USDA awards $3.28M for canned tomato products to Red Gold, Inc. under full and open competition

Contract Overview

Contract Amount: $3,275,658 ($3.3M)

Contractor: RED Gold, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-12-12

End Date: 2026-03-31

Contract Duration: 109 days

Daily Burn Rate: $30.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011039/4100033464/TOMATO SAUCE CAN-24/300,SPAGHETTI SAUCE MEATLESS CAN-24/300

Place of Performance

Location: ORESTES, MADISON County, INDIANA, 46063

State: Indiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $3.3 million to RED GOLD, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011039/4100033464/TOMATO SAUCE CAN-24/300,SPAGHETTI SAUCE MEATLESS CAN-24/300 Key points: 1. The contract focuses on essential food commodities, indicating a stable demand for canned goods. 2. Full and open competition suggests a potentially competitive bidding process, which can drive better pricing. 3. The contract duration of approximately 10 months may reflect seasonal needs or specific project timelines. 4. The award to a single vendor, Red Gold, Inc., warrants a review of market concentration for these specific products. 5. The fixed-price contract type offers cost certainty for the government, mitigating budget risks. 6. The geographic location of the vendor (Indiana) could have implications for logistics and distribution.

Value Assessment

Rating: good

The contract value of $3.28 million for canned tomato products appears reasonable given the quantity and type of goods specified. Benchmarking against similar government procurements for bulk food items would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs for the government, but the absence of detailed unit pricing makes a granular comparison difficult without further data.

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 bids. The presence of 11 bids suggests a healthy level of interest and competition for this requirement. A robust competitive process generally leads to more favorable pricing and a wider selection of qualified vendors, benefiting the government.

Taxpayer Impact: The competitive nature of this procurement is beneficial for taxpayers, as it likely resulted in a more efficient use of funds and potentially lower prices than a less competitive award.

Public Impact

The primary beneficiaries are likely federal food assistance programs or agencies that rely on shelf-stable food items for distribution. The services delivered involve the procurement and supply of canned tomato sauce and spaghetti sauce. The geographic impact is national, as these food products are typically distributed through various federal channels across the United States. Workforce implications are primarily within the food processing and logistics sectors, supporting jobs at Red Gold, Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Red Gold, Inc. is a dominant supplier in this niche.
Reliance on a single vendor for a significant quantity of a staple food item could pose supply chain risks.
Limited visibility into the specific cost breakdown of the canned goods without detailed unit pricing.

Positive Signals

Awarded under full and open competition, suggesting a fair and accessible process.
Firm fixed-price contract provides budget certainty for the government.
The vendor, Red Gold, Inc., is an established entity in the food industry, implying experience and reliability.
The contract specifies standard food items, indicating alignment with established nutritional and quality guidelines.

Sector Analysis

This contract falls within the broader food manufacturing and processing sector, specifically focusing on canned goods. The market for canned fruits and vegetables is mature, with several large players. Government procurements like this represent a stable, albeit not the largest, segment of demand. Comparable spending benchmarks would involve analyzing other USDA or defense logistics agency contracts for similar food commodities.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The award to Red Gold, Inc., a large corporation, suggests that small businesses are unlikely to be direct beneficiaries of this specific award, though they may participate in the supply chain indirectly.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Agriculture's Agricultural Marketing Service, which awarded the contract. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified goods at the agreed price. Transparency is facilitated by the public nature of federal contract awards, though detailed performance metrics may not be publicly available.

Related Government Programs

USDA Food Purchase Programs
Defense Logistics Agency (DLA) Food Procurement
Federal Prison System Food Services
Commodity Supplemental Food Program

Risk Flags

Supply Chain Risk
Quality Control
Price Volatility of Raw Materials
Dependence on Single Supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.3 million to RED GOLD, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011039/4100033464/TOMATO SAUCE CAN-24/300,SPAGHETTI SAUCE MEATLESS CAN-24/300

Who is the contractor on this award?

The obligated recipient is RED GOLD, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.3 million.

What is the period of performance?

Start: 2025-12-12. End: 2026-03-31.

What is Red Gold, Inc.'s track record with federal food procurements?

Red Gold, Inc. has a history of supplying food products to the U.S. government. While specific details of past contracts are not provided here, their ability to win this $3.28 million award suggests they have successfully navigated federal procurement processes previously. Government contractors often have established compliance and quality control systems to meet federal standards. Further analysis would involve reviewing their contract history for performance ratings, past issues, and the types and volumes of commodities previously supplied to various agencies like the USDA or DLA. This would help assess their reliability and experience in fulfilling large-scale government orders.

How does the unit price of these canned goods compare to commercial market rates?

Without specific unit pricing data for the tomato sauce and spaghetti sauce in this contract, a direct comparison to commercial market rates is challenging. The contract value of $3.28 million covers 20,000 cases of each item (totaling 40,000 cases). If we assume an average case price, it would be approximately $81.89 per case ($3,275,657.90 / 40,000 cases). This figure needs to be broken down by product type and case size for a meaningful comparison. Commercial prices can vary significantly based on brand, quality, packaging, and purchase volume. Government contracts often achieve economies of scale, but also include administrative and compliance costs. A detailed analysis would require comparing the per-unit cost (e.g., per ounce or per can) against wholesale or bulk commercial pricing for similar products.

What are the primary risks associated with this contract?

Key risks include potential supply chain disruptions affecting Red Gold, Inc.'s ability to deliver the specified quantities on time, especially given the relatively short delivery window (ending March 31, 2026). Quality control is another risk; ensuring the canned goods meet federal specifications consistently is crucial. Price volatility for raw ingredients (tomatoes, other vegetables, packaging) could impact the vendor's profitability under a fixed-price contract, potentially leading to quality compromises if margins are squeezed, although this is less likely with an established supplier. Lastly, dependence on a single supplier for a large volume of a staple commodity could pose a risk if unforeseen circumstances lead to a default.

How effective is the firm fixed-price contract type in managing costs for this procurement?

The firm fixed-price (FFP) contract type is generally considered highly effective for managing costs when the scope of work is well-defined and risks related to cost overruns are relatively low. For the procurement of standardized commodities like canned tomato products, the FFP structure provides the government with maximum cost certainty. The contractor, Red Gold, Inc., bears the risk of cost overruns, incentivizing them to manage their expenses efficiently. This structure prevents unexpected price increases for the government, making budgeting more predictable. However, it also means the government may not benefit from potential cost savings if the contractor's actual costs are lower than anticipated, unless specific price reduction clauses are included.

What is the historical spending pattern for similar canned food commodities by the USDA?

The USDA consistently procures large quantities of canned and other shelf-stable food items to support various domestic and international food assistance programs. Historical spending data would likely show significant annual outlays for commodities such as canned fruits, vegetables, meats, and sauces. The Agricultural Marketing Service (AMS), which awarded this contract, often manages these procurements. Spending patterns can fluctuate based on appropriations, program needs (e.g., disaster relief, international aid), and market prices for agricultural goods. Analyzing past USDA spending reports would reveal trends in volume, types of commodities purchased, average prices paid, and the primary vendors involved, providing context for the current $3.28 million award.

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

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0019

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1500 TOMATO COUNTRY WAY, ELWOOD, IN, 46036

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,275,658

Exercised Options: $3,275,658

Current Obligation: $3,275,658

Actual Outlays: $722,988

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline