Leprino Foods awarded $1.7M for mozzarella cheese, highlighting agricultural supply chain needs

Contract Overview

Contract Amount: $1,696,102 ($1.7M)

Contractor: Leprino Foods Dairy Products CO

Awarding Agency: Department of Agriculture

Start Date: 2026-02-12

End Date: 2026-04-30

Contract Duration: 77 days

Daily Burn Rate: $22.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011190/4400002385/4100033769/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 $1.7 million to LEPRINO FOODS DAIRY PRODUCTS CO for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011190/4400002385/4100033769/CHEESE MOZ LM PT SKM UNFZ PROC PK(41125) Key points: 1. Contract value appears reasonable for the specified quantity and type of commodity. 2. Full and open competition suggests a healthy market for dairy product suppliers. 3. Fixed-price contract with economic price adjustment mitigates some supplier risk. 4. Delivery order structure allows for flexible fulfillment within a defined timeframe. 5. Focus on processed cheese indicates a specific nutritional or logistical requirement. 6. Contract duration is relatively short, suggesting ongoing or recurring needs.

Value Assessment

Rating: good

The contract value of approximately $1.7 million for 200,000 units of processed mozzarella cheese seems aligned with market rates for bulk food commodities. While specific per-unit cost comparisons are difficult without detailed product specifications and market data, the fixed-price structure with economic price adjustment offers a degree of cost certainty. The Agricultural Marketing Service's role suggests a focus on supporting domestic agriculture and ensuring food availability, making the value proposition tied to both economic and programmatic goals.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. This approach generally fosters a competitive environment, encouraging suppliers to offer their best pricing and terms. The presence of 6 bids suggests a robust interest in this government contract, which is a positive sign for price discovery and efficient use of taxpayer funds.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, potentially saving taxpayer money compared to sole-source or limited competition awards.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, potentially domestic food banks or international aid recipients. Services delivered include the provision of processed, low-moisture, part-skim, un-frozen mozzarella cheese. Geographic impact is primarily domestic, with the cheese likely distributed from New Mexico. Workforce implications are indirect, supporting jobs within the dairy processing and logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility due to economic price adjustment clause, though capped.
Dependence on a single supplier (Leprino Foods) for this specific delivery order.
Logistical challenges in ensuring timely delivery of perishable goods.

Positive Signals

Award to a known, established dairy producer (Leprino Foods).
Use of full and open competition promotes market fairness.
Fixed-price element provides a baseline cost control.

Sector Analysis

This contract falls within the broader food manufacturing and agricultural commodities sector. The U.S. government is a significant purchaser of food products for various programs, including domestic nutrition assistance and international food aid. The market for processed cheese is competitive, with major players like Leprino Foods dominating a substantial share. This contract represents a small but important segment of government procurement within the dairy industry.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. Leprino Foods is a large corporation. There is no explicit information provided regarding subcontracting plans with small businesses, but given the nature of the product, it is unlikely to involve significant small business subcontracting beyond standard supply chain relationships.

Oversight & Accountability

Oversight is provided by the Department of Agriculture's Agricultural Marketing Service. The contract includes standard terms and conditions for federal procurement, and delivery orders are subject to review. Accountability measures are inherent in the fixed-price structure and delivery schedule. Transparency is facilitated by the public nature of federal contract awards.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Programs
National School Lunch Program (potential indirect beneficiary)
Food Assistance Programs

Risk Flags

Potential for price increases due to economic price adjustment.
Dependence on a single supplier for this specific order.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $1.7 million to LEPRINO FOODS DAIRY PRODUCTS CO. COMMODITIES FOR USG FOOD DONATIONS: 2000011190/4400002385/4100033769/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 $1.7 million.

What is the period of performance?

Start: 2026-02-12. End: 2026-04-30.

What is the historical spending pattern for similar cheese procurement contracts by the USDA?

Analyzing historical spending for similar cheese procurement contracts by the USDA reveals a consistent pattern of significant investment in dairy products to support various food assistance and donation programs. Over the past five years, the USDA has awarded hundreds of millions of dollars in contracts for cheese, with quantities and types varying based on program needs. For instance, contracts for processed cheese, similar to this award, are often issued to meet specific nutritional requirements or shelf-life demands for distribution. The average price per pound for processed cheese procured by the USDA has fluctuated, influenced by market conditions, but generally remains within a predictable range. This specific contract's value appears to be in line with the scale of previous awards for similar quantities, suggesting stable pricing dynamics within this segment of the dairy market.

How does Leprino Foods' track record influence the risk assessment of this contract?

Leprino Foods is a major global producer of mozzarella and dairy ingredients, with a long-standing reputation and extensive experience in supplying large volumes of cheese. Their established infrastructure, supply chain management capabilities, and proven track record in fulfilling government contracts significantly mitigate performance risks associated with this award. As a dominant player in the cheese market, Leprino Foods possesses the capacity to meet the specified quantity and quality requirements within the given timeframe. Their financial stability and operational expertise reduce concerns about delivery disruptions or product quality issues. Therefore, Leprino Foods' strong track record positions them as a low-risk supplier for this commodity procurement.

What are the potential implications of the 'economic price adjustment' clause on the final cost?

The 'economic price adjustment' (EPA) clause in this contract allows for modifications to the fixed price based on fluctuations in specific economic indicators, typically related to raw material costs (like milk prices) or labor. While the base price is fixed, the EPA clause introduces a degree of uncertainty regarding the final cost to the government. However, these clauses are usually structured with caps or specific indices to limit extreme price swings. For this contract, the EPA is likely tied to dairy market indices. If milk prices or processing costs rise significantly during the contract period, the price paid to Leprino Foods could increase, up to a predetermined limit. Conversely, if costs decrease, the price might be adjusted downwards. The primary implication is that the final expenditure could deviate from the initial $1.7 million, but the risk is generally managed to prevent excessive overruns.

What is the strategic importance of this cheese procurement for USDA's food donation programs?

This cheese procurement is strategically important for the USDA's food donation programs as it provides a key, versatile, and nutrient-dense commodity. Mozzarella cheese is a popular and widely accepted food item that can be distributed through various channels, including food banks, school meal programs, and disaster relief efforts. Its protein and calcium content make it a valuable addition to food packages, contributing to nutritional security for vulnerable populations. By procuring large quantities, the USDA can ensure a stable supply of this essential item, supporting its mission to alleviate hunger and improve dietary intake. Furthermore, these procurements often support domestic agriculture by providing a consistent market for dairy producers, aligning economic and social objectives.

How does the 'delivery order' structure differ from a traditional fixed-quantity contract for this commodity?

A 'delivery order' (DO) structure, as used in this contract, differs from a traditional fixed-quantity contract by providing flexibility in the timing and quantity of deliveries within an established timeframe and ceiling price. Instead of specifying exact delivery dates and amounts upfront for the entire contract period, the government issues individual orders for specific quantities to be delivered by certain dates. This allows the USDA to adjust procurement based on real-time needs, inventory levels, and program demands. For a commodity like cheese, which has a shelf life and can be subject to market fluctuations, this flexibility is advantageous. It prevents the government from being overstocked or understocked and allows for more efficient inventory management, while Leprino Foods is obligated to fulfill orders within the contract's overall parameters and end date.

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: 123J1425B0282

Offers Received: 6

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: $1,696,102

Exercised Options: $1,696,102

Current Obligation: $1,696,102

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0025

IDV Type: IDC

Timeline