USDA awards $7.97M contract for frozen chicken to Tyson Foods, Inc. for 111 days

Contract Overview

Contract Amount: $7,973,282 ($8.0M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-12-11

End Date: 2026-04-01

Contract Duration: 111 days

Daily Burn Rate: $71.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011056/4100033445/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB,CHICKEN WHOLE BAGGED FRZ CTN-36-43 LB

Place of Performance

Location: NEW HOLLAND, LANCASTER County, PENNSYLVANIA, 17557

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $8.0 million to TYSON FOODS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011056/4100033445/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB,CHICKEN WHOLE BAGGED FRZ CTN-36-43 LB Key points: 1. Contract value appears reasonable for the specified quantity and duration, pending detailed cost analysis. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a definitive contract with a firm fixed price, indicating price certainty. 4. Performance is expected to occur over approximately 3.7 months. 5. The contract falls under the Poultry Processing industry. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: good

The contract value of $7.97 million for approximately 111 days of frozen chicken supply seems within a reasonable range for bulk commodity procurement. Benchmarking against historical USDA food donation contracts for similar quantities and types of poultry would provide a more precise value-for-money assessment. The firm fixed price structure helps manage cost risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 5 bidders suggests a healthy level of competition for this requirement. This competitive environment is generally expected to drive more favorable pricing for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining competitive pricing and ensures that the government is not limited to a single provider, potentially leading to cost savings.

Public Impact

This contract will support the U.S. government's food donation programs, likely benefiting food banks and charitable organizations nationwide. The services delivered involve the provision of frozen, oven-roasted, and whole bagged chicken. The geographic impact is national, as the food donations are distributed across the United States. The contract supports the poultry processing industry and its associated workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the poultry market impacting long-term value if not managed.
Ensuring consistent quality and timely delivery of perishable goods is crucial.

Positive Signals

Firm fixed price contract provides cost certainty.
Full and open competition suggests a competitive market for this commodity.
Award to a known entity like Tyson Foods, Inc. may indicate reliability.

Sector Analysis

The procurement of bulk food commodities like frozen chicken is a recurring need for government agencies involved in food assistance programs. The market for poultry processing is large and competitive, with several major players capable of fulfilling such contracts. This specific contract fits within the broader category of government procurement for food supplies, often managed by the Department of Agriculture to support domestic and international food aid initiatives.

Small Business Impact

This contract did not include a small business set-aside, as indicated by the 'sb' field being false. Therefore, the primary award went to a large business. There is no explicit information provided regarding subcontracting plans with small businesses. The impact on the small business ecosystem is likely minimal unless Tyson Foods engages them as subcontractors.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of Agriculture's Agricultural Marketing Service. Oversight would typically involve contract administration by the contracting officer and potentially review by the USDA's Office of Inspector General, especially concerning program effectiveness and financial integrity. Transparency is facilitated through public contract databases.

Related Government Programs

USDA Food Purchase for Protection Program
National School Lunch Program
Commodity Supplemental Food Program
Food Bank Support Programs

Risk Flags

Supply Chain Risk
Quality Control Risk
Market Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $8.0 million to TYSON FOODS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011056/4100033445/CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB,CHICKEN WHOLE BAGGED FRZ CTN-36-43 LB

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 $8.0 million.

What is the period of performance?

Start: 2025-12-11. End: 2026-04-01.

What is Tyson Foods, Inc.'s track record with similar USDA contracts?

Tyson Foods, Inc. is a major player in the food industry and has a history of supplying poultry products to various government agencies, including the USDA. While specific details of past contracts require further investigation, their established presence suggests experience in meeting government procurement requirements. Analyzing past performance reviews, delivery history, and any past disputes or corrective actions related to USDA contracts would provide a clearer picture of their reliability and adherence to contract terms. This includes examining their capacity to handle large-volume orders and maintain quality standards consistently over the contract duration.

How does the price per pound for this chicken compare to market rates?

To assess the value for money, the price per pound needs to be calculated and compared to prevailing market rates for similar quality frozen chicken. The total contract value is $7,973,281.90 for an unspecified total weight, but the description mentions 'CHICKEN OVEN ROASTED FRZ 8 PC CTN-30 LB' and 'CHICKEN WHOLE BAGGED FRZ CTN-36-43 LB'. Assuming an average of 35 lbs per carton and estimating the number of cartons based on typical order sizes for such contracts would be necessary. If, for example, the contract implied a total of 200,000 lbs of chicken, the price per pound would be approximately $39.87. This figure would then need to be benchmarked against wholesale prices for frozen chicken, considering factors like grade, cut, and packaging, to determine if it represents a fair market price or a potential overpayment.

What are the primary risks associated with this contract?

Key risks for this contract include supply chain disruptions affecting the availability or timely delivery of the frozen chicken, especially given the short performance period. Quality control is another significant risk; ensuring the frozen chicken meets all specifications (e.g., temperature, packaging, absence of defects) is critical for food safety and program integrity. Price volatility in the poultry market, although mitigated by the firm fixed price, could pose a risk if market prices rise substantially above the contracted rate, potentially impacting the supplier's profitability and commitment. Lastly, logistical challenges in distributing the product to various donation points could also present a risk.

How effective are USDA food donation programs in achieving their objectives?

USDA food donation programs, such as those supported by this contract, are generally effective in addressing food insecurity by providing essential food items to vulnerable populations through a network of food banks and charitable organizations. They help reduce food waste by purchasing surplus commodities and redirecting them to those in need. The programs contribute to agricultural market stability by providing a consistent outlet for certain commodities. However, effectiveness can be measured by various metrics, including the reach of the programs, the nutritional quality of the food distributed, and the efficiency of the distribution network. Challenges can include logistical complexities and ensuring the food reaches the intended recipients promptly and in good condition.

What is the historical spending trend for similar poultry procurements by the USDA?

Historical spending on similar poultry procurements by the USDA can be analyzed to understand trends in volume, pricing, and supplier concentration. Over the past several years, USDA has consistently procured significant quantities of poultry products to support its various food assistance initiatives. Spending levels can fluctuate based on agricultural market conditions, program funding, and specific policy priorities. Examining data from previous fiscal years would reveal whether the current $7.97 million award is consistent with historical patterns, higher, or lower, and identify any shifts in the types of poultry products procured or the primary suppliers utilized.

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: 123J1426B0033

Offers Received: 5

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: $7,973,282

Exercised Options: $7,973,282

Current Obligation: $7,973,282

Actual Outlays: $6,046,430

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline