USDA awards $11.4M for grape juice, highlighting potential for efficient commodity procurement

Contract Overview

Contract Amount: $11,351,883 ($11.4M)

Contractor: Welch Foods Inc., a Cooperative

Awarding Agency: Department of Agriculture

Start Date: 2026-02-25

End Date: 2026-08-15

Contract Duration: 171 days

Daily Burn Rate: $66.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011174/4100033854/GRAPE CONCORD JUICE PLST BTL-8/64 FL OZ

Place of Performance

Location: NORTH EAST, ERIE County, PENNSYLVANIA, 16428

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $11.4 million to WELCH FOODS INC., A COOPERATIVE for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011174/4100033854/GRAPE CONCORD JUICE PLST BTL-8/64 FL OZ Key points: 1. The contract value of $11.4 million suggests a significant volume of grape juice is being procured. 2. The award to Welch Foods Inc., a cooperative, indicates a focus on established suppliers for commodity needs. 3. The contract duration of approximately 171 days points to a short-term, immediate need for the commodity. 4. The 'DEFINITIVE CONTRACT' award type implies a flexible agreement for goods or services over a period. 5. The fixed-price nature of the contract provides cost certainty for the government. 6. The procurement method, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggests a competitive process with specific justifications for source exclusion.

Value Assessment

Rating: good

The contract value of $11.4 million for grape juice appears reasonable given the quantity implied by the duration and the nature of government commodity purchases. Benchmarking against similar large-scale food commodity contracts would provide more precise value-for-money assessment. The fixed-price structure is a positive indicator for cost control. However, without specific unit cost data or comparison to commercial bulk pricing, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, specific sources were excluded, likely due to unique capabilities or prior relationships. The number of bidders is not explicitly stated, but the 'exclusion of sources' suggests a potentially narrower field than a purely full and open competition. This method can sometimes lead to less aggressive pricing if the excluded sources represent significant market players.

Taxpayer Impact: While the competition was not entirely unrestricted, the 'full and open' aspect suggests an effort to achieve fair pricing. The exclusion of sources warrants scrutiny to ensure it did not unduly limit competitive pressure and potentially increase costs for taxpayers.

Public Impact

This contract directly supports the U.S. government's food donation programs, ensuring essential nutritional commodities are available. Beneficiaries of these food donations likely include food banks, shelters, and other charitable organizations serving vulnerable populations. The procurement ensures the availability of a specific commodity (grape juice) for distribution, contributing to food security initiatives. The geographic impact is national, as the donated food is distributed across various regions within the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method requires further investigation to ensure it was fully justified and did not limit competitive pricing.
The short contract duration (approx. 171 days) might indicate a reactive procurement rather than strategic long-term planning, potentially missing volume discounts.
Lack of detailed performance metrics or quality assurance specifics in the provided data makes it difficult to assess the quality of the delivered product.

Positive Signals

The award to a known entity like Welch Foods Inc., a cooperative, suggests reliability and established supply chain capabilities.
The use of a 'FIRM FIXED PRICE' contract provides budget certainty and protects the government from cost overruns.
The contract supports critical government functions related to food security and donation programs.

Sector Analysis

The food and beverage manufacturing sector is a significant part of the U.S. economy. This contract falls under the broader category of agricultural commodity procurement, specifically focusing on processed fruit products. Government purchases of food commodities are substantial, often driven by domestic nutrition assistance programs and international food aid. Market dynamics in this sector are influenced by agricultural yields, processing costs, and large-scale distribution logistics. Comparable spending benchmarks would involve analyzing other large government contracts for similar processed food items.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large commodity purchase, it is unlikely to be directly awarded to small businesses unless they are part of a larger supply chain or cooperative. Subcontracting opportunities for small businesses may exist within Welch Foods Inc.'s operations, but this is not detailed in the contract information. The primary impact on the small business ecosystem would be indirect, through the overall demand generated in the agricultural and food processing sectors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's Agricultural Marketing Service (AMS), which is responsible for procurement and program administration. Accountability measures are embedded in the contract terms, including the fixed-price structure and delivery schedules. Transparency is facilitated through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

National School Lunch Program
Food Bank Assistance Programs
Commodity Supplemental Food Program
Food for Peace Program
WIC Program

Risk Flags

Competition Method Justification
Unit Price Benchmarking
Supplier Performance History

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $11.4 million to WELCH FOODS INC., A COOPERATIVE. COMMODITIES FOR USG FOOD DONATIONS: 2000011174/4100033854/GRAPE CONCORD JUICE PLST BTL-8/64 FL OZ

Who is the contractor on this award?

The obligated recipient is WELCH FOODS INC., A COOPERATIVE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.4 million.

What is the period of performance?

Start: 2026-02-25. End: 2026-08-15.

What is the historical spending pattern for grape juice or similar fruit products by the Department of Agriculture?

Analyzing historical spending data for grape juice and comparable fruit products by the USDA is crucial for understanding long-term trends and identifying potential anomalies. While specific data for this contract is limited, general trends in government food procurement show significant investment in commodity programs. For instance, the USDA's Food Purchase Programs, which include donations to various domestic and international initiatives, represent billions of dollars annually. Spending on specific items like fruit juices can fluctuate based on program needs, agricultural output, and budgetary allocations. A detailed analysis would involve querying contract databases for similar PSC codes (e.g., 8910 for Food Cooking Oils and Fats, 8920 for Fruits and Vegetables, 8940 for Soups and Bouillons, 8950 for Canned/Processed Fruits and Vegetables) over several fiscal years to identify average quantities, prices, and key suppliers. This historical context helps in assessing whether the current $11.4 million award is within expected parameters or represents a significant deviation.

How does the unit price of this grape juice contract compare to commercial bulk purchasing rates?

Determining the precise unit price requires dividing the total contract value ($11,351,882.50) by the quantity of grape juice procured. Since the quantity is not explicitly provided, a direct unit price comparison is not feasible with the given data. However, government contracts for bulk commodities often aim for prices competitive with or below commercial bulk rates, leveraging economies of scale and long-term agreements. Factors influencing this comparison include the specific type of grape juice (e.g., concentrate vs. ready-to-drink), packaging (e.g., plastic bottles, aseptic cartons), and delivery terms. If the contract specifies 64 fl oz plastic bottles, comparing the price per bottle or per fluid ounce to wholesale club pricing or large-scale food service distributor pricing would be relevant. Without the exact quantity, it's difficult to definitively assess value, but the fixed-price nature suggests an attempt to lock in a known cost.

What are the specific justifications for excluding other sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award?

The contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that while the competition was broadly advertised, certain potential sources were deliberately excluded. The specific justifications for such exclusions are critical for assessing the fairness and competitiveness of the procurement process. Common reasons for excluding sources include: 1) Unique capabilities or proprietary technology possessed by a specific vendor; 2) Prior performance or established relationships that are deemed essential for program continuity or specialized requirements; 3) Situations where only a limited number of responsible sources exist due to stringent qualifications or certifications; or 4) National security concerns. Without access to the detailed justification documentation associated with this specific contract award, it is impossible to ascertain the exact reasons. However, such exclusions can potentially limit competition and may warrant scrutiny to ensure they were necessary and did not unduly restrict market access for other qualified vendors.

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

Welch Foods Inc., operating as a cooperative, has a long-standing presence in the food industry, particularly known for its grape-based products. Its track record with government contracts, especially for food commodities, is likely extensive given its market position. Government agencies, including the Department of Agriculture (USDA), frequently procure food items for various programs, such as domestic nutrition assistance and international food aid. A review of federal procurement databases (like FPDS) would reveal the extent and nature of Welch Foods Inc.'s past awards. Key aspects to examine would include the types of commodities supplied, contract values, performance history (on-time delivery, quality compliance), and any instances of contract disputes or terminations. A history of successful, compliant contract performance would indicate reliability and capability, while any negative performance indicators would raise concerns about future contract execution.

What are the potential risks associated with a short-duration contract for a commodity like grape juice?

Short-duration contracts, like this approximately 171-day award, for essential commodities can present several risks. Firstly, they may lead to less favorable pricing compared to longer-term agreements, as suppliers might not offer the same volume discounts or price stability for a limited commitment. This can result in a higher per-unit cost for the government. Secondly, short durations can create a cycle of frequent re-procurement, increasing administrative burden and the potential for supply chain disruptions if new contracts are not awarded seamlessly. Thirdly, it might limit the supplier's incentive to invest in process improvements or specialized production runs that would be more cost-effective over a longer period. For a commodity like grape juice, which relies on seasonal agricultural inputs, a short contract might also pose risks if market prices fluctuate significantly during the contract period, potentially impacting the supplier's ability to maintain the fixed price without compromising quality or sourcing.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0145

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 BAKER AVE STE 101, CONCORD, MA, 01742

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

Financial Breakdown

Contract Ceiling: $11,351,883

Exercised Options: $11,351,883

Current Obligation: $11,351,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline