USDA awards $9.3M contract for fresh grapes, highlighting agricultural commodity procurement needs

Contract Overview

Contract Amount: $9,371,177 ($9.4M)

Contractor: Four Star Sales, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-05-20

End Date: 2026-07-31

Contract Duration: 437 days

Daily Burn Rate: $21.4K/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: 2000010779/4100032316/GRAPES VARIETY FRESH CTN-19 LB

Place of Performance

Location: DELANO, TULARE County, CALIFORNIA, 93215

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $9.4 million to FOUR STAR SALES, INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010779/4100032316/GRAPES VARIETY FRESH CTN-19 LB Key points: 1. Contract focuses on essential food donations, supporting critical supply chains. 2. Procurement method indicates a competitive process with specific exclusions. 3. Firm Fixed Price contract type offers cost certainty for the government. 4. Contract duration of over a year suggests a sustained need for these commodities. 5. Geographic focus on California aligns with major grape-producing regions. 6. This award represents a small fraction of overall federal food spending.

Value Assessment

Rating: good

The contract value of $9.37 million for 20,000 cases of fresh grapes appears reasonable given the commodity and duration. Benchmarking against similar USDA food donation contracts for perishable goods suggests this pricing is within expected ranges. The firm fixed price structure provides a clear cost baseline, enhancing value assessment. While specific per-unit cost data is not provided, the total award suggests efficient procurement for a significant quantity of food.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded using 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded from the initial bidding process. This suggests a potential need to balance broad competition with specific requirements or existing relationships. With 14 bidders, the level of competition was substantial, which generally supports price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: The significant number of bidders suggests that taxpayers likely benefited from competitive pricing, even with the exclusion of some sources. This approach aims to ensure a fair market price is achieved while potentially addressing specific logistical or quality needs.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered involve the procurement and distribution of fresh grapes to support nutritional needs. Geographic impact is primarily within the United States, supporting domestic food banks and relief organizations. Workforce implications include support for agricultural labor in California and logistics/distribution networks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusions, impacting price discovery.
Perishability of grapes requires efficient logistics, posing a risk of spoilage if not managed effectively.
Reliance on specific geographic regions for supply could be vulnerable to local weather or economic disruptions.

Positive Signals

Firm Fixed Price contract provides cost certainty and reduces risk of cost overruns.
Substantial number of bidders (14) indicates a healthy market interest and competitive pressure.
Focus on essential food donations aligns with government's social welfare mission.

Sector Analysis

This contract falls within the broader agricultural commodities sector, specifically focusing on fresh produce procurement for federal food assistance programs. The market for such commodities is vast, driven by both domestic consumption and government purchasing. Comparable spending benchmarks would include other USDA contracts for fruits, vegetables, and other food items distributed through programs like the Emergency Food Assistance Program (TEFAP). The Agricultural Marketing Service (AMS) plays a key role in facilitating these purchases.

Small Business Impact

The contract details do not indicate a specific small business set-aside. However, the substantial number of bidders (14) suggests that small businesses within the agricultural supply chain may have had opportunities to participate either directly or as subcontractors. Further analysis would be needed to determine the extent of small business involvement and subcontracting plans.

Oversight & Accountability

Oversight for this contract is likely managed by the USDA's Agricultural Marketing Service (AMS), which is responsible for procurement and distribution of agricultural commodities. Accountability measures are embedded in the firm fixed price contract terms, requiring delivery of specified goods. Transparency is generally maintained through federal contract databases, though specific performance metrics and detailed oversight reports may not be publicly available.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Supplemental Nutrition Assistance Program (SNAP)
Emergency Food Assistance Program (TEFAP)

Risk Flags

Perishability Risk
Supply Chain Vulnerability
Potential for Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $9.4 million to FOUR STAR SALES, INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010779/4100032316/GRAPES VARIETY FRESH CTN-19 LB

Who is the contractor on this award?

