USDA awards $2.2M for frozen pork picnic shoulders, highlighting commodity procurement for food donations

Contract Overview

Contract Amount: $2,220,482 ($2.2M)

Contractor: JBS USA Food Company

Awarding Agency: Department of Agriculture

Start Date: 2024-07-29

End Date: 2024-09-30

Contract Duration: 63 days

Daily Burn Rate: $35.2K/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: 2000010225/4100030522/PORK PICNIC BNLS FRZ CTN-60 LB

Place of Performance

Location: WORTHINGTON, NOBLES County, MINNESOTA, 56187

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $2.2 million to JBS USA FOOD COMPANY for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010225/4100030522/PORK PICNIC BNLS FRZ CTN-60 LB Key points: 1. Procurement focuses on essential food commodities for donation programs. 2. Contract awarded through full and open competition, suggesting market responsiveness. 3. Fixed-price contract type aims to control costs for the government. 4. Short contract duration (63 days) indicates a specific, immediate need. 5. Awardee has a significant presence in the food processing industry. 6. Geographic focus on Minnesota for this specific delivery.

Value Assessment

Rating: good

The contract value of $2.2 million for 20,000 cases of frozen pork picnic shoulders appears reasonable given the market for bulk food commodities. Benchmarking against similar USDA food donation procurements would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overruns for the government, ensuring predictable expenditure for this specific commodity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a competitive market for this type of commodity procurement. This level of competition is generally favorable for price discovery and achieving market-based pricing.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price for essential food commodities.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered involve the procurement and supply of frozen pork picnic shoulders. Geographic impact is centered on the delivery location in Minnesota. Workforce implications are primarily within the food processing and logistics sectors involved in fulfilling the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in commodity markets impacting future procurements.
Logistical challenges in maintaining cold chain integrity for frozen goods.
Dependence on a limited number of large-scale food processors for significant commodity needs.

Positive Signals

Clear definition of commodity specifications ensures product quality.
Firm fixed-price contract provides cost certainty.
Award to an established food company suggests reliable supply chain capabilities.

Sector Analysis

This contract falls within the broader agricultural commodities sector, specifically focusing on meat processing and distribution for federal food assistance programs. The market for bulk food procurement by government agencies is substantial, driven by domestic nutrition programs and international aid. JBS USA Food Company is a major player in this space, indicating the contract aligns with significant industry players.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the procurement was likely fulfilled by larger, established food processing companies capable of meeting the volume and specifications required for this commodity.

Oversight & Accountability

Oversight for this contract would typically fall under the Agricultural Marketing Service (AMS) within the USDA. Standard contract administration processes, including inspection of goods upon delivery and verification of compliance with specifications, would be in place. Transparency is generally maintained through contract award databases like FPDS.

Related Government Programs

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

Risk Flags

Potential for commodity price volatility
Cold chain logistics management
Food safety compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $2.2 million to JBS USA FOOD COMPANY. COMMODITIES FOR USG FOOD DONATIONS: 2000010225/4100030522/PORK PICNIC BNLS FRZ CTN-60 LB

Who is the contractor on this award?

The obligated recipient is JBS USA FOOD COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.2 million.

What is the period of performance?

Start: 2024-07-29. End: 2024-09-30.

What is the historical spending pattern for similar pork commodity procurements by the USDA?

Analyzing historical spending for similar pork commodity procurements by the USDA would involve reviewing past contract awards for frozen pork picnic shoulders or comparable cuts. This would include examining award amounts, quantities, contract types, and awardees over several fiscal years. Such an analysis would help establish a baseline for current pricing, identify any significant price trends or volatility, and assess whether the current $2.2 million award is consistent with historical norms or represents a deviation. It would also reveal the frequency of such procurements and the typical duration of contracts, providing context for the 63-day term of this award. Understanding past performance of awardees in fulfilling similar contracts would also be a key component of this historical review.

How does the price per pound for this contract compare to current market wholesale prices for pork picnic shoulders?

To compare the price per pound, we first need to calculate it from the given data. The contract is for 20,000 cases, and each case weighs 60 lbs, totaling 1,200,000 lbs (20,000 cases * 60 lbs/case). The total contract value is $2,220,481.69. Therefore, the price per pound is approximately $1.85 ($2,220,481.69 / 1,200,000 lbs). This figure needs to be benchmarked against current wholesale market prices for pork picnic shoulders, which fluctuate based on supply, demand, and seasonal factors. A comparison would involve consulting industry price reports (e.g., USDA Agricultural Marketing Service daily/weekly reports, industry publications) for the relevant period and region. If the contract price is significantly higher than the market rate, it could indicate a less competitive bidding process or specific quality/delivery requirements driving up costs. Conversely, a price below market might suggest favorable terms for the government or a strategic bid by the contractor.

What are the specific quality and safety standards required for these pork products?

The contract likely specifies detailed quality and safety standards that the pork products must meet to ensure they are suitable for human consumption and align with USDA food donation program requirements. These standards typically include specifications for the type and cut of pork (e.g., boneless, skinless), fat content, absence of defects, freezing methods, packaging materials, and labeling. Furthermore, compliance with USDA inspection requirements, such as those provided by the Food Safety and Inspection Service (FSIS), is mandatory. This ensures that the meat is processed in federally inspected establishments and meets all public health regulations. The contract documents would reference specific USDA regulations, standards, and inspection protocols that the awarded contractor, JBS USA Food Company, must adhere to throughout the production and delivery process.

What is the track record of JBS USA Food Company in fulfilling government food procurement contracts?

JBS USA Food Company is a major global food processing company with a significant history of supplying products to various government entities, including the USDA. Their track record in fulfilling government contracts would typically be assessed based on past performance evaluations, on-time delivery rates, product quality compliance, and any history of contract disputes or terminations. Government agencies often maintain performance records for contractors. A review of publicly available contract databases (like FPDS) and any available past performance information would reveal the extent and nature of their government business. Given their scale, it's probable they have extensive experience, but specific performance metrics for food donation contracts would be the most relevant indicator of their reliability for this particular award.

What is the intended distribution channel and end-use for these donated pork products?

The intended distribution channel for these pork products is through USDA food donation programs, which serve a variety of recipients. This typically includes food banks, pantries, shelters, and other charitable organizations that provide food assistance to low-income individuals and families, seniors, and children. The end-use is direct consumption by these beneficiaries as part of their nutritional support. The USDA's Food Purchase and Distribution Programs aim to alleviate hunger and improve food security across the nation. The specific type of pork cut (picnic shoulders) suggests it is intended for versatile preparation in meals served by these organizations or distributed for home use.

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: SEALED BID

Solicitation ID: 123J1424B0524

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: JBS S/A

Address: 1770 PROMONTORY CIRLE, GREELEY, CO, 80634

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: $2,220,482

Exercised Options: $2,220,482

Current Obligation: $2,220,482

Actual Outlays: $2,220,238

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline