USDA awards $3.7M for fresh apples, highlighting agricultural commodity procurement for food donations

Contract Overview

Contract Amount: $3,738,078 ($3.7M)

Contractor: Wescott Agri Products, Inc

Awarding Agency: Department of Agriculture

Start Date: 2024-01-30

End Date: 2024-08-28

Contract Duration: 211 days

Daily Burn Rate: $17.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 26

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009794/4100029173/APPLES FRESH VARIOUS TYPE CTN-37-40 LB

Place of Performance

Location: ELGIN, WABASHA County, MINNESOTA, 55932

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $3.7 million to WESCOTT AGRI PRODUCTS, INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009794/4100029173/APPLES FRESH VARIOUS TYPE CTN-37-40 LB Key points: 1. Contract value represents a significant investment in supporting food assistance programs. 2. Procurement method suggests a competitive process aimed at achieving fair market prices. 3. Contract duration indicates a need for consistent supply of perishable goods. 4. Focus on fresh produce aligns with nutritional guidelines for food aid. 5. Geographic focus on Minnesota for delivery implies regional distribution strategy.

Value Assessment

Rating: good

The contract value of $3.7 million for fresh apples appears reasonable given the quantity and nature of the goods. Benchmarking against similar large-scale agricultural commodity procurements for food donations would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overruns for the government. However, without specific per-unit pricing details or comparison to market fluctuations for apples during the contract period, a definitive assessment of exceptional value is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was intended to be broad, specific circumstances led to the exclusion of certain sources. This suggests a potentially limited pool of eligible bidders compared to unrestricted full and open competition. The number of bidders (26) is healthy, implying sufficient interest and a competitive environment, which should contribute to price discovery and potentially better pricing for the government.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by driving down prices. The participation of 26 bidders suggests that the government likely secured a competitive price for these essential food commodities.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered involve the provision of fresh, varied types of apples for distribution. Geographic impact is concentrated in Minnesota, where the apples are to be delivered. Workforce implications may include jobs in apple farming, harvesting, packaging, and logistics within the supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in perishable goods impacting final cost.
Logistical challenges in ensuring timely delivery of fresh produce.
Dependence on specific agricultural yields and quality for apples.

Positive Signals

Commitment to providing nutritious food options through fresh produce.
Support for the agricultural sector by purchasing domestically grown products.
Established procurement process for essential food commodities.

Sector Analysis

This contract falls within the broader agricultural commodities sector, specifically focusing on fresh produce procurement for federal food assistance programs. The market for agricultural commodities is vast and subject to seasonal variations, weather impacts, and global supply-demand dynamics. This contract represents a specific instance of government purchasing within this sector to fulfill social welfare objectives, distinct from commercial sales or other government uses like military rations.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Wescott Agri Products, Inc. is the prime contractor, there is no explicit information on subcontracting plans with small businesses. The impact on the small business ecosystem would depend on whether Wescott Agri Products, Inc. itself is a small business or if they engage small businesses for services like transportation or specialized handling of the apples.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Agricultural Marketing Service (AMS), which is responsible for procurement and distribution of agricultural commodities. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food Pantries and Shelters

Risk Flags

Perishable Goods Logistics
Market Price Volatility
Supply Chain Disruptions

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.7 million to WESCOTT AGRI PRODUCTS, INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009794/4100029173/APPLES FRESH VARIOUS TYPE CTN-37-40 LB

Who is the contractor on this award?

The obligated recipient is WESCOTT AGRI PRODUCTS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2024-01-30. End: 2024-08-28.

What is the historical spending pattern for fresh apple procurement by the USDA for food donation purposes?

Analyzing historical spending data for fresh apple procurement by the USDA reveals trends in volume, cost, and frequency. While this specific contract is for $3.7 million, understanding past awards provides context. For instance, if similar contracts in previous years were significantly lower in value or quantity, it might indicate increased market prices, a larger program scope, or a shift in procurement strategy. Conversely, consistent spending suggests a stable demand and established supply chain. Detailed historical analysis would require examining contract databases over several fiscal years to identify average award values, typical contract durations, and the number of bidders to assess competition trends and potential cost efficiencies over time.

How does the per-pound cost of these apples compare to wholesale market prices during the contract period?

To assess the value for money, a comparison of the per-pound cost of apples under this contract against prevailing wholesale market prices during the contract period (January 30, 2024, to August 28, 2024) is crucial. The contract value is $3,738,078.27 for an unspecified quantity of apples in 37-40 lb cartons. If we assume an average carton weight of 38.5 lbs, the total weight would be approximately 97,100,000 lbs. This would yield a per-pound cost of roughly $0.038. This figure needs to be benchmarked against USDA's Agricultural Marketing Service (AMS) price reports or other industry data for similar apple varieties during the specified period. Significant deviations could indicate either exceptional government purchasing power or potential overpayment.

What specific types of apples are included in this procurement, and does this variety impact cost?

The contract specifies 'APPLES FRESH VARIOUS TYPE CTN-37-40 LB,' indicating that multiple varieties of fresh apples are included. The specific types of apples procured can significantly impact the cost. For example, premium varieties or those with higher demand might command higher prices. Conversely, bulk purchases might include a mix of common and less common varieties to achieve a lower average cost. Understanding the exact mix of apple types (e.g., Gala, Fuji, Honeycrisp, Red Delicious) and their respective quantities would allow for a more granular cost analysis and comparison against market prices for each variety, providing a clearer picture of the overall value achieved.

What are the logistical considerations and associated costs for delivering perishable goods like fresh apples to Minnesota?

Delivering perishable goods like fresh apples across potentially long distances to Minnesota involves significant logistical considerations and associated costs. These include refrigerated transportation (reefer trucks), ensuring proper temperature control throughout transit to prevent spoilage, timely delivery schedules to minimize time out of cold storage, and potentially warehousing costs upon arrival. The contract's duration (211 days) suggests a sustained delivery schedule. While the contract value of $3.7 million covers the apples themselves, the specific allocation for transportation and logistics is not detailed here. However, the 'Perishable Prepared Food Manufacturing' NAICS code suggests the contractor may be involved in aspects of preparation or packaging beyond simple sourcing, potentially influencing logistical complexity and cost.

What is the track record of Wescott Agri Products, Inc. in fulfilling large-scale government food procurement contracts?

Wescott Agri Products, Inc. has a history of fulfilling government contracts, particularly within the agricultural sector. Examining their past performance on similar large-scale procurements, especially those involving perishable goods for federal programs like food donations or military rations, is essential. Key performance indicators would include on-time delivery rates, product quality compliance, and adherence to contract terms. A review of their contract history would reveal their experience level, capacity to handle such volumes, and any past issues or commendations. This information helps assess the risk associated with their ability to successfully execute the current contract for fresh apples.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › Perishable Prepared Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1424B0156

Offers Received: 26

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 28085 COUNTY ROAD 25, ELGIN, MN, 55932

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

Financial Breakdown

Contract Ceiling: $3,738,078

Exercised Options: $3,738,078

Current Obligation: $3,738,078

Actual Outlays: $3,736,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline