USDA awards $10.9M for fresh grapes, highlighting perishable food manufacturing needs

Contract Overview

Contract Amount: $10,925,387 ($10.9M)

Contractor: Fruta Royal, LLC

Awarding Agency: Department of Agriculture

Start Date: 2023-06-16

End Date: 2023-12-13

Contract Duration: 180 days

Daily Burn Rate: $60.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 14

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000009336/4100027854/GRAPES VARIETY FRESH CTN-19 LB

Place of Performance

Location: LINDSAY, TULARE County, CALIFORNIA, 93247

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $10.9 million to FRUTA ROYAL, LLC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000009336/4100027854/GRAPES VARIETY FRESH CTN-19 LB Key points: 1. Contract value of $10.9M for fresh grapes indicates significant demand for specific food commodities. 2. The award to FRUTA ROYAL, LLC suggests a concentrated market for this specialized agricultural product. 3. A 180-day duration for perishable goods points to the urgency and logistical challenges in food supply. 4. The contract's focus on fresh produce underscores the importance of maintaining supply chains for nutritious food. 5. This award falls under the Agricultural Marketing Service, indicating a role in market stabilization or support. 6. The use of a Firm Fixed Price contract aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $10.9M for 200,000 cases of fresh grapes appears reasonable given the commodity and market conditions. Benchmarking against similar large-scale food donation contracts is challenging due to the specificity of the item. However, the price per pound or per case would be the key metric for detailed value assessment. The firm fixed price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was open, there might have been prior exclusions or specific criteria that narrowed the initial pool. The presence of 14 bidders suggests a reasonably competitive environment for this specific agricultural commodity.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging cost-effective solutions.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USG food donation programs. The service delivered is the provision of fresh grapes, a nutritious food item. The geographic impact is likely national, as donated food is distributed across various regions. Workforce implications include jobs in agriculture, harvesting, packaging, and logistics for FRUTA ROYAL, LLC and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Perishability risk: Ensuring timely delivery and quality of fresh grapes over 180 days.
Supply chain disruption: Potential for weather or other agricultural issues impacting grape availability.
Price volatility: Fluctuations in fresh produce markets could affect the value proposition over time.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Multiple bidders (14) indicate a healthy level of interest and potential for competitive pricing.
Award to a specific company suggests established capabilities in sourcing and delivering fresh produce.

Sector Analysis

This contract falls within the broader agricultural and food distribution sector. The market for large-scale procurement of fresh produce for government programs is specialized, often involving specific certifications and logistical capabilities. Comparable spending benchmarks would relate to other large commodity procurements for food banks or disaster relief efforts, but the specific item (fresh grapes) makes direct comparison difficult.

Small Business Impact

The contract was awarded to FRUTA ROYAL, LLC, and there is no indication of a small business set-aside (sb: false). The size of this contract suggests it is likely handled by a larger entity, but subcontracting opportunities for smaller businesses in harvesting, transportation, or distribution are possible, though not explicitly detailed in the provided data.

Oversight & Accountability

Oversight is likely managed by the Department of Agriculture's Agricultural Marketing Service. Accountability measures would include adherence to contract specifications, delivery schedules, and quality standards. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are not provided.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Contracts
Agricultural Marketing Service Contracts
Perishable Food Supply Chain Management

Risk Flags

Perishability Risk
Supply Chain Vulnerability
Potential for Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $10.9 million to FRUTA ROYAL, LLC. COMMODITIES FOR USG FOOD DONATIONS: 2000009336/4100027854/GRAPES VARIETY FRESH CTN-19 LB

Who is the contractor on this award?

The obligated recipient is FRUTA ROYAL, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2023-06-16. End: 2023-12-13.

What is the historical spending pattern for fresh grape procurement by the USDA or similar agencies?

Historical spending data for specific fresh produce like grapes procured by the USDA for donation programs is not readily available in aggregated public databases. However, agencies like the USDA's Agricultural Marketing Service (AMS) do engage in regular procurement of various commodities to support domestic food assistance programs, such as the Food Purchase and Distribution Program. These procurements fluctuate based on agricultural output, program needs, and available funding. Analyzing past solicitations and awards for similar perishable goods can provide context, but direct historical grape procurement figures would require deeper research into specific program archives or contract databases.

How does the price per pound of grapes in this contract compare to average market prices?

To compare the price per pound, we need to estimate the total weight procured. The data mentions '2000009336/4100027854/GRAPES VARIETY FRESH CTN-19 LB'. Assuming 'CTN-19 LB' refers to 19-pound cartons, the total weight would be approximately 3.8 million pounds (200,000 cartons * 19 lbs/carton). With a contract value of $10,925,387.44, the price per pound is roughly $2.87. Average market prices for fresh grapes can vary significantly by season, variety, and region, but this price appears to be on the higher end compared to typical wholesale or retail prices, potentially reflecting the costs associated with large-scale, specific sourcing, quality control, and delivery requirements for a government contract.

What are the specific quality standards required for the fresh grapes under this contract?

The provided data does not detail the specific quality standards for the fresh grapes. However, for government food donation contracts, especially those involving perishable items, quality standards are typically stringent. They often align with or exceed USDA Grade standards for fresh fruits and vegetables. Requirements usually include specifications on size, color, firmness, absence of defects (bruising, decay, mold), and packaging integrity. The contract likely specifies acceptable varieties and maturity levels to ensure nutritional value and shelf-life post-delivery.

What is the track record of FRUTA ROYAL, LLC in fulfilling government contracts, particularly for perishable goods?

Information regarding FRUTA ROYAL, LLC's specific track record with government contracts, especially for perishable goods, is not detailed in the provided data snippet. A comprehensive assessment would require searching federal procurement databases like SAM.gov or FPDS for past performance records, contract awards, and any reported issues or successes. Companies involved in large-scale agricultural commodity procurement often have established supply chains and experience, but their specific history with government agencies like the USDA would need independent verification.

What are the logistical challenges associated with delivering 200,000 cartons of fresh grapes within a 180-day period?

Delivering 200,000 cartons (approximately 3.8 million pounds) of fresh grapes within 180 days presents significant logistical challenges. These include maintaining a consistent cold chain to prevent spoilage, coordinating transportation (likely refrigerated trucks) to meet delivery schedules, managing inventory to avoid overstocking or stockouts at distribution points, and ensuring compliance with food safety regulations throughout transit. The short shelf-life of fresh grapes necessitates efficient routing and rapid distribution, potentially requiring multiple distribution hubs and careful demand forecasting across the recipient network.

Industry Classification

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

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1423B0409

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 724 N ELKO ST, VISALIA, CA, 93291

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,925,387

Exercised Options: $10,925,387

Current Obligation: $10,925,387

Actual Outlays: $10,925,356

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline