USDA Awards $25.9M for Cheese to Associated Milk Producers Inc. Under Full and Open Competition

Contract Overview

Contract Amount: $25,941,628 ($25.9M)

Contractor: Associated Milk Producers Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-08-08

End Date: 2024-07-08

Contract Duration: 335 days

Daily Burn Rate: $77.4K/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: 2000009497/4400001809/4100028188/CHEESE CHED YEL SHRED-PKG 6/2 LB

Place of Performance

Location: PORTAGE, COLUMBIA County, WISCONSIN, 53901

State: Wisconsin Government Spending

Plain-Language Summary

Department of Agriculture obligated $25.9 million to ASSOCIATED MILK PRODUCERS INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009497/4400001809/4100028188/CHEESE CHED YEL SHRED-PKG 6/2 LB Key points: 1. Significant award for dairy commodities, highlighting a key agricultural product. 2. Associated Milk Producers Inc. is a major player in the dairy cooperative sector. 3. The contract's fixed-price structure aims to control costs for food donations. 4. This award falls under the broader category of agricultural support and food security initiatives.

Value Assessment

Rating: good

The award amount of $25.9 million for cheese is substantial. Benchmarking against similar large-scale commodity procurements for food assistance programs would be necessary for a precise value assessment, but the firm fixed-price contract suggests an effort to establish clear cost expectations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method is generally expected to yield competitive pricing and ensure fair market value for the government.

Taxpayer Impact: The use of taxpayer funds for food donations is intended to support vulnerable populations, making the efficient use of these funds crucial for maximizing public benefit.

Public Impact

Ensures availability of essential dairy products for federal food donation programs. Supports American dairy farmers and processors through significant procurement contracts. Contributes to food security initiatives by providing nutritious food items.

Waste & Efficiency Indicators

Waste Risk Score: 77 / 10

Warning Flags

Potential for price fluctuations in dairy markets impacting long-term cost-effectiveness.
Dependence on a single supplier for a large quantity of a specific commodity.

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract provides cost certainty.
Supports domestic agricultural sector.

Sector Analysis

This contract falls within the agricultural sector, specifically focusing on dairy commodity procurement for federal food assistance programs. Spending in this area is often driven by legislative mandates and social program needs, with benchmarks varying based on market conditions and program scope.

Small Business Impact

While the prime contractor is a large cooperative, the contract's full and open competition may have allowed for subcontracts to small businesses involved in processing, packaging, or distribution of the cheese.

Oversight & Accountability

The Agricultural Marketing Service (AMS) oversees commodity procurement for food assistance. Oversight would focus on contract compliance, quality control of the delivered cheese, and timely delivery to meet program needs.

Related Government Programs

Cheese Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Potential for supply chain disruption.
Price volatility in dairy markets.
Dependence on a single large supplier.
Ensuring consistent quality across large volume.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $25.9 million to ASSOCIATED MILK PRODUCERS INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009497/4400001809/4100028188/CHEESE CHED YEL SHRED-PKG 6/2 LB

Who is the contractor on this award?

The obligated recipient is ASSOCIATED MILK PRODUCERS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.9 million.

What is the period of performance?

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

What is the historical price trend for shredded cheddar cheese, and how does this contract price compare to market averages?

Analyzing historical price data for shredded cheddar cheese is crucial to assess the value of this $25.9 million award. Comparing the contract's firm fixed price against prevailing market rates and trends over the contract period (August 2023 - July 2024) will determine if taxpayers received a competitive price. Fluctuations in dairy markets can significantly impact cost-effectiveness.

What are the potential risks associated with relying on a single supplier for such a large volume of a specific commodity?

Relying on Associated Milk Producers Inc. as the sole supplier for 200,000,000 lbs of cheese presents risks including supply chain disruptions due to unforeseen events (e.g., natural disasters, labor issues), potential quality control challenges with a large volume, and limited leverage for price renegotiation if market conditions change unfavorably. Contingency planning for alternative suppliers or mitigation strategies is advisable.

How effectively does this procurement support the objectives of federal food donation programs?

This procurement directly supports federal food donation programs by securing a significant quantity of a popular and nutritious commodity. The firm fixed-price contract and full and open competition suggest an effort to ensure both availability and cost-efficiency, thereby maximizing the reach and impact of taxpayer funds allocated to food assistance and security initiatives.

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: 315 N BROADWAY ST, NEW ULM, MN, 56073

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

Financial Breakdown

Contract Ceiling: $25,941,628

Exercised Options: $25,941,628

Current Obligation: $25,941,628

Actual Outlays: $25,941,628

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1423D0100

IDV Type: IDC

Timeline