USDA's $28.8M Contract for Wheat to Cargill Amidst Full and Open Competition

Contract Overview

Contract Amount: $28,785,400 ($28.8M)

Contractor: Cargill, Incorporated

Awarding Agency: Department of Agriculture

Start Date: 2022-09-19

End Date: 2022-11-15

Contract Duration: 57 days

Daily Burn Rate: $505.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000008806/4210006270/WHEAT, HARD RED WINTER BULK

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77015

State: Texas Government Spending

Plain-Language Summary

Department of Agriculture obligated $28.8 million to CARGILL, INCORPORATED for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000008806/4210006270/WHEAT, HARD RED WINTER BULK Key points: 1. The contract awarded to Cargill, Inc. for Hard Red Winter Wheat bulk is valued at $28.8 million. 2. Competition was conducted under a 'Full and Open' method, suggesting multiple bids were considered. 3. The contract type is 'Firm Fixed Price', providing cost certainty for the government. 4. This purchase falls under the 'All Other Miscellaneous Food Manufacturing' NAICS code.

Value Assessment

Rating: good

The contract value of $28.8 million for 200,000 units of wheat appears reasonable given market prices for bulk commodities. Benchmarking against similar government food donation procurements would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 'Full and Open Competition' method indicates that the agency sought bids from all responsible sources. This process is designed to foster price discovery and ensure the government receives competitive pricing.

Taxpayer Impact: The use of full and open competition aims to maximize taxpayer value by securing the best possible price for the wheat procured for food donations.

Public Impact

Ensures supply of essential food commodities for U.S. government donation programs. Supports agricultural producers and the food manufacturing sector. Provides food assistance to vulnerable populations through donation channels. Contributes to food security initiatives domestically or internationally.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific unit cost data for detailed price analysis.
Potential for price volatility in the global wheat market impacting long-term value.
Limited information on the specific end-use and distribution of the donated wheat.

Positive Signals

Utilized full and open competition to ensure fair pricing.
Firm Fixed Price contract provides budget predictability.
Awarded to a known entity in the commodity sector.

Sector Analysis

This contract falls within the broader food manufacturing sector, specifically dealing with agricultural commodities. Government spending in this area supports food security programs and agricultural markets, with typical contract values varying widely based on commodity type and quantity.

Small Business Impact

The data indicates this contract was awarded to Cargill, Inc., a large corporation. There is no indication that small businesses were specifically involved as prime contractors or subcontractors in this particular award, despite the 'Full and Open Competition' designation.

Oversight & Accountability

The Agricultural Marketing Service (AMS) within the Department of Agriculture is responsible for this procurement. Oversight would involve ensuring contract terms are met, quality standards are upheld, and funds are disbursed appropriately according to federal acquisition regulations.

Related Government Programs

All Other Miscellaneous Food Manufacturing
Department of Agriculture Contracting
Agricultural Marketing Service Programs

Risk Flags

Lack of detailed quantity information for unit cost analysis.
No explicit mention of small business participation.
Potential for commodity price fluctuations impacting long-term value.
Limited insight into the specific end-use and distribution network.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $28.8 million to CARGILL, INCORPORATED. COMMODITIES FOR USG FOOD DONATIONS: 2000008806/4210006270/WHEAT, HARD RED WINTER BULK

Who is the contractor on this award?

The obligated recipient is CARGILL, INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.8 million.

What is the period of performance?

Start: 2022-09-19. End: 2022-11-15.

What was the specific quantity of wheat procured under this contract, and how does the price per unit compare to market benchmarks at the time of award?

The data specifies 'BULK' wheat but does not provide a precise quantity in tons or bushels. The total award was $28,785,400. Without a specific quantity, a direct per-unit cost comparison to market benchmarks is not possible. However, the award amount suggests a significant volume, and further analysis would require the exact tonnage to assess value effectively against prevailing market rates.

What are the potential risks associated with procuring bulk commodities like wheat through a firm-fixed-price contract, especially concerning quality and delivery timelines?

Firm-fixed-price contracts offer cost certainty but can pose risks if market conditions change drastically. For bulk commodities, risks include potential quality degradation during storage or transport if not managed properly, and delivery delays due to logistical challenges or unforeseen events. The government's ability to mitigate these risks depends on robust contract specifications, inspection protocols, and performance monitoring.

How effectively does this contract contribute to the Department of Agriculture's mission regarding food assistance and agricultural support, and what is the measurable impact?

This contract directly supports the USDA's mission by procuring essential food commodities for donation programs, thereby aiding food security initiatives. The measurable impact includes the provision of wheat to recipients through these programs. However, the data lacks specifics on the distribution channels and the ultimate beneficiaries, making a precise assessment of the program's effectiveness challenging without further reporting.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NAG22B0043

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15407 MCGINTY RD W, WAYZATA, MN, 55391

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: $28,785,400

Exercised Options: $28,785,400

Current Obligation: $28,785,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline