USDA awards $484K for cheese, with Bongards Creameries securing the contract under full and open competition

Contract Overview

Contract Amount: $483,944 ($483.9K)

Contractor: Bongards Creameries

Awarding Agency: Department of Agriculture

Start Date: 2026-02-20

End Date: 2026-04-30

Contract Duration: 69 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002544/4100033841/CHEESE BLND AMER SKMYEL REGSLC LVS-6/5LB

Place of Performance

Location: NORWOOD YOUNG AMERICA, CARVER County, MINNESOTA, 55368

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $483,943.68 to BONGARDS CREAMERIES for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002544/4100033841/CHEESE BLND AMER SKMYEL REGSLC LVS-6/5LB Key points: 1. Contract awarded to a single supplier, indicating potential for limited competition despite "full and open" designation. 2. Fixed-price contract with economic price adjustment introduces risk of cost overruns due to market fluctuations. 3. Short performance period (69 days) suggests a specific, immediate need for the commodity. 4. Geographic concentration in Minnesota may limit broader supplier engagement. 5. No indication of small business set-aside or subcontracting, potentially excluding smaller players. 6. The contract falls under the Cheese Manufacturing NAICS code, aligning with broader food commodity procurement.

Value Assessment

Rating: fair

The award amount of $483,943.68 for cheese appears reasonable for a government food donation program, though a direct comparison to similar contracts is difficult without more detailed specifications of the cheese product (e.g., type, quantity, quality standards). The fixed-price with economic price adjustment clause introduces a degree of uncertainty regarding the final cost. Benchmarking against market rates for bulk cheese purchases would provide a clearer picture of value for money, but this information is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under "full and open competition," suggesting that all responsible sources were permitted to submit offers. However, the data indicates only one award was made, which could imply that only one offer was received or deemed acceptable, or that the contract was structured in a way that favored a specific supplier. Further details on the number of proposals received and the evaluation process would clarify the extent of actual competition.

Taxpayer Impact: While full and open competition is generally favorable for taxpayers by encouraging competitive pricing, the outcome of a single award warrants scrutiny to ensure the government received the best possible value.

Public Impact

Beneficiaries include recipients of USG food donations, likely vulnerable populations. Services delivered involve the provision of American-style processed cheese. Geographic impact is primarily within Minnesota, where the supplier is located and likely distribution will occur. Workforce implications are minimal, primarily related to the manufacturing and logistics of cheese production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to higher costs than initially budgeted.
Lack of transparency on the number of bids received despite "full and open" competition.
Short performance duration might indicate a reactive procurement rather than strategic planning.

Positive Signals

Contract awarded under a standard government procurement process.
Clear identification of the commodity and the awarding agency.
Defined delivery period ensures timely fulfillment of the order.

Sector Analysis

The contract falls within the broader food manufacturing and distribution sector, specifically focusing on dairy products. The U.S. dairy industry is substantial, with cheese manufacturing being a significant sub-sector. Government procurement of food commodities, particularly for donation programs, represents a consistent but niche market. This contract, while relatively small in dollar value, contributes to the overall demand for processed cheese, supporting manufacturers like Bongards Creameries.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no information provided regarding subcontracting plans. The award to a single, presumably larger, entity suggests that opportunities for small businesses to participate in this specific procurement may have been limited, unless they were part of the supply chain for the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's Agricultural Marketing Service. Accountability measures are inherent in the fixed-price contract structure, with penalties for non-performance. Transparency is partially addressed through public contract databases, but detailed performance metrics and bid evaluations are not always publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Contracts
Dairy Product Manufacturing
Federal Food Assistance Programs

Risk Flags

Potential for limited competition despite 'full and open' solicitation.
Economic price adjustment clause introduces cost uncertainty.
Lack of detailed product specifications hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $483,943.68 to BONGARDS CREAMERIES. COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002544/4100033841/CHEESE BLND AMER SKMYEL REGSLC LVS-6/5LB

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 $483,943.68.

What is the period of performance?

Start: 2026-02-20. End: 2026-04-30.

What is the specific type and quality standard of the 'CHEESE BLND AMER SKMYEL REGSLC LVS-6/5LB' being procured?

The product description 'CHEESE BLND AMER SKMYEL REGSLC LVS-6/5LB' suggests a blend of American cheese, likely made from skimmed milk ('SKMYEL'), with regulations ('REGSLC') and possibly a specific form factor or packaging ('LVS-6/5LB'). However, without access to the detailed product specification sheet referenced in the contract, the precise quality standards (e.g., fat content, moisture level, specific ingredients, grading) remain unclear. This lack of specificity can make it challenging to benchmark the value effectively against other cheese purchases or to ensure it meets the exact nutritional or functional requirements for the intended food donation recipients.

How many offers were received for this contract, given it was awarded under 'full and open competition'?

The provided data indicates the contract was awarded under 'full and open competition,' which theoretically allows any responsible source to submit an offer. However, the data only shows one awardee, Bongards Creameries. It does not explicitly state the number of proposals received. It is possible that multiple offers were submitted, but Bongards Creameries was the only one deemed acceptable or the best value. Alternatively, only one offer may have been received, which would raise questions about the effectiveness of the 'full and open' solicitation process in attracting sufficient competition for this specific requirement.

What is the historical spending pattern for this specific type of cheese or similar commodities by the Agricultural Marketing Service?

Analyzing historical spending patterns for this specific cheese blend or similar commodities by the Agricultural Marketing Service (AMS) would provide crucial context for evaluating the current award. Without access to historical procurement data for AMS, it's difficult to determine if the $483,943.68 award represents an increase, decrease, or stable level of spending compared to previous periods. Understanding past contract values, quantities, and awardees for similar food donations could reveal trends in pricing, supplier reliability, and the overall scale of such procurements, aiding in a more robust value-for-money assessment.

What are the specific risks associated with the 'economic price adjustment' clause in this contract?

The 'economic price adjustment' (EPA) clause in this fixed-price contract introduces uncertainty regarding the final cost of the cheese. This clause allows for adjustments to the contract price based on fluctuations in specified economic factors, typically related to the cost of raw materials or labor. For taxpayers, the primary risk is that the final price paid could exceed the initially awarded amount if market prices for cheese ingredients (like milk, energy, or packaging) increase significantly between the time of award and delivery. This makes budget forecasting more challenging and could potentially lead to higher overall program costs than anticipated at the outset.

What is the typical duration for similar USDA food donation commodity contracts?

The typical duration for similar USDA food donation commodity contracts can vary significantly depending on the specific commodity, the quantity required, and the program's needs. Contracts for perishable goods might have shorter durations, focusing on immediate delivery, while those for shelf-stable items could extend over longer periods. This particular contract has a duration of 69 days (from February 20, 2026, to April 30, 2026), which is relatively short. This suggests a need for prompt fulfillment, possibly related to immediate distribution requirements or seasonal availability of the product.

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: 123J1426B0130

Offers Received: 4

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: $483,944

Exercised Options: $483,944

Current Obligation: $483,944

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1426D0004

IDV Type: IDC

Timeline