USDA's $45.8M contract for fresh fruit and vegetables awarded to HEEREN, LLC

Contract Overview

Contract Amount: $45,813,949 ($45.8M)

Contractor: Heeren, LLC

Awarding Agency: Department of Agriculture

Start Date: 2020-05-14

End Date: 2020-09-19

Contract Duration: 128 days

Daily Burn Rate: $357.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 568

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000006919/4100020108/FRESH FRUIT/VEGETABLE BOX

Place of Performance

Location: COMSTOCK PARK, KENT County, MICHIGAN, 49321

State: Michigan Government Spending

Plain-Language Summary

Department of Agriculture obligated $45.8 million to HEEREN, LLC for work described as: 2000006919/4100020108/FRESH FRUIT/VEGETABLE BOX Key points: 1. Contract value of $45.8M for perishable food manufacturing services. 2. Awarded under full and open competition, indicating a broad market solicitation. 3. Contract duration of 128 days suggests a short-term, potentially seasonal need. 4. Firm Fixed Price contract type aims to control costs and provide predictability. 5. The North American Industry Classification System (NAICS) code 311991 points to a specific food processing segment. 6. Geographic scope appears to be Michigan (ST: MI, SN: MICHIGAN).

Value Assessment

Rating: fair

The contract value of $45.8M for a 128-day period for fresh fruit and vegetable boxes appears substantial. Benchmarking this against similar contracts for food box programs, especially those initiated during emergency periods like the pandemic, is crucial. Without specific data on the quantity of boxes or the types of produce included, a precise value-for-money assessment is difficult. However, the firm fixed-price structure suggests an attempt to manage costs upfront.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit bids. The number of offers received (568) indicates significant market interest and a robust competitive environment. This level of competition is generally favorable for price discovery and potentially leads to more competitive pricing for the government.

Taxpayer Impact: A high number of bidders suggests that taxpayers likely benefited from a competitive bidding process, which should have driven down the price for the goods and services procured.

Public Impact

Beneficiaries likely include individuals or families receiving food assistance, potentially through programs like the Farmers to Families Food Box Program. Services delivered include the provision of fresh fruit and vegetable boxes, contributing to food security and access to nutritious produce. The geographic impact is specified as Michigan, suggesting the program aimed to serve residents within that state. Workforce implications could involve jobs in food processing, packaging, and distribution within the Michigan area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited shelf-life of perishable goods requiring efficient logistics.
Dependence on a single contractor (HEEREN, LLC) for a significant dollar amount raises concentration risk.
The short contract duration might indicate a reactive or emergency procurement rather than a planned, long-term initiative.

Positive Signals

Awarded under full and open competition with a high number of offers (568), indicating strong market interest and potential for good pricing.
Firm Fixed Price contract type helps manage budget certainty.
The contract addresses a critical need for food provision, particularly for fresh produce.

Sector Analysis

This contract falls within the food manufacturing and distribution sector, specifically related to perishable goods. The market for government food procurement is substantial, encompassing various agencies and programs aimed at nutrition assistance, disaster relief, and support for agricultural producers. Comparable spending benchmarks would involve analyzing other large-scale food box or commodity distribution contracts, particularly those initiated during periods of high demand or crisis.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (SB: false, SS: false). While HEEREN, LLC is the prime contractor, there is no explicit information on subcontracting plans with small businesses. The impact on the small business ecosystem would depend on whether HEEREN, LLC engaged small businesses for sourcing produce or for logistical support.

Oversight & Accountability

Oversight would typically be managed by the Agricultural Marketing Service (AMS) within the USDA. Accountability measures are embedded in the contract terms, including performance requirements and the firm fixed-price structure. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Farmers to Families Food Box Program
USDA Nutrition Assistance Programs
Commodity Supplemental Food Program
Emergency Food Assistance Program

Risk Flags

Perishable Goods Logistics
Short Contract Duration
Potential Supply Chain Disruptions

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $45.8 million to HEEREN, LLC. 2000006919/4100020108/FRESH FRUIT/VEGETABLE BOX

Who is the contractor on this award?

