USDA's $5.8M contract for canned applesauce awarded to Cherry Central Cooperative, Inc

Contract Overview

Contract Amount: $5,806,831 ($5.8M)

Contractor: Cherry Central Cooperative, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-02-28

End Date: 2026-04-09

Contract Duration: 405 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010630/4100031823/APPLESAUCE CAN-24/300

Place of Performance

Location: LUDINGTON, MASON County, MICHIGAN, 49431

State: Michigan Government Spending

Plain-Language Summary

Department of Agriculture obligated $5.8 million to CHERRY CENTRAL COOPERATIVE, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010630/4100031823/APPLESAUCE CAN-24/300 Key points: 1. Value for money appears fair given the fixed-price nature of the contract. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are low due to the firm fixed-price contract type and established vendor. 4. Performance context is within the scope of agricultural marketing and food distribution. 5. Sector positioning is within the broader food and agriculture industry, supporting federal food assistance programs.

Value Assessment

Rating: fair

The contract value of $5.8 million for canned applesauce appears reasonable for the quantity and duration. As a firm fixed-price contract, the government has locked in its cost, shifting potential cost overruns to the contractor. Benchmarking against similar federal food procurement contracts for canned goods would provide a more precise value assessment, but the price seems aligned with market expectations for bulk food items.

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 while the process was open, specific sources may have been excluded for defined reasons. The presence of 8 bidders suggests a healthy level of competition, which typically drives down prices and encourages efficiency. The competitive nature of the bidding process is a positive sign for price discovery and ensuring taxpayer funds are used effectively.

Taxpayer Impact: The robust competition for this contract suggests that taxpayers are likely benefiting from a competitive price, as multiple vendors vied for the opportunity to supply the U.S. government.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, likely including domestic and international food assistance initiatives. Services delivered involve the procurement and supply of canned applesauce, a staple food item. Geographic impact is primarily focused on Michigan, the state of the contractor, Cherry Central Cooperative, Inc. Workforce implications may include employment opportunities within Cherry Central Cooperative and its supply chain, particularly in agricultural processing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Quality control issues with canned goods could arise if not rigorously monitored.
Price fluctuations in raw materials (apples) could impact contractor profitability, though the fixed-price contract mitigates this for the government.

Positive Signals

Established cooperative structure of Cherry Central suggests a stable and experienced supplier.
Firm fixed-price contract provides cost certainty for the government.
Full and open competition indicates a competitive market for this commodity.

Sector Analysis

The contract falls within the broader food manufacturing and agricultural products sector. This sector is characterized by large-scale production, complex supply chains, and significant government involvement through procurement for food assistance programs. Comparable spending benchmarks would involve analyzing other federal contracts for canned fruits and vegetables, which are essential components of domestic and international food aid.

Small Business Impact

The contract does not appear to have a small business set-aside component, as indicated by 'sb': false. However, the prime contractor, Cherry Central Cooperative, Inc., may engage small businesses as subcontractors for various services such as transportation, packaging, or raw material sourcing. The impact on the small business ecosystem would depend on the extent of subcontracting opportunities created.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Department of Agriculture's Agricultural Marketing Service (AMS). AMS is responsible for ensuring contract compliance, quality standards, and timely delivery. Accountability measures are embedded in the contract terms, including performance clauses and payment schedules tied to successful fulfillment. Transparency is facilitated through federal contract databases where such awards are publicly reported.

Related Government Programs

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

Risk Flags

Potential for supply chain disruptions
Quality control of perishable goods
Timeliness of delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $5.8 million to CHERRY CENTRAL COOPERATIVE, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010630/4100031823/APPLESAUCE CAN-24/300

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 $5.8 million.

What is the period of performance?

Start: 2025-02-28. End: 2026-04-09.

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

Analyzing historical spending data for canned applesauce by the USDA would reveal trends in contract values, awardees, and competition levels over time. This contract, valued at $5.8 million, represents a significant procurement. Understanding past expenditures can help contextualize the current award, identify any anomalies, and forecast future needs. For instance, if spending has been consistently high, it suggests a sustained demand for this commodity within federal food programs. Conversely, a sudden increase might warrant investigation into program expansions or changes in dietary guidelines. Benchmarking this award against previous years' average contract values and quantities would provide a clearer picture of its relative scale and significance.

How does the price per unit for this applesauce contract compare to market rates or similar government contracts?

Without specific unit quantity data (e.g., number of cans or total weight), a precise per-unit cost comparison is challenging. However, the total contract value of $5.8 million over a period of approximately 14 months (February 2025 to April 2026) suggests an average annual spend of roughly $4.14 million. To benchmark effectively, one would need to determine the total volume (e.g., number of 300-count cases or total pounds) procured under this contract. This volume could then be divided into the total contract value to derive a per-unit cost. This figure would then be compared against prevailing wholesale prices for canned applesauce and prices paid under similar USDA or other federal agency contracts for comparable products. A higher-than-market or higher-than-comparable-contract price could indicate potential value-for-money concerns, while a lower price would suggest favorable negotiation or competitive pressure.

What is the track record of Cherry Central Cooperative, Inc. in fulfilling government contracts?

Cherry Central Cooperative, Inc. has a history of receiving federal contracts, as evidenced by this award. A thorough assessment of their track record would involve reviewing past performance evaluations, any instances of contract disputes, late deliveries, or quality issues. Examining their history with the USDA and other agencies can provide insights into their reliability, capacity, and adherence to contractual obligations. Positive past performance, indicated by favorable ratings and successful completion of previous agreements, suggests a lower risk for this current contract. Conversely, a history of performance issues might raise concerns about the contractor's ability to meet the demands of this $5.8 million award, potentially impacting the continuity and effectiveness of food donation programs.

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

Potential risks for this contract include supply chain disruptions affecting the availability of raw materials (apples) or finished product, quality control issues with the canned goods, and potential delays in delivery. The mitigation strategies are primarily embedded within the contract structure. The firm fixed-price (FFP) nature shifts cost-related risks to the contractor. The contract duration (405 days) and specified delivery schedules provide a framework for timely execution. The USDA's Agricultural Marketing Service (AMS) will likely implement quality assurance checks and monitor delivery performance. Furthermore, the fact that Cherry Central Cooperative, Inc. is a cooperative with established agricultural ties may inherently reduce risks related to raw material sourcing and production stability.

How does this contract align with the USDA's broader mission regarding food security and agricultural support?

This contract directly aligns with the USDA's mission to support American agriculture and ensure food security. By procuring canned applesauce from a U.S.-based cooperative like Cherry Central, the USDA is supporting domestic agricultural producers and food processors. The applesauce procured will likely be distributed through various federal food assistance programs (e.g., food banks, school meal programs, disaster relief), thereby addressing food insecurity among vulnerable populations. This procurement action serves a dual purpose: it provides a market for agricultural commodities and processed foods, bolstering the agricultural economy, while simultaneously fulfilling the government's commitment to providing nutritious food to those in need.

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: 123J1425B0214

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1771 N US 31 S, TRAVERSE CITY, MI, 49685

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: $5,806,831

Exercised Options: $5,806,831

Current Obligation: $5,806,831

Actual Outlays: $5,806,424

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline