Masters Gallery Foods awarded $31.9M contract for cheese manufacturing, highlighting potential value in specialized food production

Contract Overview

Contract Amount: $31,910,021 ($31.9M)

Contractor: Masters Gallery Foods, Incorporated

Awarding Agency: Department of Agriculture

Start Date: 2010-01-14

End Date: 2010-12-31

Contract Duration: 351 days

Daily Burn Rate: $90.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AGAP1-INV001 CHEDDAR/MOZZARELLA

Place of Performance

Location: PLYMOUTH, SHEBOYGAN County, WISCONSIN, 53073

State: Wisconsin Government Spending

Plain-Language Summary

Department of Agriculture obligated $31.9 million to MASTERS GALLERY FOODS, INCORPORATED for work described as: AGAP1-INV001 CHEDDAR/MOZZARELLA Key points: 1. Contract value of $31.9M suggests significant demand for specific dairy products. 2. Full and open competition after exclusion of sources indicates a structured procurement process. 3. Firm fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of 351 days points to a defined project scope. 5. Award to Masters Gallery Foods, Inc. positions them as a key supplier in this niche. 6. The North American Industry Classification System (NAICS) code 311513 confirms the focus on cheese manufacturing.

Value Assessment

Rating: good

The contract value of $31.9 million for cheese manufacturing appears reasonable given the scale of federal food procurement. Benchmarking against similar large-scale dairy contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests the government has secured predictable costs, which is a positive indicator for financial management. Without specific per-unit data, a direct comparison to market rates is challenging, but the overall award size implies a competitive bid process likely yielded fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial solicitations might have had limitations, the final award was made after a broad competitive process. The presence of 3 bidders suggests a healthy level of interest and competition for this specific requirement. This level of competition is generally favorable for price discovery and ensures that the government receives competitive offers.

Taxpayer Impact: A competitive process with multiple bidders helps ensure taxpayer dollars are used efficiently by driving down prices and encouraging high-quality service delivery.

Public Impact

Federal agencies, likely including military installations and food assistance programs, benefit from a reliable supply of cheese. The contract ensures the delivery of essential dairy products for various government feeding and distribution needs. The geographic impact is primarily within Wisconsin, where Masters Gallery Foods is located, but the product distribution will be nationwide. This contract supports jobs within the dairy processing sector, contributing to the agricultural economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw milk impacting long-term cost-effectiveness if not managed.
Dependence on a single supplier for a critical food item could pose supply chain risks.
Ensuring consistent quality and safety standards across all manufactured cheese batches is paramount.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Competitive bidding process likely secured favorable pricing for the government.
Established supplier with a track record in cheese manufacturing suggests reliability.

Sector Analysis

This contract falls within the broader food manufacturing sector, specifically focusing on dairy products. The cheese manufacturing industry is a significant part of the U.S. agricultural economy, with numerous players ranging from small artisanal producers to large industrial manufacturers. Federal procurement of dairy products is substantial, driven by military, domestic nutrition programs, and international aid. This award represents a portion of that overall federal spending, likely competing with other large food service providers and manufacturers for government contracts.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity capable of fulfilling the significant volume and specifications required. The lack of small business involvement in this specific prime contract may limit direct opportunities for smaller firms within this particular procurement, though they may participate in the broader food supply chain.

Oversight & Accountability

The contract is subject to standard federal procurement oversight, including reviews by the awarding agency (Department of Agriculture, Farm Service Agency) and potentially the Government Accountability Office (GAO) for bid protests. The firm fixed-price nature simplifies financial oversight compared to cost-reimbursement contracts. Transparency is maintained through public contract databases where award details are recorded. Inspector General reviews would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Food Procurement
National School Lunch Program
Commodity Supplemental Food Program
Federal Prison System Food Services

Risk Flags

Potential for supply chain disruption if contractor faces operational issues.
Risk of price escalation if market conditions change significantly, despite fixed-price contract.
Ensuring consistent quality and safety standards for perishable food items.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $31.9 million to MASTERS GALLERY FOODS, INCORPORATED. AGAP1-INV001 CHEDDAR/MOZZARELLA

Who is the contractor on this award?

The obligated recipient is MASTERS GALLERY FOODS, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2010-01-14. End: 2010-12-31.

What is the historical spending pattern for cheese manufacturing contracts by the Department of Agriculture?

Historical spending data for cheese manufacturing contracts by the Department of Agriculture reveals a consistent need for these products, driven by various federal programs. While specific figures fluctuate annually based on program needs and market conditions, the USDA regularly procures significant quantities of dairy products. For instance, in recent fiscal years, the USDA has awarded contracts totaling tens to hundreds of millions of dollars for dairy items, including cheese, butter, and milk. These procurements often support domestic farm price support programs and ensure availability for domestic food assistance initiatives. Analyzing trends over the past decade would show periods of increased or decreased spending influenced by agricultural policies, budget allocations, and specific program expansions or contractions. The AGAP1-INV001 contract awarded to Masters Gallery Foods in 2010 for $31.9 million is indicative of the scale of individual awards within this category, suggesting that such large contracts are not uncommon for meeting federal dairy requirements.

How does the price per pound of cheese under this contract compare to market rates at the time of award?

Determining the precise price per pound of cheese under the AGAP1-INV001 contract requires access to detailed delivery schedules and specific cheese types procured, which are not fully detailed in the provided data. However, we can infer potential value by considering the total award amount ($31.9 million) and the typical duration (351 days). If we assume a substantial volume of cheese was procured over this period, the government likely aimed for prices competitive with wholesale market rates. Federal procurement regulations mandate obtaining fair and reasonable prices, often achieved through competitive bidding. Without the exact quantity, a direct comparison is impossible. However, the 'Full and Open Competition After Exclusion of Sources' suggests a process designed to solicit competitive bids, implying the awarded price was likely at or below prevailing market rates for bulk cheese purchases at that time. Further analysis would necessitate examining USDA's internal cost assessments or market reports from 2010.

What are the specific risks associated with a firm fixed-price contract for perishable goods like cheese?

Firm fixed-price (FFP) contracts, while beneficial for budget certainty, present specific risks when applied to perishable goods like cheese. The primary risk for the government is that the contractor might cut corners on quality or freshness to maintain profitability if market conditions change unfavorably (e.g., sudden increases in raw milk costs or energy prices). Conversely, the contractor bears the risk of increased costs, which could lead to financial strain or, in extreme cases, default if they underestimated expenses. For perishable goods, timely delivery and appropriate storage are critical; any delays or failures in maintaining the cold chain could result in spoilage, leading to supply disruptions and potential financial penalties or contract termination. The government must have robust inspection and acceptance procedures to ensure the quality and safety of the delivered product meet specifications, mitigating the risk of receiving substandard or spoiled goods.

What is the track record of Masters Gallery Foods, Inc. in fulfilling federal contracts prior to this award?

Information regarding Masters Gallery Foods, Inc.'s specific track record with federal contracts prior to the AGAP1-INV001 award in 2010 is not detailed in the provided data snippet. However, the fact that they were awarded a significant contract of $31.9 million by the Department of Agriculture suggests they had demonstrated capabilities and potentially prior experience relevant to government procurement. Companies typically need to meet certain criteria regarding financial stability, past performance, and technical expertise to be considered for such awards, especially under full and open competition. A deeper dive into federal contract databases (like FPDS or SAM.gov) would be necessary to ascertain the full extent of their federal contracting history, including the types of contracts, agencies involved, performance ratings, and any past issues or successes. This would provide a more comprehensive understanding of their reliability as a federal supplier.

How does the geographic location of the awardee (Wisconsin) impact the logistics and cost of cheese delivery to federal facilities?

The award to Masters Gallery Foods, Inc., located in Wisconsin, has significant implications for the logistics and cost of cheese delivery to federal facilities. Wisconsin is a major dairy-producing state, often referred to as 'America's Dairyland,' which can provide a logistical advantage in terms of proximity to raw materials and established dairy processing infrastructure. This proximity may reduce inbound transportation costs for raw milk and potentially streamline the manufacturing process. However, federal facilities are geographically dispersed across the United States and globally. If the primary destination for the cheese is not concentrated near Wisconsin (e.g., East Coast or West Coast bases, or overseas installations), the outbound transportation costs could be substantial. The firm fixed-price nature of the contract means these transportation costs, whether inbound or outbound, are factored into the contractor's bid. The government benefits if the awardee's location offers overall cost efficiencies, but the final delivery points are the key determinant of the total logistical expense.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: AGAP1-001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 328 HIGHWAY PP, PLYMOUTH, WI, 06

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,910,021

Exercised Options: $31,910,021

Current Obligation: $31,910,021

Timeline