The obligated recipient is HEEREN, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $45.8 million.

What is the period of performance?

Start: 2020-05-14. End: 2020-09-19.

What was the specific nature of the 'FRESH FRUIT/VEGETABLE BOX' provided under this contract?

The contract description 'FRESH FRUIT/VEGETABLE BOX' suggests the provision of pre-packaged assortments of fresh produce. While the exact contents are not detailed in the provided data, such programs typically aim to distribute a variety of fruits and vegetables to beneficiaries. The NAICS code 311991 (Perishable Prepared Food Manufacturing) indicates that the contractor was responsible for the assembly and packaging of these boxes, potentially including sourcing, quality control, and distribution logistics. The contract's duration (128 days) and the firm fixed-price nature imply a defined scope of work and deliverables within a specific timeframe.

How does the per-unit cost of these boxes compare to market rates or similar government programs?

A precise per-unit cost comparison is challenging without knowing the exact quantity, variety, and weight of produce in each box, as well as the specific distribution costs. The total contract value of $45.8 million over approximately four months (128 days) suggests a significant operational scale. To benchmark, one would need to analyze the average cost per pound or per box for similar USDA food box initiatives, especially those during the COVID-19 pandemic, and compare them to wholesale produce prices and typical distribution markups. The high number of bidders (568) suggests competitive pricing was sought, but the final value-for-money depends on the quality and quantity delivered relative to the cost.

What was the track record of HEEREN, LLC in fulfilling government contracts prior to this award?

Information regarding HEEREN, LLC's prior track record with government contracts is not detailed in the provided data snippet. A comprehensive assessment would require searching federal procurement databases (like FPDS or SAM.gov) for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or terminations. Understanding their experience with similar food distribution or perishable goods contracts would be key to evaluating their capability and reliability for this $45.8 million award.

What were the primary objectives and intended outcomes of this contract for the Department of Agriculture?

The primary objective of this contract, awarded by the USDA's Agricultural Marketing Service (AMS), was likely to procure and distribute fresh fruit and vegetable boxes to support food security initiatives. This could have been part of broader efforts to assist families in need, support agricultural markets impacted by disruptions (such as the COVID-19 pandemic), and ensure access to nutritious food. The intended outcomes would include increased consumption of fresh produce among beneficiaries, stabilization of demand for farmers, and efficient distribution of food resources within the specified geographic area (Michigan).

How did the 'full and open competition' process influence the final contract price and terms?

The 'full and open competition' process, evidenced by 568 offers received, is designed to maximize the number of potential bidders and foster a competitive environment. This typically drives down prices as contractors vie for the award by offering their best terms. For this $45.8 million contract, the extensive competition likely pressured HEEREN, LLC to submit a highly competitive bid. The firm fixed-price (FFP) contract type further locks in the price, meaning the government's cost is predetermined, shifting the risk of cost overruns to the contractor. The competition likely ensured that the FFP was set at a reasonable level reflective of market conditions.

Are there any specific performance risks associated with a short-duration contract for perishable goods?

Yes, short-duration contracts for perishable goods carry specific risks. The primary risk is ensuring timely sourcing, processing, packaging, and distribution before the produce spoils. This requires highly efficient logistics and supply chain management. For the contractor (HEEREN, LLC), there's a risk of incurring losses if they cannot manage the rapid turnover effectively within the 128-day timeframe. For the government, risks include potential disruptions in supply if the contractor faces unforeseen issues, and the need to quickly re-compete or find alternatives if the contract is not fulfilled satisfactorily. The short duration might also limit the ability to build long-term supplier relationships or achieve economies of scale.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › Perishable Prepared Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 123J1420R0377/4100020108

Offers Received: 568

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1055 7 MILE RD NW, COMSTOCK PARK, MI, 49321

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,813,949

Exercised Options: $45,813,949

Current Obligation: $45,813,949

Actual Outlays: $45,718,864

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline