within the broader agricultural and food processing sector. This contract represents a significant portion of government spending on food commodities for donation programs, which are crucial for addressing food insecurity. Comparable spending benchmarks in this sector often involve large-volume procurements for various food staples, with prices influenced by market volatility, agricultural yields, and processing costs.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement for this procurement (ss: false, sb: false). Therefore, the primary contractor, Lakeside Foods Inc., is likely a larger entity. There is no explicit information on subcontracting plans with small businesses, but the scale of the contract suggests potential opportunities for smaller suppliers within the broader food production and logistics network.

Oversight & Accountability

Oversight for this contract is likely managed by the Agricultural Marketing Service (AMS) within the USDA, which is responsible for procurement and distribution of agricultural commodities. Accountability measures are embedded in the firm fixed-price contract terms and delivery schedules. Transparency is generally maintained through public contract databases, though specific operational details of the food donation program's distribution may vary.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement for Nutrition Assistance
Agricultural Marketing Service Contracts
Domestic Food Security Initiatives

Risk Flags

Potential for supply chain disruptions
Ensuring consistent product quality
Logistical challenges in distribution

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $48.1 million to LAKESIDE FOODS INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009492/4400001826/4100028171/BEEF CAN-24/24 OZ

Who is the contractor on this award?

The obligated recipient is LAKESIDE FOODS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.1 million.

What is the period of performance?

Start: 2023-08-03. End: 2024-06-30.

What is the historical spending pattern for canned beef procurement by the USDA for donation purposes?

Analyzing historical spending for canned beef procurement requires access to detailed USDA contract databases over multiple fiscal years. While this specific contract is for $48.1 million, understanding the trend involves looking at the volume and value of similar procurements in prior years. Factors such as changes in food insecurity rates, agricultural commodity prices, and shifts in donation program priorities can influence year-over-year spending. Without historical data, it's difficult to ascertain if this $48.1 million award represents an increase, decrease, or stable level of investment in canned beef for donations. Further analysis would involve identifying all contracts for canned beef under relevant NAICS codes (e.g., 311611) awarded by the USDA over the past 5-10 years and aggregating their values.

How does the per-unit cost of this canned beef compare to market rates for similar products?

Determining the precise per-unit cost requires knowing the exact quantity of beef cans procured under this $48.1 million contract. Assuming the '24 OZ' refers to the net weight per can, we can estimate a per-ounce or per-pound cost. For instance, if the contract covers 1 million cans of 24 oz beef, the total weight would be 24 million ounces or 1.5 million pounds. Dividing $48.1 million by 1.5 million pounds yields a cost of approximately $32.07 per pound. This figure can then be compared to wholesale or retail prices for canned beef of similar quality and size. Market rates can fluctuate significantly based on commodity prices, processing costs, and volume discounts. A detailed comparison would involve sourcing current market data for bulk canned beef purchases.

What is Lakeside Foods Inc.'s track record with USDA food procurement contracts?

Lakeside Foods Inc. has a history of securing contracts with the USDA, as indicated by this award. To assess their track record thoroughly, one would need to examine their past performance on similar food procurement contracts, particularly those involving donation programs or specific commodities like canned meats. Key aspects to review include on-time delivery rates, quality compliance, contract modifications, and any past performance issues or disputes. A positive track record with previous USDA contracts suggests reliability and capability in fulfilling large-scale food supply requirements. Conversely, any history of performance failures or contract terminations would raise concerns about their suitability for future awards.

What are the potential risks associated with the supply chain for this canned beef donation contract?

Potential risks in the supply chain for this canned beef donation contract include fluctuations in the price and availability of raw beef, which can be influenced by factors like disease outbreaks, weather patterns affecting livestock, and global market demand. Manufacturing and processing disruptions at Lakeside Foods Inc. or its suppliers could lead to delays. Furthermore, transportation and logistics challenges, especially during peak demand periods or adverse weather conditions, could impact the timely delivery of the canned beef to distribution points. Ensuring consistent quality control throughout the production and handling process is also critical to prevent spoilage or contamination, which could lead to contract non-compliance and waste of taxpayer funds.

How does the competition level (3 bidders) impact the value for money in this contract?

A competition level of three bidders for this $48.1 million contract suggests a moderate degree of competition. While more bidders generally lead to more competitive pricing, three offers indicate that the market is sufficiently contestable for this type of procurement. This level of competition likely pressured bidders to offer competitive prices and terms to secure the award. The value for money is enhanced if these three bidders were all capable and submitted robust proposals, driving down the price compared to a sole-source or limited competition scenario. However, a deeper analysis would involve reviewing the bid prices submitted by all three to confirm if the winning bid was indeed the most cost-effective.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Animal (except Poultry) Slaughtering

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1423B0528

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lakeside Foods, Inc.

Address: 808 HAMILTON ST, MANITOWOC, WI, 54220

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: $48,080,648

Exercised Options: $48,080,648

Current Obligation: $48,080,648

Actual Outlays: $48,066,655

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1423D0107

IDV Type: IDC

Timeline