USDA awards $28.8M for cheese blend to Bongards Creameries, highlighting a firm fixed-price contract

Contract Overview

Contract Amount: $28,768,590 ($28.8M)

Contractor: Bongards Creameries

Awarding Agency: Department of Agriculture

Start Date: 2023-08-08

End Date: 2024-07-02

Contract Duration: 329 days

Daily Burn Rate: $87.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009497/4400001810/4100028187/CHEESE BLEND AMER SKM LVS-12/2 LB

Place of Performance

Location: HUMBOLDT, GIBSON County, TENNESSEE, 38343

State: Tennessee Government Spending

Plain-Language Summary

Department of Agriculture obligated $28.8 million to BONGARDS CREAMERIES for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009497/4400001810/4100028187/CHEESE BLEND AMER SKM LVS-12/2 LB Key points: 1. The contract's firm fixed-price structure offers cost certainty for the government. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The duration of 329 days indicates a medium-term supply need. 4. The award value of $28.8M positions this as a significant procurement. 5. The specific commodity, 'CHEESE BLEND AMER SKM LVS-12/2 LB', points to a specialized food product. 6. The contract is managed by the Agricultural Marketing Service, indicating a focus on agricultural commodity programs.

Value Assessment

Rating: good

The award of $28.8 million for cheese blend appears reasonable given the quantity and duration. Without specific benchmarks for this exact commodity, a direct per-unit cost comparison is difficult. However, the firm fixed-price nature of the contract helps mitigate cost escalation risks for the government. The contract's value is substantial, suggesting a significant volume of product is being procured for federal food donation programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bidders suggests a healthy level of interest and competition for this requirement. This competitive environment is generally favorable for price discovery and achieving market-based pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through multiple offers, ensuring the government receives the best value for its spending.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, likely including food banks and other charitable organizations. The service delivered is the provision of a specific type of cheese blend for these donation programs. The geographic impact is national, as food donation programs typically serve diverse populations across the United States. Workforce implications are primarily within the contractor's manufacturing and distribution operations, and potentially within the logistics network supporting food distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in dairy markets impacting future contract renewals.
Ensuring consistent quality and timely delivery of a perishable food product.
Logistical challenges in distributing food donations to various locations.

Positive Signals

Firm fixed-price contract provides budget certainty.
Full and open competition suggests competitive pricing.
Award to an established supplier like Bongards Creameries may indicate reliability.

Sector Analysis

The procurement falls within the broader food manufacturing and agricultural commodities sector. This sector is characterized by significant government involvement through programs like food donations, school lunch programs, and agricultural support. The market for dairy products, including cheese, is influenced by global supply and demand, commodity prices, and government policies. This contract represents a specific instance of federal demand within the dairy processing industry.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While Bongards Creameries is a large producer, there is no explicit information on subcontracting opportunities for small businesses within this award. The focus appears to be on securing the commodity from a primary manufacturer.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers within the Department of Agriculture's Agricultural Marketing Service. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract award databases, though detailed performance metrics are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Emergency Food Assistance Program

Risk Flags

Potential for supply chain disruptions
Commodity price volatility
Quality assurance of food products

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $28.8 million to BONGARDS CREAMERIES. COMMODITIES FOR USG FOOD DONATIONS: 2000009497/4400001810/4100028187/CHEESE BLEND AMER SKM LVS-12/2 LB

Who is the contractor on this award?

The obligated recipient is BONGARDS CREAMERIES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.8 million.

What is the period of performance?

Start: 2023-08-08. End: 2024-07-02.

What is Bongards Creameries' track record with federal contracts, particularly with the USDA?

Bongards Creameries has a history of federal contracting, primarily with the Department of Agriculture. While this specific award for cheese blend is substantial, their past performance likely includes other food commodity procurements. Analyzing their contract history would reveal the volume and types of goods supplied, on-time delivery rates, and any past performance issues or awards. A review of federal procurement data would be necessary to fully assess their track record and identify any patterns of successful or problematic contract execution.

How does the per-unit cost of this cheese blend compare to similar federal or commercial purchases?

Determining the exact per-unit cost requires dividing the total award amount ($28,768,590.28) by the total quantity of 'CHEESE BLEND AMER SKM LVS-12/2 LB' units. Since the total quantity is not provided in the data, a precise per-unit cost cannot be calculated. Furthermore, direct comparison is challenging without knowing the exact specifications, packaging, and delivery terms. However, the firm fixed-price nature suggests the government aimed to lock in a price. Benchmarking against other USDA food purchase contracts for similar dairy products, adjusted for volume and specifications, would provide a more robust value assessment.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential quality control issues with the cheese blend, ensuring consistent supply and timely delivery over the contract period, and the risk of price volatility in the dairy market if the contract were to be extended or re-competed. Although it's a firm fixed-price contract, ensuring the product meets the exact specifications for food donation programs is crucial. Additionally, logistical challenges in distributing the product to intended recipients could pose a risk to program effectiveness.

How effective are USDA food donation programs in addressing food insecurity, and how does this contract contribute?

USDA food donation programs, such as those supported by this contract, are a key component of the federal strategy to combat food insecurity. They provide essential food supplies to low-income individuals and families through a network of food banks and other charitable organizations. This contract directly contributes by ensuring a supply of a specific commodity (cheese blend) for these programs. The effectiveness of these programs is often measured by the reach of distribution, nutritional impact, and reduction in reported food insecurity levels among recipient populations.

What has been the historical spending pattern for similar cheese or dairy products by the USDA?

Historical spending by the USDA on dairy products, including cheese, has been substantial and consistent, driven by various domestic nutrition assistance programs and international food aid initiatives. The Agricultural Marketing Service, responsible for this award, frequently procures commodities to support these programs. Spending patterns can fluctuate based on agricultural market conditions, program needs, and congressional appropriations. Analyzing past USDA procurement data for cheese and related dairy products would reveal trends in contract values, quantities purchased, and the types of suppliers utilized over time.

What is the significance of the 'CHEESE BLEND AMER SKM LVS-12/2 LB' specification?

The specification 'CHEESE BLEND AMER SKM LVS-12/2 LB' is critical as it defines the exact product being procured. 'AMER SKM LVS' likely refers to American, Skim, Low-Fat, or similar attributes, while '12/2 LB' indicates the packaging size (e.g., 12 two-pound packages per case or similar). This level of detail ensures that the procured cheese blend meets specific nutritional, functional (e.g., meltability, shelf-life), and handling requirements for its intended use in federal food donation programs. It allows for precise quality control and ensures consistency across deliveries.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1423B0531

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13200 COUNTY ROAD 51, NORWOOD YOUNG AMERICA, MN, 55368

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Agricultural Cooperative, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,768,590

Exercised Options: $28,768,590

Current Obligation: $28,768,590

Actual Outlays: $28,768,590

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1423D0102

IDV Type: IDC

Timeline