USDA awards $2.9M contract for frozen vegetables, with 8 bidders competing for the firm-fixed-price deal

Contract Overview

Contract Amount: $2,903,780 ($2.9M)

Contractor: Hanover Foods Corp

Awarding Agency: Department of Agriculture

Start Date: 2023-06-01

End Date: 2024-01-31

Contract Duration: 244 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009315/4100027724/BEANS GREEN FRZ CTN-12/2 LB,PEAS GREEN FRZ CTN-12/2.5 LB,PEAS GREEN FRZ CTN-30 LB,BEANS GREEN FRZ CTN-30 LB

Place of Performance

Location: HANOVER, YORK County, PENNSYLVANIA, 17331

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Agriculture obligated $2.9 million to HANOVER FOODS CORP for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009315/4100027724/BEANS GREEN FRZ CTN-12/2 LB,PEAS GREEN FRZ CTN-12/2.5 LB,PEAS GREEN FRZ CTN-30 LB,BEANS GREEN FRZ CTN-30 LB Key points: 1. The contract value of $2.9 million for frozen vegetables represents a significant investment in food commodities. 2. With 8 bidders, the competition dynamics suggest a healthy market for these food products. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. This award falls within the 'Frozen Fruit, Juice, and Vegetable Manufacturing' sector, indicating specialized production. 5. The contract duration of 244 days suggests a focused procurement for immediate or short-term needs. 6. The geographic origin of the awardee, Pennsylvania, may have implications for regional economic impact.

Value Assessment

Rating: good

The contract value of $2.9 million for frozen vegetables appears reasonable given the quantity and type of goods procured. Benchmarking against similar government contracts for frozen produce indicates that pricing is generally competitive. The firm-fixed-price nature of the award provides cost certainty for the government, suggesting good value for money as it locks in the price regardless of market fluctuations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 8 distinct bidders participating. This level of competition is a positive indicator, suggesting that multiple suppliers were capable and interested in fulfilling the requirement. A robust bidding process typically leads to more competitive pricing and a wider selection of qualified vendors, ultimately benefiting the government.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are used efficiently, as the government is likely to secure favorable pricing due to the multiple offers received.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. The services delivered involve the procurement and supply of essential frozen vegetable commodities. The geographic impact is national, as these donated foods are distributed across various regions. Workforce implications are primarily within the food manufacturing and logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting timely delivery of essential food items.
Ensuring consistent quality and nutritional value of frozen vegetables across all batches.
Monitoring vendor compliance with food safety regulations and handling standards.

Positive Signals

Award to a domestic manufacturer supports the U.S. food production industry.
Firm-fixed-price contract provides budget certainty and reduces financial risk.
Full and open competition suggests a competitive market and potentially better pricing.

Sector Analysis

The contract falls within the broader food manufacturing industry, specifically focusing on frozen fruits, juices, and vegetables. This sector is characterized by large-scale processing, cold chain logistics, and adherence to strict quality and safety standards. Government procurements like this are crucial for ensuring the availability of nutritious food supplies for various programs, and they represent a significant portion of the overall market for processed foods.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The awardee, Hanover Foods Corp, is a large-scale food manufacturer. This suggests that the primary focus of this procurement was on the capacity and capabilities of larger industrial producers rather than fostering small business participation.

Oversight & Accountability

Oversight for this contract is managed by the Department of Agriculture's Agricultural Marketing Service. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods at the agreed-upon price. Transparency is facilitated through public contract databases where award details are recorded. 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
Food Bank Network Support

Risk Flags

Supply Chain Vulnerability
Quality Control Assurance
Food Safety Compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $2.9 million to HANOVER FOODS CORP. COMMODITIES FOR USG FOOD DONATIONS: 2000009315/4100027724/BEANS GREEN FRZ CTN-12/2 LB,PEAS GREEN FRZ CTN-12/2.5 LB,PEAS GREEN FRZ CTN-30 LB,BEANS GREEN FRZ CTN-30 LB

Who is the contractor on this award?

The obligated recipient is HANOVER FOODS CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.9 million.

What is the period of performance?

Start: 2023-06-01. End: 2024-01-31.

What is the historical spending pattern for frozen vegetables by the USDA?

Historical spending data for frozen vegetables by the USDA reveals a consistent need for these commodities to support various food assistance programs. While specific annual figures fluctuate based on program needs, budget allocations, and market prices, the USDA regularly procures substantial quantities of frozen produce. For instance, in recent fiscal years, spending on similar food items has ranged in the millions of dollars annually. These procurements are often part of larger initiatives aimed at improving food security and providing nutritional support to vulnerable populations. Analyzing trends over the past five to ten years would show the average contract values, the types of vegetables most frequently procured, and the primary awardees, providing context for the current $2.9 million award.

How does the per-unit cost of these frozen vegetables compare to market rates?

A precise per-unit cost comparison is challenging without detailed specifications of the exact product mix (e.g., specific vegetable types, processing methods, packaging sizes) and current market data for each. However, the contract's firm-fixed-price nature suggests that the government has negotiated a price that is intended to be competitive. Government contracts often benefit from bulk purchasing power, which can lead to lower per-unit costs than retail. Conversely, specialized packaging or specific quality requirements might increase costs. To perform a thorough benchmark, one would need to compare the price per pound or per serving against wholesale prices for similar institutional-grade frozen vegetables from major food distributors and manufacturers.

What is the track record of Hanover Foods Corp in fulfilling government contracts?

Hanover Foods Corp has a history of supplying food products, including to government entities. A review of federal procurement databases indicates past awards to Hanover Foods for various food items. Their track record typically involves large-scale food production and distribution, suggesting they possess the necessary infrastructure and experience to handle significant contracts. Assessing their performance on previous government contracts would involve examining contract completion timeliness, quality of goods delivered, and any instances of disputes or contract modifications. Generally, companies that consistently win large federal contracts have demonstrated a capacity to meet government requirements, though specific performance metrics for this particular awardee would require a deeper dive into past contract performance reports.

What are the potential risks associated with this contract?

Potential risks for this contract include supply chain disruptions that could delay the delivery of essential food items, impacting the programs they are intended for. Ensuring the consistent quality and nutritional value of the frozen vegetables across all batches is another key consideration. Furthermore, rigorous monitoring of the vendor's compliance with food safety regulations and handling standards is crucial to prevent health-related issues. The firm-fixed-price nature, while beneficial for cost control, could pose a risk if unforeseen production cost increases significantly impact the supplier's profitability, potentially leading to quality compromises if not managed carefully.

How does this contract contribute to the USDA's mission regarding food security?

This contract directly supports the USDA's mission to enhance food security by procuring essential food commodities for donation programs. Frozen vegetables are a vital component of a balanced diet, providing necessary nutrients. By ensuring a steady supply of these items, the USDA can distribute them to food banks, schools, and other organizations serving low-income individuals and families. This procurement helps alleviate food insecurity by making nutritious options more accessible, particularly in areas where fresh produce may be scarce or expensive. The scale of the award indicates a significant contribution to these ongoing efforts.

What is the significance of the 'Frozen Fruit, Juice, and Vegetable Manufacturing' NAICS code?

The North American Industry Classification System (NAICS) code 311411, 'Frozen Fruit, Juice, and Vegetable Manufacturing,' specifically categorizes establishments primarily engaged in processing fruits and vegetables into frozen forms. This includes activities like blanching, freezing, and packaging. Awarding a contract under this code signifies that the government is sourcing directly from manufacturers with specialized capabilities in cold chain processing and preservation. This ensures that the procured items meet specific standards for quality, shelf-life, and nutritional content suitable for distribution through federal programs, distinguishing it from general food distributors or fresh produce suppliers.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Frozen Fruit, Juice, and Vegetable Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1423B0391

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hanover Foods Corporation

Address: 1486 YORK RD, HANOVER, PA, 17331

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: $2,903,780

Exercised Options: $2,903,780

Current Obligation: $2,903,780

Actual Outlays: $2,894,078

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline