Leprino Foods Dairy Products Co. awarded $5.6M for cheese, with delivery orders impacting New Mexico

Contract Overview

Contract Amount: $5,574,700 ($5.6M)

Contractor: Leprino Foods Dairy Products CO

Awarding Agency: Department of Agriculture

Start Date: 2025-09-08

End Date: 2025-12-31

Contract Duration: 114 days

Daily Burn Rate: $48.9K/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: 2000011001/4400002388/4100032885/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 $5.6 million to LEPRINO FOODS DAIRY PRODUCTS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011001/4400002388/4100032885/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125) Key points: 1. Contract awarded to a single, established supplier of dairy products. 2. Pricing structure includes economic adjustments, potentially increasing final cost. 3. Limited competition may affect overall value for taxpayer funds. 4. Contract duration is relatively short, suggesting a focused need. 5. Geographic focus on New Mexico for delivery. 6. This award falls under commodity procurement for government food donations.

Value Assessment

Rating: fair

The contract value of $5.6 million for cheese procurement appears within a reasonable range for bulk commodity purchases. However, without specific details on the type and quantity of cheese, a precise value-for-money assessment is challenging. The fixed-price with economic price adjustment (FPEPA) structure introduces a risk of cost escalation, which needs to be monitored. Benchmarking against similar large-scale dairy procurements would provide further context on whether this represents a competitive price point.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the data provided does not specify the number of bids received or the nature of the competition. A high level of competition typically drives down prices and increases value for the government. The fact that it was competed fully is a positive sign for price discovery.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of offers, potentially leading to lower prices and better terms for government purchases.

Public Impact

Beneficiaries include recipients of USG food donation programs. Services delivered involve the supply of processed mozzarella cheese. Geographic impact is concentrated in New Mexico for delivery. The contract supports the agricultural sector by procuring dairy products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to higher-than-anticipated costs.
Lack of detail on the specific type and quality of cheese makes direct value comparison difficult.
Potential for limited future competition if this supplier becomes entrenched.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Contract supports a critical government function (food donations).
Established supplier likely ensures reliable product delivery.

Sector Analysis

This contract falls within the broader food manufacturing and dairy processing sector. The U.S. dairy industry is a significant part of the agricultural economy, with substantial government involvement through programs like food donations and price support. Commodity procurement for government use represents a stable demand stream for producers. Comparable spending benchmarks would involve analyzing other large-scale food commodity contracts awarded by agencies like USDA.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses are not detailed in this award notice, but typically large commodity contracts may have limited direct subcontracting requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. Standard procurement regulations and contract management practices would apply. Transparency is facilitated by the public nature of contract awards. The Inspector General's office for the USDA would have jurisdiction over any potential fraud, waste, or abuse related to this procurement.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement
Dairy Product Manufacturing
Federal Food Assistance

Risk Flags

Potential for cost escalation due to economic price adjustment.
Limited visibility into the number of bidders in the full and open competition.
No explicit small business set-aside or subcontracting plan mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $5.6 million to LEPRINO FOODS DAIRY PRODUCTS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000011001/4400002388/4100032885/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 $5.6 million.

What is the period of performance?

Start: 2025-09-08. End: 2025-12-31.

What is the specific type and quality of the 'CHEESE MOZ LM PT SKM UNFZ PROC PK' being procured, and how does it align with the needs of USG food donation programs?

The designation 'CHEESE MOZ LM PT SKM UNFZ PROC PK' likely refers to Low-Moisture, Part-Skim, Unfrozen, Processed Packaged Mozzarella Cheese. This type of cheese is commonly used in food service and retail due to its versatility, meltability, and shelf stability. For USG food donation programs, this specification suggests a product suitable for distribution to food banks, shelters, and other charitable organizations. The 'LM' (Low-Moisture) aspect is crucial for applications where excessive water content is undesirable, such as in cooked meals or pizzas. 'PT SKM' (Part-Skim) indicates a reduced fat content compared to whole milk mozzarella, which can be a factor in nutritional guidelines for food assistance programs. 'UNFZ' (Unfrozen) means the product is delivered in a chilled or ambient state, simplifying logistics and storage for recipients. 'PROC' (Processed) implies it may contain additional ingredients for texture or preservation, common in packaged cheese products. The exact quality standards would be detailed in the solicitation's specifications, but this type of mozzarella is generally chosen for its balance of cost, usability, and consumer acceptance in donated food packages.

How does the fixed-price with economic price adjustment (FPEPA) clause impact the final cost certainty for this cheese procurement?

The Fixed-Price with Economic Price Adjustment (FPEPA) clause introduces a degree of uncertainty regarding the final cost of the cheese. While the base price is fixed, the 'economic price adjustment' allows for modifications to the contract price based on fluctuations in specific economic indicators, typically related to input costs such as raw milk prices, labor, energy, or transportation. For this contract, it means that Leprino Foods Dairy Products Co. is protected against significant increases in their production costs during the contract period. Conversely, if input costs decrease, the government might benefit from a price reduction, though this is less common with upward-trending commodity markets. The specific index or formula used for the economic price adjustment is critical. Without knowing this, it's difficult to quantify the potential variance. However, for taxpayers, this clause means the final expenditure could exceed the initial $5.6 million award amount, depending on market conditions between the contract award and the delivery period (ending December 31, 2025). Careful monitoring of the price adjustment mechanism is essential for fiscal oversight.

What is Leprino Foods Dairy Products Co.'s track record with federal contracts, particularly with the Department of Agriculture?

Leprino Foods Dairy Products Co. is a major global producer of mozzarella cheese and other dairy ingredients. As a large-scale manufacturer, it is highly probable that they have a history of engaging in federal contracts, especially with the Department of Agriculture (USDA), which frequently procures food commodities for various domestic and international programs. While specific details of their past federal contract performance are not provided in this award notice, their established position in the market suggests they possess the capacity and experience to meet government requirements. Federal procurement databases would likely contain records of previous awards to Leprino Foods. A thorough review of these records would reveal their performance history, including any instances of contract disputes, timely delivery, quality compliance, and overall satisfaction from contracting agencies. Given the scale of their operations, it is reasonable to assume they have successfully managed numerous government orders in the past.

How does the $5.6 million award compare to historical federal spending on similar cheese or dairy commodity procurements?

Comparing the $5.6 million award for cheese to historical federal spending requires access to comprehensive federal procurement data. The USDA is the primary agency involved in large-scale food commodity purchases for donation and assistance programs. Historical data would reveal the average contract values, quantities procured, and pricing trends for similar items like mozzarella cheese over previous fiscal years. Factors influencing historical spending include overall budget allocations for food assistance, market prices for dairy products, and the specific needs of donation programs. For instance, if federal budgets for food donations have increased, spending on commodities like cheese might also rise. Conversely, if dairy market prices have been volatile, contract values could fluctuate significantly. Without specific historical benchmarks for 'CHEESE MOZ LM PT SKM UNFZ PROC PK' procured by the USDA, it's challenging to definitively state whether this $5.6 million award represents an increase, decrease, or is in line with past spending. However, it signifies a substantial commitment to acquiring this specific dairy product for federal programs.

What are the potential risks associated with a single award to Leprino Foods Dairy Products Co. for this specific commodity?

While the award was made under full and open competition, the fact that it went to a single entity, Leprino Foods Dairy Products Co., for this specific commodity carries certain risks. Firstly, there's a risk of over-reliance on a single supplier. If Leprino Foods encounters unforeseen production issues, supply chain disruptions, or quality control problems, it could directly impact the availability of cheese for the government's food donation programs. This could lead to shortages or delays in fulfilling program needs. Secondly, although competed initially, the long-term market dynamics might shift. If this contract is repeatedly awarded to the same supplier without robust re-competition, it could potentially stifle future competition and lead to less favorable pricing in subsequent procurements. Lastly, the economic price adjustment clause, while protecting the contractor, introduces cost uncertainty for the government, as mentioned previously. Managing these risks involves close contract administration, performance monitoring, and ensuring that future solicitations genuinely encourage broad market participation.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1425B0304

Offers Received: 5

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

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: $5,574,700

Exercised Options: $5,574,700

Current Obligation: $5,574,700

Actual Outlays: $5,360,449

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0031

IDV Type: IDC

Timeline