Agriculture contract for grain products awarded to Archer Daniels Midland Co. for over $20 million

Contract Overview

Contract Amount: $20,118,084 ($20.1M)

Contractor: Archer Daniels Midland CO

Awarding Agency: Department of Agriculture

Start Date: 2008-03-13

End Date: 2008-04-15

Contract Duration: 33 days

Daily Burn Rate: $609.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FOR GRAIN PRODUCTS

Place of Performance

Location: OVERLAND PARK, JOHNSON County, KANSAS, 66225

State: Kansas Government Spending

Plain-Language Summary

Department of Agriculture obligated $20.1 million to ARCHER DANIELS MIDLAND CO for work described as: FOR GRAIN PRODUCTS Key points: 1. Value for money appears reasonable given the firm fixed price contract type. 2. Competition dynamics indicate a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators are low due to the firm fixed price and established contractor. 4. Performance context is limited without specific delivery details, but the contract duration is short. 5. Sector positioning is within agricultural wholesale trade, a mature market.

Value Assessment

Rating: good

The contract value of over $20 million for grain products is substantial. Without specific details on the quantity and type of grain, a direct per-unit cost comparison is difficult. However, the firm fixed price contract suggests that the price was determined upfront and is not subject to change, which can be advantageous for the government. Benchmarking against similar large-scale grain procurements would provide a clearer picture of value.

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 had the opportunity to submit proposals. The presence of three bidders, as suggested by the 'no' field, points to a healthy level of competition for this procurement. This competitive environment generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price for the required grain products.

Public Impact

Farmers and agricultural producers benefit indirectly through the stable procurement of grain products. The services delivered involve the wholesale purchase and likely distribution of grain. The geographic impact is centered in Kansas (ST: KS, SN: KANSAS), a key agricultural state. Workforce implications are likely within the logistics and wholesale distribution sectors of the agricultural industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating broad market engagement.
Firm fixed price contract type helps control costs and budget certainty.
Contract duration is relatively short (33 days), suggesting a focused procurement.

Sector Analysis

This contract falls within the agricultural wholesale trade sector, specifically for grain and field beans. This is a critical component of the food supply chain. The market size for grain products is vast, with significant annual spending by government agencies for various purposes, including strategic reserves and support programs. This contract represents a portion of that overall spending.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The primary contractor, Archer Daniels Midland Co., is a large corporation, and its internal subcontracting practices would determine any indirect impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Agriculture's Farm Service Agency. Accountability measures are inherent in the firm fixed price contract, requiring delivery of specified goods. Transparency is generally provided through contract award databases. Inspector General jurisdiction would apply if any fraud or mismanagement were suspected.

Related Government Programs

Agricultural Commodity Purchases
Farm Support Programs
Food Security Initiatives

Risk Flags

Lack of specific commodity details limits in-depth value analysis.
Historical spending comparison requires access to more granular contract data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $20.1 million to ARCHER DANIELS MIDLAND CO. FOR GRAIN PRODUCTS

Who is the contractor on this award?

The obligated recipient is ARCHER DANIELS MIDLAND CO.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Farm Service Agency).

What is the total obligated amount?

The obligated amount is $20.1 million.

What is the period of performance?

Start: 2008-03-13. End: 2008-04-15.

What specific types and quantities of grain products were procured under this contract?

The provided data specifies the North American Industry Classification System (NAICS) code 424510 for 'Grain and Field Bean Merchant Wholesalers,' indicating the general category of goods. However, it does not detail the exact types (e.g., corn, wheat, soybeans) or precise quantities of grain products purchased. This level of detail is typically found in the contract's statement of work or delivery orders, which are not included in the summary data. Understanding the specific commodities is crucial for a comprehensive value assessment.

How does the awarded price compare to historical spending for similar grain procurements by the Farm Service Agency?

To compare the awarded price of over $20 million to historical spending, one would need access to historical contract data for similar grain products procured by the Farm Service Agency. This would involve identifying contracts with comparable quantities, types of grain, and delivery locations within the same or similar timeframes. Analyzing trends in pricing, considering factors like market fluctuations and inflation, would be necessary to determine if this contract represents a favorable or unfavorable price point relative to past procurements. Without this historical context, a definitive comparison cannot be made.

What is Archer Daniels Midland Co.'s track record with federal contracts, particularly with the Department of Agriculture?

Archer Daniels Midland Co. (ADM) is a major global agribusiness and food processing corporation with a significant history of federal contracting. They frequently engage with agencies like the Department of Agriculture for various agricultural commodities and services. A review of ADM's federal contract history would likely reveal numerous awards across different agencies and contract types. Assessing their past performance, including on-time delivery, quality compliance, and any past disputes or contract terminations, would provide insight into their reliability as a contractor for this specific grain products award.

What were the key performance metrics or delivery requirements outlined in this contract?

The provided data indicates a 'FIRM FIXED PRICE' contract with a duration of 33 days, suggesting a relatively short-term procurement focused on the timely delivery of grain products. However, the specific performance metrics, such as quality standards, delivery schedules, locations, and any penalties for non-compliance, are not detailed in the summary. These critical elements would be defined in the contract's statement of work and are essential for evaluating the contractor's performance and the overall success of the procurement.

What is the estimated market value or benchmark price for the grain products procured under this contract?

Determining the estimated market value or benchmark price for the grain products requires detailed knowledge of the specific commodities, quantities, and quality specifications. Grain markets are highly volatile, influenced by global supply and demand, weather patterns, and geopolitical events. To establish a benchmark, one would need to consult current commodity market reports, futures prices, and potentially data from other government or commercial procurements of similar goods. Without these specifics, providing an accurate market benchmark for this $20+ million contract is not feasible.

Industry Classification

NAICS: Wholesale Trade › Farm Product Raw Material Merchant Wholesalers › Grain and Field Bean Merchant Wholesalers

Product/Service Code: NONMETALLIC CRUDE MATERIALS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4666 E FARIES PKWY, DECATUR, IL, 13

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,118,084

Exercised Options: $20,118,084

Current Obligation: $20,118,084

Timeline