USDA's $4.3M food donation contract awarded to Cherry Central Cooperative for applesauce products

Contract Overview

Contract Amount: $4,371,759 ($4.4M)

Contractor: Cherry Central Cooperative, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2024-05-09

End Date: 2024-09-30

Contract Duration: 144 days

Daily Burn Rate: $30.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010046/4100029942/APPLESAUCE CUP-96/4.5,APPLESAUCE UNSWEETENED CAN-6/10

Place of Performance

Location: LUDINGTON, MASON County, MICHIGAN, 49431

State: Michigan Government Spending

Plain-Language Summary

Department of Agriculture obligated $4.4 million to CHERRY CENTRAL COOPERATIVE, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010046/4100029942/APPLESAUCE CUP-96/4.5,APPLESAUCE UNSWEETENED CAN-6/10 Key points: 1. Contract aims to procure applesauce cups and cans for U.S. government food donation programs. 2. The award represents a significant investment in supporting food assistance initiatives. 3. Competition dynamics for this contract are being analyzed to ensure fair pricing. 4. Performance will be monitored to ensure timely delivery and product quality. 5. This contract aligns with broader USDA goals of food security and agricultural support. 6. The fixed-price structure provides cost certainty for the government.

Value Assessment

Rating: good

The contract value of $4.37 million for applesauce products appears reasonable given the quantity and nature of the goods. Benchmarking against similar government procurements for canned and cup fruits would provide a more precise value-for-money assessment. The firm fixed-price contract type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were likely considered. The presence of 8 bids suggests a healthy level of competition, which should contribute to competitive pricing and a wider selection of qualified suppliers. This procurement method is designed to maximize value for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive offers for essential food commodities.

Public Impact

Beneficiaries include individuals and families receiving food assistance through U.S. government donation programs. Services delivered include the provision of applesauce cups and cans, a staple food item. The geographic impact is national, supporting food distribution networks across the United States. Workforce implications may include employment in food processing, packaging, and logistics for the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality of applesauce across all batches.
Monitoring contractor's ability to meet demand fluctuations.

Positive Signals

Contractor's established presence in the fruit and vegetable sector.
Firm fixed-price contract provides cost predictability.
Multiple bids indicate a competitive market for these products.

Sector Analysis

The procurement falls within the broader food manufacturing and distribution sector, specifically focusing on canned and processed fruits. This sector is characterized by established supply chains and significant competition. Government contracts for food commodities are crucial for supporting domestic agriculture and ensuring food security programs are adequately supplied. Comparable spending benchmarks would involve analyzing other USDA procurements for similar food items.

Small Business Impact

The data indicates that small business participation was not a primary set-aside consideration for this specific contract, as the award was made to Cherry Central Cooperative, Inc. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the supply chain or logistics for this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Agricultural Marketing Service (AMS) within the USDA. Accountability measures will include monitoring delivery schedules, product specifications, and financial reporting. Transparency is facilitated through contract award databases, though detailed performance reports may not be publicly available.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement for Food Assistance
Agricultural Marketing Service Contracts
National School Lunch Program (potential indirect link)

Risk Flags

Potential for supply chain disruptions
Ensuring consistent product quality
Timeliness of delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $4.4 million to CHERRY CENTRAL COOPERATIVE, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010046/4100029942/APPLESAUCE CUP-96/4.5,APPLESAUCE UNSWEETENED CAN-6/10

Who is the contractor on this award?

The obligated recipient is CHERRY CENTRAL COOPERATIVE, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $4.4 million.

What is the period of performance?

Start: 2024-05-09. End: 2024-09-30.

What is the historical spending pattern of the USDA for applesauce procurement over the last five years?

Analyzing historical spending for applesauce by the USDA would involve reviewing contract databases for similar procurements over the past five fiscal years. This would help identify trends in contract values, awardees, and pricing. For instance, if the current $4.37 million contract is significantly higher or lower than previous awards for comparable quantities, it could indicate shifts in market prices, changes in program requirements, or variations in competition. Understanding these patterns is crucial for assessing the current award's value and identifying any anomalies that warrant further investigation into cost drivers or procurement strategies.

How does the unit price of applesauce in this contract compare to commercially available prices or other government contracts?

To assess the unit price, we would need to break down the total contract value by the quantity of applesauce cups and cans procured. For example, if the contract is for 1 million units at $4.37 million, the average unit price is approximately $4.37. This figure would then be benchmarked against average retail prices for similar products and against unit prices from other government contracts for applesauce or comparable fruit products. A significant deviation from these benchmarks, whether higher or lower, would prompt further inquiry into factors such as bulk purchasing discounts, specific product quality requirements, or differences in delivery logistics.

What is Cherry Central Cooperative, Inc.'s track record with USDA or other federal agencies for similar food commodity contracts?

Investigating Cherry Central Cooperative, Inc.'s past performance is essential. This involves reviewing their contract history with the USDA and other federal agencies, looking for awards related to food commodities, particularly fruits and vegetables. Key aspects to examine include on-time delivery rates, product quality compliance, any past performance issues or disputes, and their overall reliability as a supplier. A strong track record suggests a lower risk of performance issues for this current contract, while a history of problems might indicate potential challenges ahead and necessitate closer monitoring.

What are the specific quality standards and product specifications for the applesauce being procured under this contract?

The contract likely details specific quality standards and product specifications, such as ingredient requirements (e.g., unsweetened), packaging type (cups vs. cans), net weight, and any certifications (e.g., USDA Grade A). Understanding these specifications is crucial because stringent requirements can increase production costs and potentially limit the pool of eligible bidders. Comparing these specifications to industry standards and to those in previous USDA applesauce contracts helps determine if they are reasonable and necessary for the intended food donation programs, or if they might be unnecessarily driving up costs.

What is the projected impact of this contract on food security and the availability of essential food items for donation programs?

This contract directly supports U.S. government food donation programs by ensuring a supply of applesauce, a nutritious food item. The projected impact on food security is positive, as it provides essential resources to organizations that distribute food to vulnerable populations. The timely delivery of 20,000,000 units (estimated based on typical pack sizes for cups and cans) of applesauce will help meet the demand within these programs, contributing to the overall availability of food assistance and supporting the nutritional needs of recipients.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Fruit and Vegetable Canning

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1424B0366

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1771 N US HIGHWAY 31 S, TRAVERSE CITY, MI, 49684

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

Financial Breakdown

Contract Ceiling: $4,371,759

Exercised Options: $4,371,759

Current Obligation: $4,371,759

Actual Outlays: $4,371,262

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline