Leprino Foods awarded $3.7M for cheese, highlighting fixed-price adjustments and full competition

Contract Overview

Contract Amount: $3,666,960 ($3.7M)

Contractor: Leprino Foods Dairy Products CO

Awarding Agency: Department of Agriculture

Start Date: 2026-01-20

End Date: 2026-03-31

Contract Duration: 70 days

Daily Burn Rate: $52.4K/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: 2000011167/4400002388/4100033605/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 $3.7 million to LEPRINO FOODS DAIRY PRODUCTS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011167/4400002388/4100033605/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125) Key points: 1. Contract utilizes economic price adjustments, potentially increasing final cost based on market fluctuations. 2. Full and open competition suggests a competitive bidding process, likely leading to better pricing. 3. The contract duration is relatively short, indicating a need for immediate or short-term supply. 4. Awarded by the Department of Agriculture's Agricultural Marketing Service, focusing on food donations. 5. The specific product is processed, low-moisture, part-skim, un-frozen mozzarella cheese. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery contract.

Value Assessment

Rating: good

The awarded amount of $3.67 million for approximately 70 days of supply appears reasonable given the product type and market. Benchmarking against similar commodity procurements for food donations would provide a clearer picture of value. The fixed-price with economic price adjustment structure introduces some variability, but the base price is set through competition. Without specific volume data, a precise per-unit cost comparison is difficult, but the overall award seems aligned with typical government food procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a healthy level of interest and competition for this specific commodity. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive pricing for the goods procured.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for essential food commodities used in donation programs.

Public Impact

Beneficiaries of USG food donation programs will receive processed mozzarella cheese. The services delivered include the supply of a specific dairy product for federal food assistance. The geographic impact is likely national, as donated food is distributed across the United States. This contract supports the agricultural sector by procuring products from domestic cheese manufacturers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs due to economic price adjustment clause.
Short contract duration may lead to frequent re-competition and potential supply chain disruptions if not managed well.
Reliance on a single commodity type for donation programs could be a risk if market prices fluctuate significantly.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Multiple bids received (5), suggesting a competitive market for this product.
Clear product specification (processed, low-moisture, part-skim, un-frozen mozzarella) ensures quality.

Sector Analysis

The dairy product manufacturing sector is a significant part of the U.S. agricultural economy. This contract falls within the broader food manufacturing and agricultural commodities market. Government procurement of food products for donation programs represents a consistent, albeit specific, segment of this market. Comparable spending benchmarks would involve analyzing other large-scale commodity procurements for food banks or disaster relief efforts.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem for this specific award is likely minimal unless Leprino Foods utilizes small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's Agricultural Marketing Service, potentially involving contract officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is facilitated by the public nature of federal contract awards, allowing for review of basic award details.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food and Nutrition Service Programs

Risk Flags

Economic Price Adjustment Clause
Short Contract Duration
Single Commodity Focus

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.7 million to LEPRINO FOODS DAIRY PRODUCTS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000011167/4400002388/4100033605/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 $3.7 million.

What is the period of performance?

Start: 2026-01-20. End: 2026-03-31.

What is the historical spending pattern for similar cheese procurements by the Department of Agriculture?

Analyzing historical spending for similar cheese procurements by the USDA would involve reviewing past contract awards for mozzarella or other cheese types used in donation programs. This would include examining award amounts, quantities, contract types (fixed-price, cost-plus), and the duration of previous contracts. Understanding trends in pricing, competition levels, and the number of bidders over time can reveal whether current spending is consistent with historical norms or if there are significant deviations. For instance, a review might show if prices have increased or decreased, if competition has become more or less intense, or if the volume procured has changed. This context is crucial for assessing whether the current $3.7 million award represents a fair market value and efficient use of taxpayer funds compared to past performance.

How does the economic price adjustment (EPA) clause typically impact the final cost of such contracts?

The economic price adjustment (EPA) clause in this contract allows for modifications to the price based on fluctuations in specified economic factors, such as the cost of raw materials (e.g., milk prices) or labor. For taxpayers, this introduces an element of uncertainty regarding the final expenditure. While it can protect the contractor from unforeseen cost increases and ensure supply continuity, it also means the final cost could exceed the initial $3.67 million award. The extent of this impact depends on the specific index or formula used in the EPA and the volatility of the underlying economic indicators during the contract period (January-March 2026). A well-defined EPA with reasonable limits can mitigate excessive price hikes, but it inherently shifts some price risk from the contractor to the government.

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

Leprino Foods Company is a major dairy product manufacturer, and its track record with federal food procurement contracts, particularly with agencies like the Department of Agriculture, is likely extensive. As a large-scale producer, they are a common supplier for government programs requiring dairy commodities. A detailed review would involve examining past awards to Leprino Foods for similar products (cheese, milk powder, etc.) under various USDA programs, such as food donations, school lunch programs, or military rations. This analysis would assess their performance history, including on-time delivery, product quality compliance, and any past disputes or contract modifications. A history of successful contract performance suggests reliability, while any past issues might indicate potential risks for this current award.

What are the potential risks associated with procuring only mozzarella cheese for food donations?

Procuring only mozzarella cheese for food donations carries several potential risks. Firstly, it limits dietary variety for recipients, potentially overlooking nutritional needs that could be met by other dairy products or food types. Secondly, it exposes the program to specific market risks associated with mozzarella production and pricing; if mozzarella prices surge due to factors like milk supply shortages or increased demand, the cost of this donation program could escalate significantly, impacting the overall volume of food that can be purchased within budget. Thirdly, it might not align with the diverse preferences or culinary uses of recipients in different regions. A broader procurement strategy encompassing various dairy products or a wider range of food commodities could mitigate these risks and enhance program effectiveness.

How does the short duration (70 days) of this delivery order impact overall program efficiency and cost?

The short duration of this delivery order (70 days, from late January to end of March 2026) suggests it's intended for immediate or short-term needs, possibly to fill a gap or meet a specific seasonal demand for food donations. While this allows for flexibility and frequent reassessment of needs, it also means the contract will expire quickly. This necessitates timely re-competition or extension, which can incur administrative costs and potential delays in securing subsequent supplies. For taxpayers, frequent, short-term procurements can sometimes be less cost-effective than longer-term contracts that might offer volume discounts or more stable pricing. However, it also provides an opportunity to adjust specifications or seek better pricing in subsequent awards if market conditions change or performance issues arise.

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: $3,666,960

Exercised Options: $3,666,960

Current Obligation: $3,666,960

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0031

IDV Type: IDC

Timeline