USDA awards $43M for precooked meat boxes, highlighting agricultural supply chain needs

Contract Overview

Contract Amount: $42,972,265 ($43.0M)

Contractor: Mistica Foods LLC

Awarding Agency: Department of Agriculture

Start Date: 2020-05-14

End Date: 2020-09-19

Contract Duration: 128 days

Daily Burn Rate: $335.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 568

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000006919/4100020244/PRECOOKED MEAT BOX

Place of Performance

Location: ADDISON, DUPAGE County, ILLINOIS, 60101

State: Illinois Government Spending

Plain-Language Summary

Department of Agriculture obligated $43.0 million to MISTICA FOODS LLC for work described as: 2000006919/4100020244/PRECOOKED MEAT BOX Key points: 1. Contract value of $43M suggests significant demand for processed meat products. 2. Full and open competition indicates a potentially competitive bidding environment. 3. Firm Fixed Price contract type offers cost certainty for the government. 4. Short contract duration (128 days) points to an urgent or specific need. 5. Awarded by the Agricultural Marketing Service, focusing on food distribution. 6. Contractor, MISTICA FOODS LLC, is a key player in this specific food category.

Value Assessment

Rating: good

The contract value of $43 million for precooked meat boxes appears substantial, reflecting a significant procurement. Benchmarking against similar contracts for bulk food items would be necessary for a precise value-for-money assessment. However, the firm fixed-price structure suggests a degree of cost control. The relatively short performance period might indicate a response to immediate needs, potentially impacting unit prices compared to longer-term agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors were eligible to bid. The number of bids received (568) indicates a highly competitive process, which typically drives down prices and increases the likelihood of securing favorable terms for the government. This level of competition is a positive sign for price discovery and efficient use of taxpayer funds.

Taxpayer Impact: The extensive competition for this contract suggests that taxpayers benefited from a robust marketplace, likely resulting in a more competitive price than if the contract had been awarded through a less open process.

Public Impact

Beneficiaries include recipients of USDA food assistance programs, likely in Illinois. Services delivered include the provision of processed and precooked meat products. Geographic impact is focused on Illinois (IL), where the product was delivered. Workforce implications may involve jobs in meat processing and food distribution for MISTICA FOODS LLC and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future procurements if competition dynamics change.
Dependence on a single contractor for a critical food supply item within the specified period.

Positive Signals

Successful execution of a large-scale food procurement under competitive conditions.
Meeting a specific need within the USDA's food distribution programs.
Demonstrated capacity of MISTICA FOODS LLC to fulfill a significant contract.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically focusing on processed meats. The North American Industry Classification System (NAICS) code 311612 ('Meat Processed from Carcasses') confirms this specialization. The market for processed meats is substantial, driven by both commercial demand and government procurement for various programs. This award represents a significant transaction within this niche.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the large contract value and the nature of the product, it is likely that larger food processing companies were the primary bidders. There is no explicit information on subcontracting plans, but large prime contractors often engage small businesses for specialized services or supplies.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature simplifies some aspects of financial oversight. Accountability is managed through contract terms and performance requirements. Transparency is generally maintained through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Emergency Food Assistance Program

Risk Flags

Potential for supply chain disruption
Quality control concerns for processed foods
Short contract duration may limit competitive pricing options

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $43.0 million to MISTICA FOODS LLC. 2000006919/4100020244/PRECOOKED MEAT BOX

Who is the contractor on this award?

The obligated recipient is MISTICA FOODS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $43.0 million.

What is the period of performance?

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

What is MISTICA FOODS LLC's track record with federal contracts, particularly for food provisions?

MISTICA FOODS LLC has a history of receiving federal contracts, primarily with the Department of Agriculture. This specific contract for precooked meat boxes is a significant award. Analyzing their past performance on similar food supply contracts, including delivery timeliness, product quality, and adherence to specifications, would provide further insight into their reliability. A review of their contract history might reveal patterns in contract types, values, and agencies served, helping to assess their experience and capacity in fulfilling government requirements.

How does the $43 million contract value compare to similar USDA procurements for processed meats?

The $43 million award for precooked meat boxes is a substantial sum, indicating a significant volume or high-value product. To benchmark its value, one would compare it against other USDA contracts for similar food items, such as other types of processed meats, poultry, or ready-to-eat meals, awarded around the same period. Factors like the specific type of meat, processing level, packaging, and delivery requirements influence price. A higher number of bids (568) suggests competitive pricing, potentially making this award a good value relative to market rates for bulk processed meats.

What are the primary risks associated with this contract, considering its short duration and specific product?

Key risks include potential supply chain disruptions affecting MISTICA FOODS LLC's ability to deliver within the short 128-day window, especially given the specialized nature of precooked meat. Quality control is another risk; ensuring consistent product safety and adherence to nutritional standards is critical. The firm fixed-price nature means the contractor bears the risk of cost overruns, but this could also lead to pressure on quality or sourcing if not managed carefully. Dependence on a single supplier for a specific need also poses a risk if unforeseen issues arise.

How effective is the Agricultural Marketing Service (AMS) in managing food procurement contracts of this scale?

The AMS plays a crucial role in facilitating the marketing of agricultural products and often manages large-scale food procurements for various federal programs. Their effectiveness in managing contracts like this one can be assessed by examining contract completion rates, the number of disputes or contract modifications, and feedback from program beneficiaries. The fact that this contract was awarded under full and open competition with a high number of bidders suggests a well-managed solicitation process. Continued monitoring of contract performance and adherence to specifications would be key indicators of ongoing effectiveness.

What are the historical spending patterns for precooked meat or similar processed food items by the USDA?

Historical spending data for precooked meat and similar processed food items by the USDA would reveal trends in demand and procurement strategies. Analyzing past awards for these categories can show fluctuations in contract values, the number of contractors involved, and the prevalence of different contract types (e.g., fixed-price vs. cost-reimbursement). Understanding these patterns helps contextualize the current $43 million award, indicating whether it represents a typical, increased, or decreased level of spending for such products. It also highlights the USDA's consistent or evolving role in supporting the processed food market.

What is the significance of the 'Meat Processed from Carcasses' NAICS code in understanding this contract's scope?

The NAICS code 311612, 'Meat Processed from Carcasses,' precisely defines the scope of this contract, indicating that the procurement is for meat products that have undergone processing beyond simple slaughter. This includes activities like cutting, grinding, cooking, and packaging. Understanding this code helps clarify that the contract is not for raw meat but for value-added, ready-to-use or ready-to-heat meat items. This specificity is crucial for identifying relevant industry players, assessing market competition, and comparing this procurement to others within the processed meat sector.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Meat Processed from Carcasses

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 123J1420R0377/4100020244

Offers Received: 568

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 50 W COMMERCIAL AVE, ADDISON, IL, 60101

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

Financial Breakdown

Contract Ceiling: $42,972,265

Exercised Options: $42,972,265

Current Obligation: $42,972,265

Actual Outlays: $39,513,795

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline