Department of Agriculture awards $120M contract for food manufacturing, with 171 delivery orders issued

Contract Overview

Contract Amount: $120,111,713 ($120.1M)

Contractor: Gold Star Foods, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2021-01-19

End Date: 2021-05-31

Contract Duration: 132 days

Daily Burn Rate: $909.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 171

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2000007490/4100022298/COMBINATION BOX

Place of Performance

Location: ONTARIO, SAN BERNARDINO County, CALIFORNIA, 91761

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $120.1 million to GOLD STAR FOODS, INC. for work described as: 2000007490/4100022298/COMBINATION BOX Key points: 1. Contract value of $120.1M suggests significant volume and potential for economies of scale. 2. Full and open competition indicates a broad market engagement, potentially leading to competitive pricing. 3. The high number of delivery orders (171) may point to a complex or phased delivery schedule. 4. Fixed-price contract type shifts risk to the contractor, potentially stabilizing costs for the government. 5. The contract falls under 'All Other Miscellaneous Food Manufacturing,' a broad category that may obscure specific product details. 6. Awarded to Gold Star Foods, Inc., a review of their past performance would be crucial for assessing reliability.

Value Assessment

Rating: good

The contract value of $120.1M for food manufacturing services appears substantial. Without specific details on the goods or services procured, a direct comparison to similar contracts is challenging. However, the fixed-price nature suggests a degree of cost certainty for the agency. The number of delivery orders (171) indicates a potentially high volume of transactions or a phased approach to fulfilling the contract requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of 171 delivery orders implies a potentially active and competitive environment throughout the contract's life, or at least a significant number of distinct requirements being met. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, ensuring that the government is not overpaying for goods and services.

Public Impact

The primary beneficiaries are likely the Department of Agriculture and potentially other federal agencies requiring food products. The contract supports the manufacturing and supply of miscellaneous food products. The geographic impact is centered in California, where the contractor is located. This contract likely supports jobs within the food manufacturing sector, particularly at Gold Star Foods, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep if delivery orders are not managed effectively under the fixed-price structure.
Dependence on a single contractor for a large volume of food products could pose supply chain risks.
The broad 'miscellaneous food manufacturing' category might mask specific quality control or nutritional standard concerns.

Positive Signals

Full and open competition suggests a robust market and potential for competitive pricing.
Fixed-price contract type provides cost predictability for the government.
The award to a single entity for a large sum indicates a potentially established relationship and capacity to handle significant volume.

Sector Analysis

The food manufacturing sector is a large and diverse industry. This contract, falling under 'All Other Miscellaneous Food Manufacturing,' represents a segment of this market focused on products not specifically categorized elsewhere. The $120.1M award is a significant sum within this sub-sector, indicating substantial procurement activity by the Department of Agriculture. Comparable spending benchmarks would depend heavily on the specific types of food products procured.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the large contract value, it is possible that larger businesses were the primary bidders. Further analysis would be needed to determine if small businesses were involved as subcontractors or if there were opportunities missed for small business participation.

Oversight & Accountability

Oversight would typically be managed by the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures would be tied to the terms of the fixed-price contract and the delivery orders issued. Transparency is generally facilitated through contract award databases, though specific details of the goods and services may be limited.

Related Government Programs

National School Lunch Program
Food and Nutrition Service (FNS) Programs
Department of Defense (DoD) Subsistence Prime Vendor Program

Risk Flags

Broad NAICS code limits specificity for benchmarking.
Potential for cost overruns if contractor's estimates are inaccurate.
Supply chain vulnerability if contractor faces disruptions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $120.1 million to GOLD STAR FOODS, INC.. 2000007490/4100022298/COMBINATION BOX

Who is the contractor on this award?

The obligated recipient is GOLD STAR FOODS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $120.1 million.

What is the period of performance?

Start: 2021-01-19. End: 2021-05-31.

What specific types of food products were procured under this contract?

The provided data categorizes this contract under 'All Other Miscellaneous Food Manufacturing' (NAICS code 311999). This is a broad classification that encompasses a wide range of food products not specifically listed under other manufacturing categories. Without further details from the contract itself or associated documentation, it is impossible to determine the exact nature of the food items. This could range from processed ingredients to finished food products for various uses, potentially including institutional or governmental feeding programs. Understanding the specific products is crucial for assessing value, quality, and relevance to the agency's mission.

How does the $120.1M contract value compare to historical spending on similar food manufacturing contracts by the Department of Agriculture?

To assess the $120.1M contract value against historical spending, one would need to analyze past awards for contracts with similar NAICS codes (e.g., 311999 or related food manufacturing categories) issued by the Department of Agriculture. A comparison would involve looking at the average contract value, the range of values, and the frequency of awards over several fiscal years. If this $120.1M award is significantly higher or lower than the historical average, it could indicate a change in procurement strategy, market conditions, or the scope of services required. Without access to historical spending data for this specific category, a definitive comparison cannot be made, but the value appears substantial for a single contract award.

What is the track record of Gold Star Foods, Inc. in fulfilling federal contracts, particularly those of similar size and scope?

Evaluating the track record of Gold Star Foods, Inc. requires accessing federal procurement databases (like FPDS or SAM.gov) to review their past contract awards and performance history. Key metrics to examine would include the number of contracts awarded, their total value, the types of goods/services provided, and any reported issues such as contract terminations, disputes, or negative past performance reviews. For a contract valued at $120.1M with 171 delivery orders, it is important to ascertain if the company has successfully managed projects of comparable scale and complexity, particularly within the food manufacturing or supply chain domain. A history of timely delivery, quality compliance, and adherence to contract terms would be positive indicators.

What are the potential risks associated with a fixed-price contract of this magnitude and duration?

A fixed-price contract of $120.1M, even with a relatively short duration (132 months from award to end date, though the period of performance is shorter), carries inherent risks. For the government, the primary risk is that the contractor may incur costs exceeding the fixed price, potentially leading to pressure for contract modifications or a decline in quality if the contractor seeks to recoup losses. Conversely, if the contractor significantly underestimates costs, they might prioritize speed or volume over quality to maximize profit. For the contractor, the risk lies in unforeseen cost increases due to market fluctuations (e.g., raw material prices), production issues, or changes in regulatory requirements, which could lead to financial losses if not adequately managed. The large number of delivery orders also introduces complexity in managing performance and ensuring consistent adherence to the fixed price across all transactions.

How does the 'All Other Miscellaneous Food Manufacturing' classification impact the analysis of this contract's value and performance?

The 'All Other Miscellaneous Food Manufacturing' classification (NAICS 311999) presents a challenge for detailed analytical comparison. This broad category aggregates diverse food products, making it difficult to benchmark pricing, assess specific quality standards, or identify direct competitors without more granular information. For instance, it could include anything from spices and seasonings to prepared meals or specialized ingredients. This lack of specificity means that the $120.1M value might represent a very different quantity or type of product compared to another contract within the same broad category. Consequently, assessing whether the government received 'good value for money' is more complex, requiring a deeper dive into the specific line items and specifications within the contract documentation.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 123J1421B0110/4100022298

Offers Received: 171

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Highview Capital, LLC

Address: 3781 E AIRPORT DR, ONTARIO, CA, 91761

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

Financial Breakdown

Contract Ceiling: $120,111,713

Exercised Options: $120,111,713

Current Obligation: $120,111,713

Actual Outlays: $114,663,621

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 123J1420G0231

IDV Type: BOA

Timeline