USDA's $21,375 Egg Contract with Sonstegard Foods Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $21,375 ($21.4K)

Contractor: Sonstegard Foods CO

Awarding Agency: Department of Agriculture

Start Date: 2026-04-09

End Date: 2026-05-31

Contract Duration: 52 days

Daily Burn Rate: $411/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011223/4100033971/EGGS 15 DOZEN

Place of Performance

Location: HARRIS, OSCEOLA County, IOWA, 51345

State: Iowa Government Spending

Plain-Language Summary

Department of Agriculture obligated $21,375 to SONSTEGARD FOODS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011223/4100033971/EGGS 15 DOZEN Key points: 1. The contract for 15 dozen eggs highlights a small purchase amount, potentially masking broader spending trends. 2. Competition method 'Full and Open Competition After Exclusion of Sources' warrants further investigation into the exclusion rationale. 3. The short duration and fixed-price nature suggest limited risk, but value for money needs verification. 4. Spending in the 'All Other Miscellaneous Food Manufacturing' sector is difficult to benchmark without more granular data.

Value Assessment

Rating: questionable

The contract value of $21,375 for 15 dozen eggs appears exceptionally high on a per-unit basis. Without knowing the specific type and quality of eggs, it's difficult to provide a precise benchmark, but this price warrants further investigation into potential overpayment or unusual circumstances.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' While this indicates an initial intent for broad competition, the 'exclusion of sources' clause requires clarification to ensure no viable competitors were unfairly barred, which could impact price discovery.

Taxpayer Impact: The direct taxpayer impact of this specific contract is minimal due to its small value. However, if the pricing is indeed inflated, it represents inefficient use of public funds that could be amplified across larger contracts.

Public Impact

Ensures availability of essential food commodities for government programs. Supports the agricultural sector and food manufacturers. Transparency in government procurement is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Unclear justification for excluding sources in a full and open competition.
Potentially inflated per-unit cost for eggs.
Lack of detailed product specifications makes value assessment difficult.

Positive Signals

Contract awarded under a competitive process.
Fixed-price contract limits cost overrun risk.
Short contract duration minimizes long-term financial exposure.

Sector Analysis

This contract falls under 'All Other Miscellaneous Food Manufacturing,' a broad category making sector-specific spending benchmarks challenging. The Agricultural Marketing Service's role suggests a focus on commodity procurement for various government food assistance programs.

Small Business Impact

The data does not indicate if Sonstegard Foods Co. is a small business. Further analysis would be needed to determine the extent of small business participation in this procurement and its impact on competition.

Oversight & Accountability

The 'Exclusion of Sources' clause within a 'Full and Open Competition' requires careful oversight to ensure fairness and prevent potential manipulation. The Agricultural Marketing Service should have clear documentation justifying any source exclusions.

Related Government Programs

All Other Miscellaneous Food Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Potential overpayment due to high per-unit cost.
Ambiguity in 'Exclusion of Sources' clause.
Lack of detailed product specifications.
Limited contract duration may not reflect long-term needs.
Difficulty in benchmarking due to broad sector classification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $21,375 to SONSTEGARD FOODS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000011223/4100033971/EGGS 15 DOZEN

Who is the contractor on this award?

The obligated recipient is SONSTEGARD FOODS CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21,375.

What is the period of performance?

Start: 2026-04-09. End: 2026-05-31.

What is the specific justification for excluding certain sources under this 'Full and Open Competition' award?

The justification for excluding sources under a 'Full and Open Competition After Exclusion of Sources' award is critical for ensuring fairness and preventing anti-competitive practices. Agencies must provide clear, documented reasons, such as a lack of capability, failure to meet requirements, or specific national security concerns, for any source exclusion. Without this, the integrity of the competitive process is undermined, and taxpayers may not be receiving the best value.

How does the per-unit cost of these eggs compare to market rates for similar government food donations?

The per-unit cost of these eggs appears significantly high, raising concerns about value for money. Without specific details on egg type, grade, and origin, a precise benchmark is difficult. However, typical government food donation programs aim for cost-effectiveness, and this contract's pricing warrants a thorough review against established commodity pricing indices and historical data for similar procurements.

What is the overall effectiveness of the Agricultural Marketing Service in procuring food commodities efficiently and at fair prices?

The effectiveness of the Agricultural Marketing Service (AMS) in procuring food commodities is generally considered robust, given its mission to support agricultural markets and ensure food availability. However, individual contract reviews, like this one for eggs, are essential for identifying potential inefficiencies or areas for improvement. Scrutiny of specific contract terms, competition methods, and pricing is vital to ensure AMS consistently achieves its objectives and maximizes taxpayer value.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0181

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sonstegard Foods Company

Address: 5005 S BUR OAK PL, SIOUX FALLS, SD, 57108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,375

Exercised Options: $21,375

Current Obligation: $21,375

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline