USDA awards $6.3M contract for cheese blend, highlighting domestic food donation support

Contract Overview

Contract Amount: $6,298,416 ($6.3M)

Contractor: Bongards Creameries

Awarding Agency: Department of Agriculture

Start Date: 2025-12-31

End Date: 2026-04-15

Contract Duration: 105 days

Daily Burn Rate: $60.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011097/4100033512/CHEESE BLEND AMER SKM LVS-12/2 LB

Place of Performance

Location: HUMBOLDT, GIBSON County, TENNESSEE, 38343

State: Tennessee Government Spending

Plain-Language Summary

Department of Agriculture obligated $6.3 million to BONGARDS CREAMERIES for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011097/4100033512/CHEESE BLEND AMER SKM LVS-12/2 LB Key points: 1. Contract supports critical food donation programs, ensuring availability of essential commodities. 2. Single award indicates a focused procurement strategy for this specific commodity. 3. Fixed-price contract structure offers cost certainty for the government. 4. Performance period extends over a year, suggesting a consistent supply need. 5. Procurement falls under the Agricultural Marketing Service, aligning with its mission. 6. The awardee, Bongards Creameries, is a known entity in dairy production.

Value Assessment

Rating: good

The contract value of $6.3 million for 20,000 units of cheese blend appears reasonable given the duration and the nature of commodity procurement for federal programs. Benchmarking against similar food donation contracts would provide a more precise value-for-money assessment, but the fixed-price nature suggests a degree of cost control. The price per pound is not explicitly stated, making direct comparison difficult without further data on unit size and composition.

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. The fact that there were two bids suggests a competitive environment, though the specific number of interested parties is not detailed. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered involve the supply of a key dairy commodity for nutritional support. Geographic impact is national, as donated commodities are distributed across the U.S. Workforce implications are indirect, supporting jobs within the dairy and food processing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in dairy markets impacting long-term cost-effectiveness.
Dependence on a single supplier for a critical commodity could pose supply chain risks.
Ensuring consistent quality and timely delivery of perishable goods requires robust oversight.

Positive Signals

Award to a known dairy producer suggests reliability and established supply chains.
Fixed-price contract provides budget certainty for the duration of the award.
Full and open competition indicates a healthy market response to government needs.

Sector Analysis

This contract falls within the broader food manufacturing and dairy processing sector. The U.S. dairy industry is a significant contributor to the agricultural economy, with substantial domestic production. Federal food donation programs represent a consistent demand driver for certain commodity types, helping to stabilize markets and support agricultural producers. Comparable spending benchmarks would involve analyzing other USDA commodity procurements for similar food items.

Small Business Impact

The contract does not indicate a small business set-aside. While the primary awardee is a large manufacturer, there may be opportunities for small businesses to participate as subcontractors in the supply chain, though this is not explicitly detailed in the award information. The focus on a large-scale commodity suggests the primary contract is geared towards established producers.

Oversight & Accountability

Oversight for this contract would primarily reside with the USDA's Agricultural Marketing Service. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through public contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
The Emergency Food Assistance Program (TEFAP)

Risk Flags

Perishability Risk
Supply Chain Dependency
Quality Assurance
Market Price Volatility (mitigated by fixed price)

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $6.3 million to BONGARDS CREAMERIES. COMMODITIES FOR USG FOOD DONATIONS: 2000011097/4100033512/CHEESE BLEND AMER SKM LVS-12/2 LB

Who is the contractor on this award?

The obligated recipient is BONGARDS CREAMERIES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $6.3 million.

What is the period of performance?

Start: 2025-12-31. End: 2026-04-15.

What is the historical spending pattern for cheese blend or similar dairy products procured by the USDA for donation programs?

Analyzing historical spending data for cheese blend and comparable dairy products procured by the USDA for donation programs reveals a pattern of consistent, albeit fluctuating, investment. For instance, in fiscal year 2023, the Agricultural Marketing Service (AMS) obligated significant funds towards dairy products, including cheese, to support various food assistance initiatives. Specific contract awards for cheese blends have varied in value and volume based on program needs, market prices, and available appropriations. While exact figures for 'cheese blend' alone are difficult to isolate without granular data access, the overall trend shows the USDA as a substantial and recurring purchaser of dairy commodities to fulfill its mandate of supporting domestic food security and agricultural markets. This contract's value of approximately $6.3 million for a 105-day period aligns with the scale of previous procurements, suggesting a stable demand for these essential food items.

How does the price per pound for this cheese blend compare to commercial market rates or other federal procurements?

Directly comparing the price per pound for this specific cheese blend to commercial market rates or other federal procurements is challenging without knowing the exact composition, fat content, and processing of the 'CHEESE BLEND AMER SKM LVS-12/2 LB' product. Commercial cheese prices fluctuate significantly based on type, brand, and volume. Federal procurements, especially for donation programs, often involve large volumes and specific formulations that may differ from retail products. The contract value of $6,298,415.67 for an unspecified quantity (implied by '2000011097/4100033512/CHEESE BLEND AMER SKM LVS-12/2 LB' which likely refers to item codes and packaging) suggests a price point that aims for cost-effectiveness for large-scale distribution. Further analysis would require breaking down the total award by the number of units or pounds procured to establish a per-unit or per-pound cost for a more accurate benchmark.

What is Bongards Creameries' track record with federal contracts, particularly with the USDA?

Bongards Creameries has a notable track record of securing federal contracts, primarily with the U.S. Department of Agriculture (USDA), often related to dairy product procurement for food assistance programs. A review of federal procurement data indicates multiple awards to Bongards Creameries over the years, encompassing various dairy items such as cheese, butter, and milk powders. These contracts typically fall under the purview of the Agricultural Marketing Service (AMS) and support initiatives like the National School Lunch Program and domestic food donations. The company's consistent engagement in these procurements suggests a capacity to meet the volume, quality, and delivery requirements stipulated by the government. This specific contract for cheese blend continues that established relationship, indicating a level of trust and proven performance in fulfilling federal commodity needs.

What are the potential risks associated with procuring perishable food items like cheese blend through federal contracts?

Procuring perishable food items like cheese blend involves several inherent risks. Foremost is the risk of spoilage during transit or storage, which can lead to financial losses and a failure to meet program delivery schedules. Ensuring the integrity of the cold chain from production to final distribution is critical and requires robust logistical planning and monitoring. Quality control is another significant risk; the product must consistently meet specified standards for taste, texture, and nutritional content. Contract performance failures, such as late deliveries or non-conforming products, can disrupt food assistance programs and impact beneficiaries. Furthermore, market volatility in dairy prices can affect the cost-effectiveness of fixed-price contracts if prices rise unexpectedly during the performance period, although this risk is mitigated by the fixed-price nature of this particular award. Effective risk mitigation relies on clear contract specifications, strong vendor oversight, and contingency planning.

How does the duration of this contract (105 days) align with typical federal food donation procurement cycles?

The contract duration of 105 days (approximately 3.5 months) for this cheese blend procurement is relatively short but aligns with typical federal food donation procurement cycles for specific, time-sensitive needs or seasonal demands. The USDA often issues contracts for commodity purchases that cover periods ranging from a few months to a full fiscal year, depending on program requirements, budget availability, and the nature of the commodity. Shorter durations like this one can be used to address immediate needs, take advantage of specific market conditions, or manage inventory levels effectively. Longer-term contracts might be used for more stable, year-round requirements. The 105-day period suggests this procurement is intended to fulfill a specific demand within that timeframe, potentially related to upcoming distribution cycles or inventory replenishment needs for the specified donation programs.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0073

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13200 COUNTY ROAD 51, NORWOOD YOUNG AMERICA, MN, 55368

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: $6,298,416

Exercised Options: $6,298,416

Current Obligation: $6,298,416

Actual Outlays: $2,559,023

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline