USDA awards $3.6M for 500lb cheese barrels to Bongards Creameries under full and open competition

Contract Overview

Contract Amount: $3,644,313 ($3.6M)

Contractor: Bongards Creameries

Awarding Agency: Department of Agriculture

Start Date: 2026-02-18

End Date: 2026-04-30

Contract Duration: 71 days

Daily Burn Rate: $51.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011191/4400002536/4100033796/CHEESE NAT AMER FBD BARREL-500 LB(40800)

Place of Performance

Location: PERHAM, OTTER TAIL County, MINNESOTA, 56573

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $3.6 million to BONGARDS CREAMERIES for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011191/4400002536/4100033796/CHEESE NAT AMER FBD BARREL-500 LB(40800) Key points: 1. Contract awarded to Bongards Creameries for cheese commodities. 2. Full and open competition was utilized for this award. 3. Potential risk associated with fixed price with economic price adjustment. 4. Spending falls within the Agricultural Marketing Service sector.

Value Assessment

Rating: good

The contract price of $3.64M for cheese barrels appears reasonable given the quantity and fixed price with economic adjustment. Benchmarking against similar commodity contracts would provide a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a competitive bidding process. This method generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The use of full and open competition is positive for taxpayers, as it aims to secure the best value through market forces.

Public Impact

Ensures availability of essential food commodities for USG food donation programs. Supports domestic dairy producers and the agricultural sector. Price fluctuations may impact the final cost to taxpayers due to economic price adjustment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns.
Reliance on a single supplier for a specific product type.

Positive Signals

Full and open competition ensures broad market participation.
Clear delivery dates provide logistical certainty.

Sector Analysis

This contract falls under the agricultural commodities sector, specifically for food donations managed by the Department of Agriculture. Spending benchmarks for similar commodity procurements would be relevant for comparison.

Small Business Impact

While the contract was awarded through full and open competition, there is no specific indication of small business participation or set-asides in the provided data. Further analysis would be needed to assess small business impact.

Oversight & Accountability

The contract is managed by the Department of Agriculture's Agricultural Marketing Service. Oversight would involve monitoring delivery, quality, and adherence to the economic price adjustment terms.

Related Government Programs

Cheese Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Economic Price Adjustment (EPA) clause introduces cost uncertainty.
Potential for price volatility in dairy markets.
Dependence on specific commodity type for donation programs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.6 million to BONGARDS CREAMERIES. COMMODITIES FOR USG FOOD DONATIONS: 2000011191/4400002536/4100033796/CHEESE NAT AMER FBD BARREL-500 LB(40800)

Who is the contractor on this award?

The obligated recipient is BONGARDS CREAMERIES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.6 million.

What is the period of performance?

Start: 2026-02-18. End: 2026-04-30.

What is the potential impact of the economic price adjustment on the final cost of the cheese commodities?

The economic price adjustment (EPA) clause allows for changes in the contract price based on fluctuations in market prices for cheese. This means the final cost could be higher or lower than the initial $3.64M. The extent of the impact depends on market volatility and the specific formula used in the EPA. Without knowing the EPA's parameters, it's difficult to quantify the exact potential increase or decrease in taxpayer expenditure.

How does the use of full and open competition mitigate risks associated with this procurement?

Full and open competition mitigates risks by allowing multiple qualified vendors to bid, fostering a competitive environment that drives down prices and improves quality. This reduces the risk of overpaying or receiving substandard goods. It also increases transparency and accountability, as the selection process is more scrutinized. The government benefits from a wider range of potential solutions and is less reliant on a single source, enhancing supply chain resilience.

What are the key performance indicators (KPIs) for ensuring the effectiveness of this food donation commodity contract?

Key performance indicators for this contract would include timely delivery of cheese commodities meeting specified quality standards, accurate order fulfillment (quantity and type), and adherence to the contract's pricing terms, including the economic price adjustment. Effectiveness can also be measured by the successful distribution of these commodities through USG food donation programs and recipient satisfaction surveys, ensuring the intended impact on food security is achieved.

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: 123J1426B0118

Offers Received: 8

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

Evaluated Preference: NONE

Contractor Details

Address: 13200 COUNTY ROAD 51, NORWOOD YOUNG AMERICA, MN, 55368

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

Financial Breakdown

Contract Ceiling: $3,644,313

Exercised Options: $3,644,313

Current Obligation: $3,644,313

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1426D0008

IDV Type: IDC

Timeline