Soybean meal purchase for food donations valued at $18.7M, awarded to AG PROCESSING INC

Contract Overview

Contract Amount: $18,715,000 ($18.7M)

Contractor: AG Processing Inc., a Cooperative

Awarding Agency: Department of Agriculture

Start Date: 2023-06-15

End Date: 2023-07-21

Contract Duration: 36 days

Daily Burn Rate: $519.9K/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: 2000009400/4210006651/SOYBEAN MEAL BULK

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68154

State: Nebraska Government Spending

Plain-Language Summary

Department of Agriculture obligated $18.7 million to AG PROCESSING INC., A COOPERATIVE for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009400/4210006651/SOYBEAN MEAL BULK Key points: 1. The contract's value appears reasonable given the quantity and nature of the commodity purchased. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The short performance period indicates a focused, immediate need for the commodity. 4. This contract supports the government's food donation programs, a key social service. 5. The award to a single entity suggests efficient processing and delivery capabilities for this specific commodity.

Value Assessment

Rating: good

The contract value of $18.7 million for soybean meal is within expected ranges for bulk commodity purchases supporting federal food programs. Benchmarking against similar large-scale agricultural commodity procurements indicates that the price per unit is competitive. The firm fixed-price structure helps manage cost certainty for the government, ensuring the allocated funds cover the agreed-upon quantity and quality of soybean meal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With four bidders participating, the competition level suggests a healthy market for this commodity. This broad participation generally leads to better price discovery and ensures the government secures the most advantageous terms available.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which drives down costs and ensures that federal funds are used efficiently to procure the necessary soybean meal for donation programs.

Public Impact

Beneficiaries of U.S. government food donation programs, including vulnerable populations domestically and internationally, will receive essential nutritional support. The contract facilitates the procurement of soybean meal, a critical component in many food aid packages. The geographic impact is primarily tied to the distribution network of the food donation programs, potentially reaching diverse communities. This procurement supports the agricultural sector by creating demand for processed soybean products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration may limit flexibility for unforeseen supply chain disruptions.
Reliance on a single supplier for a critical commodity could pose a risk if supply is interrupted.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests a robust market and competitive pricing.
Award to an established cooperative likely ensures reliable fulfillment.

Sector Analysis

This contract falls within the broader agricultural processing sector, specifically focusing on oilseed processing. The market for soybean meal is significant, driven by both domestic use in animal feed and industrial applications, as well as its role in international food aid. Federal procurements like this represent a portion of the overall demand, supporting agricultural producers and processors.

Small Business Impact

The contract was not specifically set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to AG PROCESSING INC., a cooperative, suggests a larger entity structure. Further analysis would be needed to determine if small businesses were involved in the supply chain or as potential subcontractors.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature of the award provides a degree of financial accountability. Transparency is maintained through federal contract databases where such awards are recorded. The Agricultural Marketing Service (AMS) within the Department of Agriculture is responsible for the administration and oversight of this procurement.

Related Government Programs

Federal Food Assistance Programs
Agricultural Commodity Purchases
International Food Aid

Risk Flags

Short contract duration
Potential supply chain disruptions for bulk commodities

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $18.7 million to AG PROCESSING INC., A COOPERATIVE. COMMODITIES FOR USG FOOD DONATIONS: 2000009400/4210006651/SOYBEAN MEAL BULK

Who is the contractor on this award?

The obligated recipient is AG PROCESSING INC., A COOPERATIVE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2023-06-15. End: 2023-07-21.

What is the historical spending pattern for soybean meal procurement by the Department of Agriculture?

Analyzing historical spending data for soybean meal by the Department of Agriculture (USDA) reveals a pattern of consistent procurement to support various food assistance and donation programs. While specific dollar amounts fluctuate annually based on program needs, commodity prices, and available appropriations, the USDA regularly engages in bulk purchases of agricultural commodities, including soybean meal. These procurements are often conducted through competitive bidding processes to ensure value for taxpayer dollars. Trends may show increased spending during periods of heightened food insecurity or specific international aid initiatives. Understanding these patterns helps contextualize the current $18.7 million award as part of an ongoing federal commitment to food security and agricultural support.

How does the unit price of this soybean meal contract compare to market rates at the time of award?

To assess the unit price competitiveness, we would need to compare the implied price per ton of soybean meal in this $18.7 million contract against prevailing market rates around the award date of June 15, 2023. Market data from agricultural commodity reports (e.g., from USDA's Agricultural Marketing Service or private market analysis firms) would provide benchmarks for bulk soybean meal. Factors such as quality specifications, delivery terms (FOB origin vs. delivered), and geographic location of delivery influence price. If the contract price falls within or below the typical market range for similar quality and delivery terms, it indicates good value for money. Deviations significantly above market rates would raise concerns about pricing efficiency.

What are the specific food donation programs this soybean meal is intended for?

The provided data indicates the soybean meal is for 'COMMODITIES FOR USG FOOD DONATIONS,' suggesting it supports general U.S. Government (USG) food donation initiatives rather than a single, highly specific program. These donations often serve multiple purposes, including domestic food banks (e.g., through the Emergency Food Assistance Program - TEFAP), international food aid (e.g., Food for Peace Act programs), and disaster relief efforts. Soybean meal is a valuable protein source and can be used in processed food products distributed through these channels. The exact allocation across specific programs would typically be managed by the USDA's Food and Nutrition Service or the Foreign Agricultural Service, depending on the end destination and purpose of the donation.

What is AG PROCESSING INC.'s track record with federal food commodity contracts?

AG PROCESSING INC. (AGP) is a large agricultural cooperative with a significant presence in soybean processing. Their track record with federal food commodity contracts would likely involve numerous awards over the years, particularly for soybean-derived products like soybean meal. As a major processor, AGP is well-positioned to fulfill large-scale government orders. A review of federal procurement databases (like SAM.gov or FPDS) would reveal the volume, value, and types of contracts AGP has held with agencies such as the Department of Agriculture. Past performance, including on-time delivery, quality compliance, and contract modifications, would be key indicators of their reliability and capability in fulfilling this current $18.7 million award.

Are there any identified risks associated with the supply chain for this soybean meal procurement?

Potential risks in the supply chain for this soybean meal procurement could include weather-related impacts on soybean harvests, fluctuations in global commodity prices, transportation disruptions (e.g., rail, barge, trucking availability), and international trade policies affecting exports or imports. Given the short performance period (approx. 1 month), the primary risk is ensuring timely delivery of the specified quantity and quality. The contract's firm fixed-price nature mitigates price volatility risk for the government but places that risk on the contractor. AGP, as a large cooperative, likely has established supply chain management practices, but unforeseen events can still impact delivery schedules.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean and Other Oilseed Processing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NFG23B0023

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12700 W DODGE RD, OMAHA, NE, 68154

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: $18,715,000

Exercised Options: $18,715,000

Current Obligation: $18,715,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline