Tyson Foods awarded $25.4M contract for chilled chicken, highlighting significant government procurement in poultry processing

Contract Overview

Contract Amount: $25,410,924 ($25.4M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-12-11

End Date: 2026-02-28

Contract Duration: 79 days

Daily Burn Rate: $321.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011083/4100033455/CHICKEN LARGE CHILLED -BULK

Place of Performance

Location: NEW HOLLAND, LANCASTER County, PENNSYLVANIA, 17557

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $25.4 million to TYSON FOODS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011083/4100033455/CHICKEN LARGE CHILLED -BULK Key points: 1. The contract value of $25.4 million indicates substantial government demand for essential food commodities. 2. The award to a single, large supplier like Tyson Foods suggests a focus on established supply chains for critical needs. 3. The firm-fixed-price structure aims to provide cost certainty for the government, mitigating budget risks. 4. The relatively short duration of 79 days points to an immediate or seasonal need for these food supplies. 5. The procurement falls under the Agricultural Marketing Service, indicating a role in supporting agricultural markets and food security. 6. The absence of small business set-aside flags suggests this was a large-scale procurement likely beyond the typical scope for smaller enterprises.

Value Assessment

Rating: good

The contract value of $25.4 million for 20,000,000 lbs of chicken is substantial. Benchmarking against similar government food donation contracts is challenging without more specific commodity details and volume comparisons. However, the firm-fixed-price nature suggests the government has negotiated a set price, which is generally favorable for budget predictability. The price per pound, approximately $1.27, appears reasonable for bulk, chilled chicken, especially considering the scale and potential for specialized handling required for government distribution.

Cost Per Unit: Approximately $1.27 per pound.

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The fact that it resulted in a definitive contract awarded to Tyson Foods Inc. suggests they offered the best value among the competing entities. The presence of 8 bids (no=8) demonstrates a healthy level of interest and competition for this requirement, which typically leads to more competitive pricing for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages quality service delivery.

Public Impact

The primary beneficiaries are likely individuals and families receiving food assistance through government donation programs. The contract ensures the supply of a key protein source (chicken) for these vital food programs. The geographic impact is broad, as the donated food will be distributed across various regions served by the USDA's food donation initiatives. This procurement supports the agricultural sector by providing a consistent demand for poultry products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations if market conditions change significantly during the contract period, although the firm-fixed-price mitigates this.
Dependence on a single large supplier could pose a risk if supply chain disruptions occur.
Ensuring consistent quality and timely delivery across a potentially wide distribution network.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm-fixed-price contract provides budget certainty for the government.
Award to a well-established supplier like Tyson Foods suggests reliability and capacity.
The contract supports critical government food assistance programs.

Sector Analysis

This contract falls within the broader food and agriculture sector, specifically focusing on poultry processing and distribution. The U.S. government is a significant purchaser of agricultural commodities for various programs, including domestic food assistance and international aid. Spending in this area is influenced by agricultural policy, food security initiatives, and budget allocations for programs managed by agencies like the USDA. Comparable spending benchmarks would involve analyzing other large-scale government contracts for protein sources or staple food items procured for similar purposes.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions (ss=false, sb=false). This suggests that the procurement was not specifically targeted towards small businesses, likely due to the scale and nature of the requirement. While there are no direct subcontracting implications explicitly stated, large prime contractors like Tyson Foods often engage with a network of suppliers, which may include small businesses for various support services or components. However, the primary focus of this award is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Agricultural Marketing Service (AMS) within the USDA. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Accountability measures would include performance monitoring against contract requirements, delivery schedules, and quality standards. Transparency is generally maintained through contract databases like SAM.gov, where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

USDA Food Donation Programs
National School Lunch Program (commodity purchases)
Food and Nutrition Service (FNS) programs
Commodity Supplemental Food Program
Emergency Food Assistance Program (TEFAP)

Risk Flags

Potential supply chain disruption risk
Dependence on large prime contractor
Ensuring equitable distribution to beneficiaries

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $25.4 million to TYSON FOODS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011083/4100033455/CHICKEN LARGE CHILLED -BULK

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 $25.4 million.

What is the period of performance?

Start: 2025-12-11. End: 2026-02-28.

What is the historical spending pattern for similar chicken procurement contracts by the USDA?

Analyzing historical spending for similar USDA chicken procurement contracts requires access to detailed historical contract data. Generally, the USDA procures large quantities of poultry products annually to support various domestic food assistance programs. Spending can fluctuate based on program needs, appropriations, and market prices. For instance, during periods of increased food insecurity or specific program expansions, procurement volumes and associated spending may rise. Conversely, budget constraints or shifts in agricultural policy could lead to decreased spending. The average contract value and volume for chilled chicken over the past five years would provide a clearer picture of typical spending patterns and whether this $25.4 million award represents a significant deviation or aligns with historical norms.

How does the price per pound of this contract compare to market rates for bulk chilled chicken?

The price per pound for this contract is approximately $1.27. To assess its competitiveness against market rates, one would need to compare this figure with current wholesale or bulk pricing for similar quality chilled chicken in the relevant geographic regions. Market rates can vary based on factors such as feed costs, seasonal demand, processing capacity, and transportation expenses. If the market rate is significantly lower, it might suggest the government did not secure the most advantageous pricing. Conversely, if it aligns with or is slightly above market rates, it could reflect the added costs associated with government contracting, such as stringent quality control, specific packaging, and delivery logistics, or simply reflect competitive bidding outcomes.

What are the specific quality and safety standards required for the chicken under this contract?

While the provided data does not detail the specific quality and safety standards, government contracts for food commodities, especially those intended for donation or distribution, typically adhere to stringent requirements. These often include compliance with USDA inspection standards (e.g., USDA-FSIS), specifications for grade (e.g., Grade A), temperature controls during transport and storage (maintaining the 'chilled' state), and potentially specific nutritional content or processing methods. The contract documents would outline these precise specifications, ensuring the food is safe for consumption and meets the nutritional needs of the intended recipients. Failure to meet these standards would likely result in contract non-compliance.

What is Tyson Foods Inc.'s track record with government contracts, particularly for food commodities?

Tyson Foods Inc. is a major player in the food industry and has a significant history of supplying products to the U.S. government, including through various USDA programs. Their track record typically involves large-scale contracts for meat and poultry products. While specific performance metrics for past contracts are not detailed here, their continued success in securing substantial government awards suggests a generally positive performance history regarding capacity, quality, and delivery. Government contract databases often contain past performance information, which would be reviewed during the bidding process to assess a contractor's reliability and capability.

What is the intended use and distribution mechanism for the chicken procured under this contract?

The contract specifies 'COMMODITIES FOR USG FOOD DONATIONS.' This indicates the chicken is intended for distribution through various U.S. government food assistance programs. These programs aim to alleviate hunger and improve nutrition among vulnerable populations, including low-income families, seniors, and children. The distribution mechanism typically involves the USDA's Agricultural Marketing Service (AMS) coordinating with state and local agencies, food banks, and other charitable organizations. The chicken would be shipped to designated distribution points where it is then made available to eligible recipients, often as part of food packages or direct distribution events.

Are there any specific sustainability or ethical sourcing requirements included in this contract?

The provided data does not explicitly mention sustainability or ethical sourcing requirements for this specific contract. However, government procurement policies are increasingly incorporating such considerations. Depending on the specific solicitation and agency priorities, contracts may include clauses related to environmental impact, labor practices, or animal welfare. For large commodity contracts, these requirements might be addressed through adherence to general industry best practices or specific certifications. A thorough review of the full contract solicitation and award documents would be necessary to determine if any such stipulations were included beyond standard food safety and quality mandates.

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: 123J1426B0060

Offers Received: 8

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: $25,410,924

Exercised Options: $25,410,924

Current Obligation: $25,410,924

Actual Outlays: $25,410,924

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline