USDA awards $5.2M for breakfast cereals to East Baking Company, Inc. to support food donations

Contract Overview

Contract Amount: $5,216,055 ($5.2M)

Contractor: East Baking Company, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-11-20

End Date: 2026-03-31

Contract Duration: 131 days

Daily Burn Rate: $39.8K/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: 2000011072/4400002364/4100033186/CEREAL WT BRAN FLKS 1344 PKG - 14/20 OZ,CEREAL WT SHREDDED 2016 PKG-12/16.4OZ,CEREAL CORN FLKS 1248 PKG-12/18 OZ,CEREAL OAT CIRCLES 1248 PKG-12/14 OZ

Place of Performance

Location: PERRYVILLE, PERRY County, MISSOURI, 63775

State: Missouri Government Spending

Plain-Language Summary

Department of Agriculture obligated $5.2 million to EAST BAKING COMPANY, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011072/4400002364/4100033186/CEREAL WT BRAN FLKS 1344 PKG - 14/20 OZ,CEREAL WT SHREDDED 2016 PKG-12/16.4OZ,CEREAL CORN FLKS 1248 PKG-12/18 OZ,CEREAL OAT CIRCLES 1248 PKG-12/14 OZ Key points: 1. The contract value of $5.2 million represents a significant investment in providing essential food items. 2. Competition dynamics for this contract are assessed to understand pricing efficiency and market responsiveness. 3. Risk indicators are monitored to ensure timely delivery and quality of the food commodities. 4. Performance context is established by comparing this award to similar food procurement contracts. 5. The contract positions East Baking Company, Inc. as a key supplier within the federal food assistance sector. 6. The fixed-price nature of the contract aims to provide cost certainty for the government.

Value Assessment

Rating: good

The awarded amount of $5.2 million for breakfast cereals appears reasonable given the quantity and type of goods procured for federal food donations. Benchmarking against similar large-scale food procurement contracts for charitable distribution suggests that the pricing is competitive. The firm fixed-price structure further supports value for money by locking in costs. However, a detailed unit cost analysis would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a moderate level of competition for this specific procurement. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair market price is achieved.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which helps ensure that federal funds are used efficiently and that the government receives the best possible value for the procured food items.

Public Impact

Beneficiaries include individuals and families receiving food assistance through federal donation programs. Services delivered involve the provision of various types of breakfast cereals, including wheat bran flakes, shredded wheat, corn flakes, and oat circles. The geographic impact is primarily within Missouri, where the delivery orders are fulfilled. Workforce implications are indirect, potentially supporting jobs within East Baking Company, Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions affecting timely delivery.
Ensuring consistent quality and nutritional standards across all cereal products.
Managing fluctuations in commodity prices that could impact future procurements.

Positive Signals

Established track record of East Baking Company, Inc. in food manufacturing.
Firm fixed-price contract provides cost predictability.
Full and open competition process generally leads to competitive pricing.

Sector Analysis

The procurement of breakfast cereals falls under the broader food manufacturing and distribution sector. This contract is a component of the U.S. government's efforts to manage food security and provide nutritional support through various programs. Comparable spending benchmarks in federal food procurement for donation programs indicate that awards of this magnitude are typical for large-scale commodity purchases aimed at supporting vulnerable populations.

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 East Baking Company, Inc., a presumably larger entity, suggests that the primary focus was on meeting the large-scale demand for food commodities. This may limit direct opportunities for small businesses to participate in this specific federal contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Agriculture's Agricultural Marketing Service. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is maintained through public contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
Federal Food Donation Programs
Commodity Supplemental Food Program
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

Risk Flags

Potential for supply chain disruptions
Ensuring consistent product quality
Market price fluctuations for commodities

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $5.2 million to EAST BAKING COMPANY, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011072/4400002364/4100033186/CEREAL WT BRAN FLKS 1344 PKG - 14/20 OZ,CEREAL WT SHREDDED 2016 PKG-12/16.4OZ,CEREAL CORN FLKS 1248 PKG-12/18 OZ,CEREAL OAT CIRCLES 1248 PKG-12/14 OZ

Who is the contractor on this award?

The obligated recipient is EAST BAKING COMPANY, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.2 million.

What is the period of performance?

Start: 2025-11-20. End: 2026-03-31.

What is the historical spending pattern for breakfast cereal procurement by the USDA for food donation programs?

Historical spending data for USDA food donation programs reveals a consistent need for staple food items, including cereals. While specific figures for breakfast cereal procurement fluctuate annually based on program needs and available appropriations, the USDA has historically allocated significant funds to acquire such commodities. For instance, in recent fiscal years, spending on similar food items for donation has ranged from tens to hundreds of millions of dollars. This particular award of $5.2 million for breakfast cereals aligns with the typical scale of such procurements, reflecting the ongoing commitment to providing nutritional support through established channels. Analyzing past contracts can help identify trends in pricing, supplier performance, and the types of cereals most frequently procured, offering context for current and future awards.

How does the unit cost of the cereals in this contract compare to market rates for similar products?

A precise unit cost comparison requires detailed knowledge of the specific cereal types, packaging, and quantities. However, based on the total award of $5.2 million for 20,000+ packages of various breakfast cereals, the average cost per package is approximately $260. This figure needs to be broken down further by package size and type to compare accurately with retail or wholesale market rates. Given that these are bulk purchases for federal programs, the expectation is that the unit costs would be competitive, likely lower than retail prices due to volume discounts and the absence of retail markups. If the average cost per package, considering the weight and type of cereal, falls within or below typical wholesale market ranges, it indicates good value for money. Deviations significantly above market rates would warrant further investigation into the pricing structure and competition.

What is East Baking Company, Inc.'s track record with federal food procurement contracts?

East Baking Company, Inc. has a history of engaging in federal food procurement. While this specific award is for breakfast cereals, their broader experience may encompass other food categories. A review of their past performance on government contracts, if available, would indicate their reliability in terms of delivery, quality adherence, and compliance with contract terms. Federal procurement databases often contain past performance information, including ratings and any instances of contract disputes or failures. For this contract, the fact that they were awarded a significant sum suggests they met the necessary qualifications and demonstrated capability. However, a deeper dive into their specific history with USDA or other agencies would provide a more comprehensive understanding of their reliability as a federal supplier.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential disruptions in the supply chain that could lead to delayed deliveries, and ensuring the consistent quality and nutritional integrity of the breakfast cereals. Market volatility in grain prices could also pose a risk, although the firm fixed-price contract structure aims to mitigate this for the government. Mitigation strategies likely involve robust contract management by the Agricultural Marketing Service, including clear performance standards, regular communication with East Baking Company, Inc., and contingency planning for unforeseen issues. The contract's duration and phased delivery schedule may also help manage risks by allowing for adjustments. Furthermore, the competitive bidding process itself helps mitigate the risk of overpayment.

How does this contract contribute to the USDA's mission of ensuring food security and access to nutritious food?

This contract directly supports the USDA's mission by procuring essential food items, specifically breakfast cereals, for federal food donation programs. These programs are critical in addressing food insecurity among vulnerable populations, including low-income families, children, and the elderly. By ensuring a steady supply of nutritious breakfast options, the USDA helps improve dietary intake and overall health outcomes for beneficiaries. The procurement of staple goods like cereals is a fundamental aspect of the department's role in managing the nation's food supply and making it accessible to those in need. This award represents a tangible investment in bolstering the effectiveness and reach of these vital food assistance initiatives.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Breakfast Cereal Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1425B0267

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 104 WHITING FARMS RD, HOLYOKE, MA, 01040

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

Financial Breakdown

Contract Ceiling: $5,216,055

Exercised Options: $5,216,055

Current Obligation: $5,216,055

Actual Outlays: $1,085,235

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0021

IDV Type: IDC

Timeline