USDA's $4.28M applesauce contract awarded to Cherry Central Cooperative, Inc. for domestic food donations

Contract Overview

Contract Amount: $4,279,018 ($4.3M)

Contractor: Cherry Central Cooperative, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2024-08-01

End Date: 2024-12-31

Contract Duration: 152 days

Daily Burn Rate: $28.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 13

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010212/4100030582/APPLESAUCE CUP-96/4.5,APPLESAUCE CAN-24/300,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 $4.3 million to CHERRY CENTRAL COOPERATIVE, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010212/4100030582/APPLESAUCE CUP-96/4.5,APPLESAUCE CAN-24/300,APPLESAUCE UNSWEETENED CAN-6/10 Key points: 1. Value-for-money assessed through fixed-price contract terms and competitive bidding. 2. Competition dynamics indicate a robust bidding process for essential food commodities. 3. Risk indicators appear low given the firm fixed-price structure and established contractor. 4. Performance context is tied to the critical mission of domestic food assistance programs. 5. Sector positioning places this contract within the agricultural and food supply chain.

Value Assessment

Rating: good

The contract's firm fixed-price structure provides cost certainty for the government. While specific unit costs for applesauce are not detailed, the overall award amount of $4.28 million for a 5-month period suggests a reasonable allocation for procuring a significant quantity of food. Benchmarking against similar government food procurement contracts would offer further insight into the value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple responsible sources were solicited. The presence of 13 bidders suggests a healthy level of competition for this requirement, which typically drives more favorable pricing and ensures a wider pool of qualified suppliers.

Taxpayer Impact: The competitive nature of this procurement is beneficial for taxpayers, as it likely resulted in a more cost-effective award compared to a sole-source or limited competition scenario.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA programs. Services delivered involve the procurement and supply of essential canned and cup applesauce. Geographic impact is national, supporting food banks and distribution networks across the US. Workforce implications are indirect, supporting jobs in agriculture, food processing, and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw commodity markets impacting future procurements.
Logistical challenges in ensuring timely delivery to diverse distribution points.

Positive Signals

Established track record of Cherry Central Cooperative, Inc. in agricultural supply.
Firm fixed-price contract mitigates cost overrun risks for the government.
Competitive bidding process likely secured favorable pricing.

Sector Analysis

This contract falls within the broader agricultural and food processing sector, specifically focusing on canned goods. The market for processed fruits and vegetables is substantial, with government procurement representing a significant portion of demand, particularly for food assistance programs. Comparable spending benchmarks would involve analyzing other USDA food purchase contracts for similar commodities.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have significant subcontracting requirements explicitly detailed. The primary contractor, Cherry Central Cooperative, Inc., is a large agricultural cooperative. The impact on the small business ecosystem is likely minimal unless smaller entities are part of the cooperative's supply chain.

Oversight & Accountability

Oversight is likely managed by the Agricultural Marketing Service (AMS) within the USDA, responsible for procurement and program administration. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is facilitated through federal contract databases where award details are published.

Related Government Programs

USDA National School Lunch Program
USDA Food Distribution Program on Indian Reservations
Commodity Supplemental Food Program
Emergency Food Assistance Program

Risk Flags

Potential for supply chain disruptions impacting delivery.
Ensuring consistent product quality across all deliveries.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $4.3 million to CHERRY CENTRAL COOPERATIVE, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010212/4100030582/APPLESAUCE CUP-96/4.5,APPLESAUCE CAN-24/300,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 $4.3 million.

What is the period of performance?

Start: 2024-08-01. End: 2024-12-31.

What is the historical spending pattern for applesauce procurement by the USDA?

Analyzing historical spending patterns for applesauce procurement by the USDA requires access to detailed historical contract data. Generally, the USDA procures significant quantities of food items, including fruits and vegetables like applesauce, to support various domestic nutrition assistance programs. Spending can fluctuate based on program needs, appropriations, and commodity market prices. For instance, during periods of increased food insecurity or specific program expansions, procurement volumes and associated costs might rise. Conversely, stable economic conditions or shifts in dietary guidelines could influence demand. The current contract's duration of 152 days (approximately 5 months) and its value suggest a targeted procurement rather than an indefinite, long-term supply agreement, which is common for specific program needs or seasonal availability.

How does the unit cost of applesauce in this contract compare to market rates or similar government contracts?

Direct comparison of unit costs is challenging without granular data on the specific types and packaging of applesauce procured (e.g., cup vs. can, sweetened vs. unsweetened) and their exact quantities. The provided data lists 'APPLESAUCE CUP-96/4.5', 'APPLESAUCE CAN-24/300', and 'APPLESAUCE UNSWEETENED CAN-6/10', suggesting multiple SKUs. To benchmark, one would need to calculate the average cost per unit (e.g., per ounce or per standard container) for each SKU and compare it against prevailing wholesale prices for similar food products or against historical USDA contracts for the same or comparable items. Government contracts often benefit from bulk purchasing power, which can lead to lower unit costs than retail, but the efficiency relative to the open market depends on the specific terms, competition level, and the contractor's operational costs.

What is Cherry Central Cooperative, Inc.'s track record with federal contracts, particularly with the USDA?

Cherry Central Cooperative, Inc. has a history of receiving federal contracts, primarily from the USDA, for agricultural commodities. As a large agricultural cooperative based in Michigan, its core business involves marketing and distributing fruits and vegetables. Examining their contract history would reveal the types of commodities supplied, the value and duration of past awards, and their performance record. Agencies typically track contractor performance through past performance evaluations. A positive track record with the USDA suggests reliability in meeting delivery schedules, product quality standards, and contractual obligations. This specific contract, awarded under full and open competition, implies they met the necessary qualifications and offered competitive terms.

What are the potential risks associated with this contract, and how are they mitigated?

Potential risks in this contract include supply chain disruptions (e.g., weather affecting fruit harvests, transportation issues), quality control failures, and price volatility in the commodity market. Mitigation strategies are embedded within the contract structure. The firm fixed-price (FFP) nature shifts most of the financial risk to the contractor, Cherry Central Cooperative, Inc., protecting the government from cost overruns. The contract specifies product quality standards and delivery requirements, with potential penalties for non-compliance. Furthermore, the competitive bidding process helps ensure that the selected contractor is capable of meeting these demands. The relatively short duration (152 days) also limits the exposure to long-term market fluctuations or unforeseen supply issues.

How does this contract contribute to the USDA's mission of ensuring food security and access?

This contract directly supports the USDA's mission by procuring essential food items, such as applesauce, for domestic food donation programs. These programs aim to alleviate hunger and improve nutritional intake among vulnerable populations, including low-income families, seniors, and children. By ensuring a steady supply of nutritious commodities, the USDA helps food banks and other distribution partners meet the needs of their clients. The procurement of items like applesauce, which are shelf-stable and widely consumed, is crucial for providing balanced dietary options. This contract, therefore, is a tangible mechanism through which the USDA translates its policy goals into on-the-ground support for food security initiatives across the nation.

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: 123J1424B0512

Offers Received: 13

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: $4,279,018

Exercised Options: $4,279,018

Current Obligation: $4,279,018

Actual Outlays: $4,276,677

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline