USDA awards Tyson Foods $27.5M for chilled chicken bulk purchases, impacting food donation programs

Contract Overview

Contract Amount: $27,511,866 ($27.5M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Agriculture

Start Date: 2024-09-27

End Date: 2024-12-31

Contract Duration: 95 days

Daily Burn Rate: $289.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010352/4100031038/CHICKEN LARGE CHILLED -BULK

Place of Performance

Location: NEW HOLLAND, LANCASTER County, PENNSYLVANIA, 17557

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $27.5 million to TYSON FOODS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010352/4100031038/CHICKEN LARGE CHILLED -BULK Key points: 1. Tyson Foods secured a significant contract for a critical commodity. 2. The award utilizes full and open competition, suggesting a competitive bidding process. 3. Potential risks include supply chain disruptions or price volatility for chicken. 4. This spending falls within the broader agricultural and food supply sector.

Value Assessment

Rating: good

The contract value of $27.5M for 95 days of supply appears reasonable given the quantity and commodity. Benchmarking against similar large-scale food procurement contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: Taxpayer funds are being used to procure essential food commodities for donation programs, supporting food security initiatives.

Public Impact

Ensures availability of a key protein source for federal food assistance programs. Supports domestic agriculture and food processing industries. Contributes to efforts to combat food insecurity nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 70 / 10

Warning Flags

Potential for price fluctuations in the poultry market.
Dependence on a single supplier for a large volume.

Positive Signals

Supports critical food donation programs.
Awarded through competitive bidding.
Firm fixed price contract provides cost certainty.

Sector Analysis

This contract falls within the agricultural sector, specifically poultry processing. Government spending on food commodities for donation programs is a significant component of federal food assistance.

Small Business Impact

While Tyson Foods is a large corporation, the contract's scale might indirectly benefit smaller suppliers within Tyson's broader supply chain. However, direct small business participation in this specific award is not indicated.

Oversight & Accountability

The contract is managed by the Agricultural Marketing Service, a sub-agency of the USDA, which has established oversight mechanisms for procurement and distribution of donated commodities.

Related Government Programs

Poultry Processing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Potential for price volatility in the commodity market.
Supply chain vulnerability (e.g., disease, labor, transport).
Dependence on a single large supplier.
Contract duration is relatively short (95 days).

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $27.5 million to TYSON FOODS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010352/4100031038/CHICKEN LARGE CHILLED -BULK

Who is the contractor on this award?

The obligated recipient is TYSON FOODS INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2024-09-27. End: 2024-12-31.

What is the historical pricing trend for bulk chilled chicken purchased by the government?

Analyzing historical pricing data for similar bulk chilled chicken contracts over the past 3-5 years would reveal trends in price per pound or per unit. This comparison would help determine if the current $27.5M award represents a favorable or unfavorable price point relative to past government purchases and market fluctuations.

What are the primary risks associated with relying on Tyson Foods for this large volume of chicken?

Key risks include potential supply chain disruptions due to disease outbreaks, labor shortages, or transportation issues affecting Tyson's production capacity. Price volatility in the chicken market could also lead to the government paying more than anticipated if the firm fixed price was set based on lower market conditions. Furthermore, over-reliance on one supplier could limit future negotiation leverage.

How effectively does this contract support the goals of federal food donation programs?

This contract directly supports federal food donation programs by ensuring a consistent and substantial supply of a high-demand protein. The firm fixed price and full and open competition suggest an efficient procurement process. The effectiveness will ultimately be measured by the successful distribution of this chicken to food banks and other recipients, thereby alleviating food insecurity.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Poultry Processing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1424B0623

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2200, WEST DON TYSON PARKWAY, SPRINGDALE, AR, 72762

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: $27,511,866

Exercised Options: $27,511,866

Current Obligation: $27,511,866

Actual Outlays: $27,511,866

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline