Agriculture Department awards $19.6M contract for rice milling services to ADM RICE INC

Contract Overview

Contract Amount: $19,616,625 ($19.6M)

Contractor: ADM Rice Inc

Awarding Agency: Department of Agriculture

Start Date: 2025-03-20

End Date: 2025-04-15

Contract Duration: 26 days

Daily Burn Rate: $754.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010690/4210007334/RICE, MILLED BULK

Place of Performance

Location: DESTREHAN, SAINT CHARLES County, LOUISIANA, 70047

State: Louisiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $19.6 million to ADM RICE INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010690/4210007334/RICE, MILLED BULK Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for a firm fixed price, which helps manage cost certainty. 3. The duration of the contract is 26 days, indicating a short-term need. 4. The award amount of $19.6 million for a 26-day service period warrants scrutiny for value. 5. The specific service is rice milling, a key component of food donation programs. 6. The contractor, ADM RICE INC., is a significant player in the agricultural commodities market.

Value Assessment

Rating: fair

The contract value of $19.6 million for a 26-day period for rice milling services appears high on a daily basis. Benchmarking against similar short-term milling contracts is difficult without more specific service details. However, the firm fixed price structure provides cost certainty for the government. The value proposition hinges on the efficiency and quality of ADM RICE INC.'s milling operations during this period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of six bidders (no=6) suggests a reasonably competitive environment for this specific service. The competitive nature should theoretically drive pricing towards market rates, although the final price is fixed.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it aims to secure the best possible price and quality by allowing all eligible sources to participate.

Public Impact

This contract directly supports USG food donation programs by ensuring the milling of rice. The services delivered will contribute to the availability of processed rice for distribution. The contract is geographically focused on Louisiana (st=LA, sn=LOUISIANA), where the milling is likely to occur. The contract supports the agricultural sector workforce involved in rice processing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High daily cost for a short-term service needs justification.
Limited contract duration may indicate a specific, time-sensitive need that could be disruptive if not met efficiently.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed price contract provides cost predictability.
Contractor is a known entity in the agricultural commodities sector.

Sector Analysis

The contract falls within the agricultural processing sector, specifically focusing on rice milling. This is a critical step in preparing agricultural commodities for consumption and donation. The market for agricultural commodity processing is large and competitive, with established players like ADM RICE INC. The government's role in procuring such services is often tied to food security and humanitarian aid programs.

Small Business Impact

The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on the small business ecosystem is likely minimal unless ADM RICE INC. engages small businesses in its supply chain or operations.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of Agriculture's Agricultural Marketing Service. Oversight would typically involve contract officers, program managers, and potentially the agency's Inspector General to ensure compliance with terms and conditions, quality of service, and proper utilization of funds. Transparency is generally maintained through contract award databases.

Related Government Programs

USG Food Donation Programs
Agricultural Commodity Procurement
Food Aid and Humanitarian Assistance

Risk Flags

High daily cost warrants further investigation.
Short contract duration may indicate urgency or a specific, limited need.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $19.6 million to ADM RICE INC. COMMODITIES FOR USG FOOD DONATIONS: 2000010690/4210007334/RICE, MILLED BULK

Who is the contractor on this award?

The obligated recipient is ADM RICE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2025-03-20. End: 2025-04-15.

What is the historical spending pattern for rice milling services by the Department of Agriculture?

Analyzing historical spending on rice milling requires access to detailed procurement data over several fiscal years. Without specific historical data for this contract vehicle or similar services, it's difficult to establish a precise pattern. However, the Department of Agriculture frequently procures agricultural commodities and related processing services to support domestic and international food assistance programs. Spending can fluctuate based on global commodity prices, program needs, and available appropriations. The current award of $19.6 million for a short duration suggests a potentially significant, albeit temporary, requirement for milling capacity.

How does the price per ton of milled rice compare to market rates, given the contract value?

To compare the price per ton, we would need to know the total quantity of rice to be milled under this $19.6 million contract. The data provided only specifies the contract value and the service type (rice milling), not the volume. If, for example, the contract was for 100,000 tons, the milling cost would be approximately $196 per ton. This figure would then need to be benchmarked against prevailing market rates for rice milling services, which can vary significantly based on rice type, milling complexity, location, and volume. Without the quantity, a direct price-per-ton comparison is not feasible.

What specific risks are associated with ADM RICE INC. as a contractor for this service?

ADM RICE INC. is a subsidiary of Archer Daniels Midland (ADM), a major global agricultural processor and food ingredient provider. As a large, established entity, the primary risks might not be related to contractor capability or financial stability, which are generally robust. Potential risks could include supply chain disruptions affecting rice availability, quality control issues during milling, or logistical challenges in delivery. Given ADM's extensive operations, there's also a possibility of conflicts of interest if they are both supplying the raw rice and milling it, though this contract appears to be for milling services specifically. Performance monitoring will be key to mitigating these risks.

What is the expected impact of this contract on the USG's food donation program effectiveness?

This contract is crucial for ensuring the effectiveness of USG food donation programs by providing essential rice milling services. Properly milled rice is a staple food and a key component of many food aid packages. By securing these services through a competitive process, the government aims to ensure a reliable supply of quality milled rice, thereby enhancing the nutritional value and usability of donated food. The short duration suggests it might be fulfilling a specific, immediate need or a phase within a larger program, contributing to timely distribution and program objectives.

How does the competition level (6 bidders) influence the value for money achieved in this contract?

A competition level of six bidders is generally considered healthy and suggests that the government had a good range of options to choose from. This level of competition typically drives down prices and encourages bidders to offer their best terms and services to win the contract. For taxpayers, this means a higher likelihood of achieving good value for money, as the price is likely to be more reflective of market conditions rather than being inflated due to a lack of alternatives. The firm fixed price further solidifies the value by capping the government's expenditure.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Rice Milling

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NFG25B0009

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Archer-Daniels-Midland Company

Address: 10 BANK ST, WHITE PLAINS, NY, 10606

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,616,625

Exercised Options: $19,616,625

Current Obligation: $19,616,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline