Tyson Foods awarded $11.5M contract for chicken, highlighting significant government food procurement needs

Contract Overview

Contract Amount: $11,496,240 ($11.5M)

Contractor: Tyson Foods Inc.

Awarding Agency: Department of Agriculture

Start Date: 2026-01-13

End Date: 2026-03-31

Contract Duration: 77 days

Daily Burn Rate: $149.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011115/4100033575/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 $11.5 million to TYSON FOODS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011115/4100033575/CHICKEN LARGE CHILLED -BULK Key points: 1. Contract value represents a substantial investment in food commodities for federal programs. 2. Full and open competition suggests a potentially competitive bidding environment for this type of good. 3. The firm-fixed-price structure aims to provide cost certainty for the government. 4. Contract duration of 77 days indicates a short-term need for immediate supply. 5. The award to a single large contractor raises questions about broader supplier engagement. 6. Geographic focus on Pennsylvania for delivery may point to specific regional program requirements.

Value Assessment

Rating: good

The contract value of $11.5 million for chicken is significant, but without specific quantity or quality benchmarks, a direct value-for-money assessment is challenging. Compared to typical government food procurements, this amount falls within a common range for large-scale commodity purchases. The firm-fixed-price contract type is generally favorable for the government, locking in costs and mitigating risk of overruns. However, the benchmarked per-unit cost is not provided, making a precise pricing comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With seven bidders participating, the level of competition appears robust, which typically drives better pricing and value for the government. This broad participation suggests that the market for this commodity is accessible and that the government likely received competitive offers.

Taxpayer Impact: A competitive bidding process with multiple bidders generally leads to more favorable pricing for taxpayers, ensuring that government funds are used efficiently.

Public Impact

Beneficiaries include recipients of USG food donation programs, potentially including domestic food banks or international aid. Services delivered involve the supply of large, chilled chicken, a key protein source. Geographic impact is primarily focused on Pennsylvania, where the chicken will be delivered. Workforce implications are indirect, supporting jobs within Tyson Foods' poultry processing and logistics operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Concentration of award to a single large business could limit opportunities for smaller suppliers in the food commodity market.
Lack of specific performance metrics makes it difficult to assess the quality and timeliness of delivery beyond contract fulfillment.

Positive Signals

Full and open competition signals a healthy market and potential for competitive pricing.
Firm-fixed-price contract provides cost certainty and reduces financial risk for the government.
Award to a well-established supplier like Tyson Foods suggests reliability in meeting large-scale commodity needs.

Sector Analysis

The procurement of food commodities like chicken is a critical function within the federal government, supporting various domestic and international assistance programs. The market for poultry processing and distribution is large and competitive, with numerous players ranging from small farms to multinational corporations. This contract fits within the broader category of government procurement for essential goods, often managed by agencies like the Department of Agriculture to ensure food security and support agricultural markets. Comparable spending benchmarks for similar large-scale commodity contracts can vary widely based on market fluctuations and specific product requirements.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Tyson Foods, a large corporation, suggests that the primary focus was on securing a large volume of product from a major supplier. This approach may limit direct opportunities for small businesses to participate in this specific federal procurement, although they may be suppliers to the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. The firm-fixed-price contract type provides a degree of financial oversight by locking in costs. Transparency is generally maintained through contract award databases. Specific performance monitoring and accountability measures would be detailed within the contract's terms and conditions, with potential for review by the USDA's Office of Inspector General if performance issues arise.

Related Government Programs

USDA Food Donation Programs
National School Lunch Program
Commodity Supplemental Food Program
Federal Food Purchase Programs

Risk Flags

Potential for supply chain disruption
Risk of quality degradation due to chilled product requirements
Dependence on a single large contractor for critical supply

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $11.5 million to TYSON FOODS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011115/4100033575/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 $11.5 million.

What is the period of performance?

Start: 2026-01-13. End: 2026-03-31.

What is the historical spending pattern for chicken procurement by the Department of Agriculture?

Historical spending data for chicken procurement by the Department of Agriculture (USDA) reveals a consistent need for this commodity to support various food assistance programs. While specific annual figures fluctuate based on program needs, budget allocations, and market prices, the USDA regularly procures significant quantities of poultry. For instance, in recent fiscal years, spending on poultry products, including chicken, has often been in the tens to hundreds of millions of dollars annually across different programs like the National School Lunch Program and food donation initiatives. This particular $11.5 million contract for large chilled chicken is indicative of ongoing, substantial government demand for protein sources to fulfill its domestic and international food security commitments. Analyzing trends over several years would show the variability influenced by factors such as agricultural output, global supply chains, and specific policy priorities.

How does the per-unit cost of this chicken contract compare to market rates or similar government contracts?

A precise comparison of the per-unit cost for this $11.5 million chicken contract against market rates or similar government contracts is not feasible with the provided data alone. The contract specifies 'LARGE CHILLED CHICKEN - BULK' but lacks the exact quantity (e.g., pounds or number of units) required. To benchmark effectively, one would need to know the total weight or count of chicken procured. Government contracts often include detailed specifications that can influence pricing, such as specific cuts, quality standards (e.g., USDA Grade A), packaging requirements, and delivery schedules. Without these details and the total quantity, calculating a comparable per-pound or per-unit cost is impossible. However, the firm-fixed-price nature suggests the government aimed for cost certainty, and the full and open competition with seven bidders implies a competitive price was likely achieved relative to the specified product.

What is Tyson Foods Inc.'s track record with federal food procurement contracts?

Tyson Foods Inc. has a significant and established track record as a major supplier of poultry and other food products to the U.S. government. As one of the largest food production companies globally, Tyson frequently participates in and wins federal contracts for various food commodities. These contracts often support programs administered by the Department of Agriculture (USDA), such as food donations, school lunch programs, and military feeding operations. Their history typically involves fulfilling large-volume orders under various contract types, including firm-fixed-price agreements. While specific contract performance details (e.g., on-time delivery rates, quality compliance) are not detailed here, Tyson's consistent presence in federal procurement suggests a generally reliable capacity to meet government requirements. Any past performance issues would typically be documented in government contract databases or agency performance reviews.

What are the potential risks associated with this specific chicken supply contract?

Several potential risks are associated with this specific chicken supply contract, primarily revolving around supply chain and quality. Given the short duration (77 days) and the need for 'LARGE CHILLED CHICKEN,' disruptions in the supply chain due to weather, disease outbreaks affecting poultry, or transportation issues could impact timely delivery. The 'chilled' nature of the product also introduces risks related to maintaining the cold chain during transport and storage to prevent spoilage and ensure food safety. While the firm-fixed-price contract mitigates cost overrun risks for the government, there's a potential risk that the contractor might face challenges in meeting quality specifications consistently under pressure to deliver large volumes quickly. Furthermore, reliance on a single large contractor, even from a competitive bid, could pose a risk if that contractor experiences unforeseen operational problems.

How does this contract align with the USDA's mission regarding food security and agricultural support?

This contract directly aligns with the USDA's mission in several key areas. Firstly, by procuring chicken, the USDA is supporting the domestic poultry industry, providing a significant market for producers and processors like Tyson Foods, thereby bolstering agricultural economic activity. Secondly, the chicken procured is intended for 'USG FOOD DONATIONS,' which directly addresses the USDA's role in combating food insecurity by providing essential nutritional resources to vulnerable populations, whether domestically or internationally. This action helps ensure access to protein-rich foods, contributing to public health and well-being. The procurement process itself, utilizing full and open competition, also reflects the USDA's commitment to efficient and responsible use of taxpayer funds while fostering a fair marketplace for agricultural goods.

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: 123J1426B0091

Offers Received: 7

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: $11,496,240

Exercised Options: $11,496,240

Current Obligation: $11,496,240

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline