Leprino Foods awarded $17.4M contract for cheese, highlighting significant government food procurement needs

Contract Overview

Contract Amount: $17,418,630 ($17.4M)

Contractor: Leprino Foods Dairy Products CO

Awarding Agency: Department of Agriculture

Start Date: 2025-02-12

End Date: 2025-06-30

Contract Duration: 138 days

Daily Burn Rate: $126.2K/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: 2000010605/4100031734/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125)

Place of Performance

Location: ROSWELL, CHAVES County, NEW MEXICO, 88203

State: New Mexico Government Spending

Plain-Language Summary

Department of Agriculture obligated $17.4 million to LEPRINO FOODS DAIRY PRODUCTS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010605/4100031734/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125) Key points: 1. Contract value represents a substantial investment in dairy products for federal programs. 2. Full and open competition suggests a potentially competitive bidding environment for this commodity. 3. The firm fixed-price structure aims to control costs and provide budget certainty. 4. Contract duration of 138 days indicates a short-term need for immediate supply. 5. Geographic focus on New Mexico for delivery may point to specific program distribution needs. 6. This procurement aligns with broader federal efforts to support food security and agricultural markets.

Value Assessment

Rating: good

The contract value of $17.4 million for cheese is significant, but without specific product details and volume, direct comparison to similar contracts is challenging. The firm fixed-price (FFP) award suggests a negotiated price that Leprino Foods deemed profitable, and the government accepted as fair. Benchmarking against market prices for bulk, processed cheese would be necessary for a more precise value assessment. Given the scale, it implies a competitive bid process likely yielded a reasonable price point for the quantity and quality specified.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 6 bidders suggests a healthy level of interest and competition for this government contract. This broad competition is generally favorable for price discovery, as it encourages bidders to offer competitive pricing to secure the award. The government likely received multiple proposals, allowing for a comparison of technical capabilities and price.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces, ensuring the government obtains goods and services at the most advantageous terms possible.

Public Impact

Beneficiaries include recipients of USG food donation programs, potentially domestic or international. Services delivered include the provision of processed mozzarella cheese, a key food commodity. Geographic impact is centered on New Mexico for delivery, suggesting logistical considerations for distribution. Workforce implications are primarily within Leprino Foods' manufacturing and logistics operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in dairy markets impacting future contract costs.
Dependence on a single supplier for a critical food commodity could pose supply chain risks.
Ensuring consistent quality and adherence to specifications for donated food items is crucial.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process and potential for value.
Award to an established dairy producer like Leprino Foods implies reliability in supply.

Sector Analysis

The dairy product manufacturing sector is a significant part of the broader food processing industry. Government procurement of dairy products, such as cheese, is common for various programs including food assistance, school lunch programs, and international aid. This contract fits within the 'Cheese Manufacturing' (NAICS 311513) category, indicating a specific focus on processed cheese. Comparable spending benchmarks would involve analyzing other federal contracts for similar dairy commodities, considering volume, type, and delivery locations.

Small Business Impact

This contract does not appear to have a small business set-aside (SB=false). Leprino Foods is a large corporation, not a small business. There is no explicit mention of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often engage small businesses in their broader supply chains.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of Agriculture's Agricultural Marketing Service. Oversight would typically involve contract officers, program managers, and potentially quality assurance personnel to ensure delivery and compliance with specifications. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

USDA Food Donation Programs
National School Lunch Program
Commodity Supplemental Food Program
Food for Peace Program

Risk Flags

Potential for supply chain disruption
Quality control and food safety adherence
Market price volatility for dairy products

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $17.4 million to LEPRINO FOODS DAIRY PRODUCTS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000010605/4100031734/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125)

Who is the contractor on this award?

The obligated recipient is LEPRINO FOODS DAIRY PRODUCTS CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

Start: 2025-02-12. End: 2025-06-30.

What is Leprino Foods' track record with federal contracts, particularly for dairy products?

Leprino Foods Company is a major producer of mozzarella cheese and other dairy products. While specific details of their federal contract history are not provided in this data snippet, their status as a large, established company suggests they likely have experience fulfilling government contracts. Federal procurement databases would contain a more comprehensive history of their awards, including past performance ratings, contract types, and agencies served. Their ability to win this $17.4 million contract under full and open competition implies a demonstrated capacity to meet government requirements and pricing expectations.

How does the $17.4 million value compare to typical federal spending on cheese or similar dairy products?

The $17.4 million value for this specific cheese contract is substantial and indicates a significant procurement volume. Federal spending on dairy products can fluctuate based on program needs, appropriations, and market conditions. For context, USDA's Food Purchase Programs, which include dairy, often involve hundreds of millions of dollars annually. This single contract represents a notable portion of spending for a specific commodity over its duration. A precise comparison would require analyzing historical spending data for similar cheese types (e.g., processed, specific fat content) and contract durations across various federal agencies and programs.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract revolve around supply chain reliability and quality assurance. Given the firm fixed-price nature, Leprino Foods bears the risk of cost overruns, but the government risks receiving a product that does not meet stringent quality or safety specifications, especially if intended for food donation programs. Delays in delivery could also disrupt program operations. Furthermore, reliance on a single supplier for a large quantity of a specific commodity, even if competitively procured, can pose a risk if unforeseen events impact Leprino Foods' production or distribution capabilities.

How effective is the 'full and open competition' strategy in ensuring value for this type of commodity procurement?

Full and open competition is generally considered the most effective strategy for ensuring value in commodity procurement. By allowing all responsible sources to bid, it maximizes the pool of potential suppliers, fostering a competitive environment that drives down prices. The fact that six bidders participated in this procurement suggests that the market for this type of cheese is sufficiently robust to support multiple suppliers. This level of competition increases the likelihood that the government secured the cheese at a price reflecting market value and that the chosen supplier offers the best combination of price and quality.

What are the historical spending patterns for cheese procurement by the Department of Agriculture?

The Department of Agriculture (USDA), particularly through its Agricultural Marketing Service (AMS) and Food and Nutrition Service (FNS), is a major procurer of dairy products, including cheese, for various domestic food assistance and donation programs. Historical spending patterns show significant annual investments in commodities like cheese, often in the hundreds of millions of dollars, to support programs such as the National School Lunch Program, Commodity Supplemental Food Program, and food banks. These procurements are sensitive to agricultural market conditions, federal budget allocations, and specific program mandates, leading to year-to-year variations in volume and total expenditure.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1425B0193

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1830 W 38TH AVE STE 600, DENVER, CO, 80211

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: $17,418,630

Exercised Options: $17,418,630

Current Obligation: $17,418,630

Actual Outlays: $17,064,271

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline