Leprino Foods awarded $7.2M contract for processed cheese, highlighting agricultural commodity procurement for federal food donations

Contract Overview

Contract Amount: $7,240,735 ($7.2M)

Contractor: Leprino Foods Dairy Products CO

Awarding Agency: Department of Agriculture

Start Date: 2025-12-19

End Date: 2026-02-28

Contract Duration: 71 days

Daily Burn Rate: $102.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011111/4400002388/4100033485/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125)

Place of Performance

Location: ROSWELL, CHAVES County, NEW MEXICO, 88203

State: New Mexico Government Spending

Plain-Language Summary

Department of Agriculture obligated $7.2 million to LEPRINO FOODS DAIRY PRODUCTS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011111/4400002388/4100033485/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125) Key points: 1. Contract value of $7.2M for processed cheese indicates significant federal investment in food aid programs. 2. Full and open competition suggests a potentially competitive bidding process, aiming for favorable pricing. 3. The fixed-price contract with economic price adjustment introduces some risk related to market fluctuations. 4. This award supports the Agricultural Marketing Service's role in procuring essential food items. 5. The contract duration of 71 days suggests a focused procurement for immediate needs. 6. The specific commodity, processed mozzarella, points to targeted nutritional requirements for donation programs.

Value Assessment

Rating: good

The contract value of $7.2M for 20,000 units of processed cheese appears reasonable given the commodity and federal procurement scale. Benchmarking against similar large-scale food commodity contracts for donation programs would provide further context, but the fixed-price nature, adjusted for economic factors, suggests an attempt to balance cost control with market realities. The per-unit cost, while not explicitly provided, would be a key metric to assess value against market rates for bulk cheese procurement.

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. This approach generally fosters a competitive environment, which can lead to better pricing and terms for the government. The number of bidders (5) suggests a moderate level of interest, sufficient to establish a competitive baseline without being overly fragmented.

Taxpayer Impact: A full and open competition for essential food commodities like cheese is beneficial for taxpayers as it increases the likelihood of securing the best possible price and quality, maximizing the impact of federal food aid funds.

Public Impact

Beneficiaries include individuals and families receiving federal food donations, likely through various domestic and international aid programs. The service delivered is the provision of processed mozzarella cheese, a key component for nutritional support. The geographic impact is primarily domestic, supporting U.S. agricultural producers and potentially reaching underserved communities. Workforce implications are positive for the agricultural sector, supporting jobs in dairy farming and cheese manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause introduces potential for cost overruns if market prices for dairy inputs increase significantly.
Short contract duration (71 days) may limit opportunities for long-term supplier relationships or economies of scale in production.
Reliance on a single commodity type could be a vulnerability if supply chain disruptions occur for that specific product.

Positive Signals

Award to a known entity (Leprino Foods) suggests a reliable supplier with established production capabilities.
Full and open competition indicates a commitment to fair market practices and potentially competitive pricing.
Procurement for food donations aligns with important social welfare and humanitarian objectives.

Sector Analysis

This contract falls within the broader food manufacturing and agricultural commodities sector. The U.S. dairy industry is a significant part of the agricultural economy, with substantial federal support often directed towards commodity stabilization and food assistance programs. Comparable spending benchmarks would involve analyzing other large federal contracts for dairy products or processed foods procured for similar purposes, such as school lunch programs or disaster relief.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. Leprino Foods is a large dairy cooperative. There is no explicit mention of subcontracting requirements for small businesses within the provided data, suggesting that the primary focus is on the direct supply of the commodity by the prime contractor.

Oversight & Accountability

Oversight for this contract would likely be managed by the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures would include adherence to delivery schedules, product specifications, and pricing terms. Transparency is facilitated by the federal contract award process, with public availability of contract details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

National School Lunch Program
Food Bank Assistance Programs
Disaster Relief Food Supplies
Commodity Supplemental Food Program

Risk Flags

Economic Price Adjustment Clause
Short Contract Duration
Commodity Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $7.2 million to LEPRINO FOODS DAIRY PRODUCTS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000011111/4400002388/4100033485/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125)

Who is the contractor on this award?

The obligated recipient is LEPRINO FOODS DAIRY PRODUCTS CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.2 million.

What is the period of performance?

Start: 2025-12-19. End: 2026-02-28.

What is Leprino Foods' track record with federal food procurement contracts?

Leprino Foods is a major dairy product manufacturer and has a history of supplying commodities to the federal government, particularly for food assistance programs. While specific details of past federal contracts are not provided here, their scale of operation suggests they are a significant player in this market. Federal procurement databases would likely contain records of their previous awards, which could be analyzed for performance history, pricing trends, and compliance. A review of these records would be necessary to fully assess their track record, including any past issues or commendations related to delivery, quality, or contract management.

How does the $7.2M contract value compare to similar federal food donation procurements?

The $7.2M value for 20,000 units of processed cheese is substantial and indicates a significant procurement effort. To benchmark this value, one would need to compare it against historical awards for similar commodities (e.g., other dairy products, protein sources, grains) procured by agencies like the USDA for food donation or assistance programs. Factors such as the specific type of cheese, packaging, delivery terms, and prevailing market prices at the time of award are crucial for a fair comparison. Without access to a comprehensive database of comparable contracts, it's difficult to definitively state if this represents a particularly high or low value, but it signifies a considerable investment in food aid.

What are the primary risks associated with this fixed-price contract with economic price adjustment?

The primary risk in a fixed-price contract with economic price adjustment (FPEPA) lies in the potential for increased costs due to fluctuations in the market prices of raw materials or labor. For this cheese contract, significant increases in the cost of milk, energy, or transportation could lead to higher final costs for the government than initially anticipated under a firm fixed price. While the adjustment mechanism aims to account for these changes, it introduces uncertainty in the final expenditure. Conversely, if market prices decrease, the government might not fully benefit from those reductions depending on the specific adjustment formula. Managing this risk involves careful monitoring of market indices and ensuring the adjustment clause is clearly defined and fair.

How effective is the 'full and open competition' strategy in ensuring value for taxpayers in this specific procurement?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for taxpayers in federal procurements. By allowing all responsible sources to bid, it maximizes the pool of potential suppliers, thereby increasing the likelihood of receiving competitive offers. For this $7.2M cheese contract, this approach suggests that the government sought to obtain the best possible price and quality by engaging a wide range of potential suppliers. The fact that five bids were received indicates a reasonable level of competition. The ultimate value realized depends on the specific terms negotiated and the quality of the product delivered, but the competitive process itself is a strong indicator of a taxpayer-favorable approach.

What are the implications of the short contract duration (71 days) for program effectiveness and cost?

A short contract duration of 71 days for a commodity procurement like cheese suggests a need for rapid fulfillment, possibly tied to specific distribution timelines or immediate program requirements. This can be effective for addressing urgent needs but may limit opportunities for the contractor to achieve economies of scale in production or logistics, potentially leading to a higher per-unit cost compared to longer-term contracts. For the government, it necessitates a quicker procurement cycle. While it ensures timely delivery for immediate needs, it might not be the most cost-efficient approach for sustained, long-term supply requirements. It also means that the government will need to re-compete or extend the requirement relatively soon.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1425B0304

Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 1830 W 38TH AVE STE 600, DENVER, CO, 80211

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: $7,240,735

Exercised Options: $7,240,735

Current Obligation: $7,240,735

Actual Outlays: $104,329

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0031

IDV Type: IDC

Timeline