Department of Agriculture awards $9.86M for canned fruits, with Del Monte Foods Inc. as the primary contractor

Contract Overview

Contract Amount: $9,861,222 ($9.9M)

Contractor: DEL Monte Foods Inc

Awarding Agency: Department of Agriculture

Start Date: 2023-11-15

End Date: 2024-04-30

Contract Duration: 167 days

Daily Burn Rate: $59.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009700/4400001769/4100028610/PEARS CAN-24/300,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,MIXED FRUIT CAN-24/300,MIXED FRUIT EX LT CAN-6/10

Place of Performance

Location: YAKIMA, YAKIMA County, WASHINGTON, 98902

State: Washington Government Spending

Plain-Language Summary

Department of Agriculture obligated $9.9 million to DEL MONTE FOODS INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009700/4400001769/4100028610/PEARS CAN-24/300,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,MIXED FRUIT CAN-24/300,MIXED FRUIT EX LT CAN-6/10 Key points: 1. The contract focuses on essential food commodities for U.S. government food donation programs. 2. Pricing includes economic adjustments, suggesting potential for cost fluctuations based on market conditions. 3. The award was made under full and open competition, indicating a broad solicitation process. 4. The contract duration is relatively short, spanning approximately 5.5 months. 5. The primary contractor, Del Monte Foods Inc., is a well-established player in the food processing industry. 6. The North American Industry Classification System (NAICS) code 311421 points to the Fruit and Vegetable Canning sector.

Value Assessment

Rating: good

The total award of $9.86 million for canned fruits appears reasonable given the quantity and nature of the goods procured for federal food donation programs. Benchmarking against similar contracts for bulk food commodities would provide a more precise value-for-money assessment. The inclusion of economic price adjustment clauses suggests a mechanism to account for market volatility, which can be beneficial for both parties but requires careful monitoring to ensure fair pricing over the contract term.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit bids. The presence of 5 bids indicates a healthy level of interest and competition for this procurement. This competitive environment is generally expected to drive more favorable pricing and terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that likely resulted in a more cost-effective acquisition of essential food commodities for federal programs.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, such as food banks and charitable organizations. The services delivered involve the supply of canned pears and mixed fruit. The geographic impact is national, supporting food security initiatives across the United States. Workforce implications are primarily within the food processing and logistics sectors, supporting jobs at Del Monte Foods Inc. and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clauses.
Reliance on a single primary contractor for a significant volume of food commodities.
Logistical challenges in ensuring timely delivery of perishable goods.

Positive Signals

Award to an established and reputable food supplier (Del Monte Foods Inc.).
Procurement through full and open competition ensures market-driven pricing.
Contract supports vital federal food assistance programs.

Sector Analysis

The fruit and vegetable canning industry is a significant segment of the food manufacturing sector. This contract falls within the broader agricultural and food supply chain, which is crucial for national food security. Spending on such commodities for federal programs is common, with annual outlays varying based on program needs and appropriations. Comparable spending benchmarks would typically be found within the USDA's procurement history for similar food items.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside requirement for this contract, and the primary awardee is a large corporation. There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears limited unless Del Monte Foods Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Agricultural Marketing Service (AMS), which is responsible for managing procurement and ensuring contract compliance. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is facilitated through public contract databases where such awards are reported. 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 Distribution Program on Indian Reservations

Risk Flags

Economic Price Adjustment Clause
Potential for Supply Chain Disruptions
Reliance on Large Prime Contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $9.9 million to DEL MONTE FOODS INC. COMMODITIES FOR USG FOOD DONATIONS: 2000009700/4400001769/4100028610/PEARS CAN-24/300,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,MIXED FRUIT CAN-24/300,MIXED FRUIT EX LT CAN-6/10

Who is the contractor on this award?

The obligated recipient is DEL MONTE 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 $9.9 million.

What is the period of performance?

Start: 2023-11-15. End: 2024-04-30.

What is the historical spending pattern for canned fruits and vegetables by the Department of Agriculture for food donation programs?

Analyzing historical spending for canned fruits and vegetables by the USDA for food donation programs requires access to detailed procurement data over multiple fiscal years. Generally, such spending fluctuates based on congressional appropriations, specific program needs, and prevailing market prices for agricultural commodities. The USDA often procures large volumes of shelf-stable food items like canned fruits to support various domestic and international food assistance initiatives. Trends can be influenced by factors such as agricultural output, global supply chain disruptions, and changes in federal nutrition guidelines or program mandates. A comprehensive review would involve examining annual reports and contract databases to identify patterns in volume, types of products, and total expenditure over time.

How does the unit price of the canned fruits in this contract compare to market rates or similar government procurements?

A precise unit price comparison is challenging without knowing the exact specifications (e.g., can size, fruit type, quality standards) and the specific market rates at the time of award. However, the total award of $9.86 million for 200,000 units (implied by the '2000009700' in the data, though this is likely a contract number fragment) suggests an average price of approximately $49.31 per unit. Given that these are likely large institutional-sized cans, this price needs to be evaluated against bulk commodity pricing. The inclusion of an 'Economic Price Adjustment' clause indicates that the final price may vary. Benchmarking against other recent USDA or DoD food procurements for similar items would be necessary for a definitive assessment of value for money.

What is Del Monte Foods Inc.'s track record with federal food procurement contracts?

Del Monte Foods Inc. has a long-standing history as a supplier of canned and processed foods, and it is highly probable that they have been a consistent participant and awardee in federal food procurement contracts, particularly with agencies like the Department of Agriculture (USDA) and the Defense Logistics Agency (DLA). Their extensive experience in large-scale food production and distribution makes them a logical choice for government contracts supporting food assistance programs or military rations. A detailed review of federal procurement databases (e.g., FPDS, SAM.gov) would reveal the specific types of contracts awarded to Del Monte, their performance history, and the total value of federal business they have conducted over the years.

What are the potential risks associated with the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type for this procurement?

The 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) contract type introduces a degree of uncertainty regarding the final cost. While it provides a baseline fixed price, the economic price adjustment (EPA) clause allows for modifications to the price based on fluctuations in specified economic factors, such as labor costs, material costs, or other indices. For the government, the primary risk is that the EPA could lead to a higher final price than initially anticipated, especially in periods of high inflation or supply chain volatility. Conversely, it protects the contractor from unforeseen cost increases, ensuring a stable supply. Effective management requires robust monitoring of the economic indicators tied to the EPA and clear contract terms to prevent excessive price escalations.

How does the competition level (5 bidders) impact the government's ability to secure favorable pricing for these food commodities?

A competition level involving 5 bidders is generally considered moderate to good, suggesting that the procurement attracted a reasonable number of interested parties. In a full and open competition, a higher number of bidders typically correlates with increased price competition, as companies vie to offer the most attractive terms. With 5 bidders, the government has a solid basis for price discovery and negotiation. However, the optimal number of bidders can vary depending on the complexity and size of the procurement, as well as the number of qualified suppliers in the market. For standard commodities like canned fruits, 5 bidders likely provided sufficient competition to drive prices down, although more bidders could potentially yield even better results.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1423R0373

Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 205 N WIGET LN, WALNUT CREEK, CA, 94598

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $9,861,222

Exercised Options: $9,861,222

Current Obligation: $9,861,222

Actual Outlays: $9,815,313

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1423D0054

IDV Type: IDC

Timeline