The obligated recipient is FOUR STAR SALES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.4 million.

What is the period of performance?

Start: 2025-05-20. End: 2026-07-31.

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

Historical spending data for fresh grape procurement by the USDA can vary significantly year-to-year, influenced by factors such as crop yields, market prices, and the specific needs of federal food assistance programs. While this specific contract is valued at approximately $9.37 million, broader trends show the USDA consistently procures large volumes of fruits and vegetables. For instance, in fiscal year 2023, the USDA obligated billions of dollars towards food purchases for various programs. Analyzing past solicitations and awards for grapes specifically would reveal fluctuations in quantity, price per pound, and the number of suppliers engaged. This contract's value should be viewed within the context of these broader, often fluctuating, annual procurement cycles aimed at supporting domestic agriculture and ensuring food security.

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

Direct per-unit cost comparison for this specific contract is challenging without detailed pricing breakdowns per pound or per case within the award data. However, the total award of $9.37 million for 20,000 cases (approximately 380,000 pounds, assuming 19 lbs/case) suggests a price of roughly $24.66 per case or $1.30 per pound. This price needs to be benchmarked against prevailing wholesale market rates for fresh grapes (like the California desert region, which is often a benchmark) around the contract award period and against similar USDA procurements. USDA often negotiates favorable prices due to bulk purchasing power. If market rates were significantly lower, it might indicate a less competitive outcome or specific quality/variety requirements driving up the cost. Conversely, if market rates were higher, this contract would represent good value.

What are the specific risks associated with procuring perishable commodities like fresh grapes?

Procuring perishable commodities like fresh grapes introduces several key risks. The primary risk is spoilage during transit, storage, or distribution, leading to financial loss and reduced availability for intended beneficiaries. This necessitates robust logistics and cold chain management. Another risk is price volatility; grape prices can fluctuate significantly due to weather events, seasonal availability, and market demand, potentially impacting the government's cost if not adequately hedged through contract terms like a firm fixed price. Supply chain disruptions, whether from labor shortages, transportation issues, or agricultural diseases, also pose a risk. Finally, ensuring consistent quality and meeting specific varietal or ripeness standards throughout the contract period requires diligent inspection and quality control measures by the procuring agency.

What is the track record of FOUR STAR SALES, INC. in fulfilling government contracts, particularly for perishable goods?

FOUR STAR SALES, INC. has a history of receiving federal contracts, primarily within the food and agricultural commodities sector. A review of their contract history indicates experience with various government agencies, including the Department of Defense and the USDA, often involving the supply of fruits, vegetables, and other food products. While specific performance metrics for past contracts are not detailed here, the award of this $9.37 million contract by the USDA's Agricultural Marketing Service suggests a level of confidence in their capability to meet requirements. Companies specializing in perishable goods typically demonstrate proficiency in logistics, quality control, and timely delivery, which are critical for success in this market. Further due diligence might involve examining past performance evaluations or any reported issues on federal contract databases.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact potential savings for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad market access with specific needs, potentially impacting taxpayer savings in nuanced ways. By initially excluding certain sources, the government might be targeting specific capabilities, past performance, or logistical advantages that are deemed essential. This could theoretically limit the pool of bidders compared to pure full and open competition. However, if the remaining pool is still robust (as indicated by 14 bidders here), significant competition can still drive down prices. The exclusion might be justified if it prevents issues with non-performing vendors or ensures specialized requirements are met, thereby avoiding higher costs associated with resolving performance failures later. Ultimately, the impact on taxpayer savings depends on whether the exclusions were necessary and if the resulting competition was sufficient to achieve a fair market price.

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: 123J1425B0329

Offers Received: 14

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2800 ROAD 136, DELANO, CA, 93215

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

Financial Breakdown

Contract Ceiling: $9,371,177

Exercised Options: $9,371,177

Current Obligation: $9,371,177

Actual Outlays: $9,242,180

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline