USDA awards $19.7M for canned fruit to Del Monte Foods, highlighting potential for price adjustments

Contract Overview

Contract Amount: $19,714,580 ($19.7M)

Contractor: DEL Monte Foods Corporation II Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-08-13

End Date: 2025-10-31

Contract Duration: 79 days

Daily Burn Rate: $249.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000010945/4400002424/4100032753/PEACHES CLING SLICES EX LT CAN-6/10,PEACHES CLING DICED EX LT CAN-6/10,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,PEARS HALVES EX LT CAN-6/10,MIXED FRUIT EX LT CAN-6/10

Place of Performance

Location: MODESTO, STANISLAUS County, CALIFORNIA, 95357

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $19.7 million to DEL MONTE FOODS CORPORATION II INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000010945/4400002424/4100032753/PEACHES CLING SLICES EX LT CAN-6/10,PEACHES CLING DICED EX LT CAN-6/10,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,PEARS HALVES EX LT CAN-6/10,MIXED FRUIT EX LT CAN-6/10 Key points: 1. Contract value of $19.7M for canned fruit products. 2. Awarded to Del Monte Foods Corporation II Inc. 3. Contract duration of 79 days. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type. 5. Competition level: Full and Open. 6. Delivery Order under a larger contract. 7. Products include various canned peaches, pears, and mixed fruit. 8. Geographic focus: California (ST: CA, SN: CALIFORNIA).

Value Assessment

Rating: fair

The contract value of $19.7 million for canned fruit products appears to be a standard procurement for government food donations. The FPEPA clause introduces a risk of price escalation, which needs careful monitoring. Benchmarking against similar large-scale food procurements would be necessary to fully assess value for money, especially considering the short delivery window.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 6 bidders (no) suggests a reasonably competitive environment for this type of commodity. This level of competition is generally favorable for price discovery and achieving market-based pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through vendor rivalry, ensuring the government receives competitive offers for its food donation needs.

Public Impact

Benefits recipients of USG food donation programs. Provides essential canned fruit products for nutritional support. Geographic impact primarily within California for delivery. Supports the agricultural and food processing sectors through procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic Price Adjustment clause could lead to increased costs beyond initial estimates.
Short contract duration (79 days) may limit long-term planning for the contractor.
Reliance on a single awardee for a significant quantity of food items.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Procurement supports vital food donation programs.
Contractor is a known entity in the food production market.

Sector Analysis

This contract falls within the broader food processing and agricultural sector, specifically canned goods. The market for government food procurement is substantial, with agencies like the USDA regularly purchasing commodities for domestic and international food assistance programs. This specific award for canned fruits is a routine part of maintaining stockpiles and fulfilling donation requirements.

Small Business Impact

The data does not indicate any specific small business set-aside or subcontracting requirements for this particular delivery order. As a large procurement, it is possible that larger prime contractors may engage small businesses for specific components or services, but this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract would typically fall under the Agricultural Marketing Service (AMS) of the USDA. Standard procurement regulations and contract management practices would apply. Transparency is generally maintained through public contract databases, though specific performance monitoring details are not provided.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement Contracts
Agricultural Marketing Service Contracts
Food and Nutrition Service Programs

Risk Flags

Potential for price escalation due to FPEPA clause.
Short contract duration may pose logistical challenges.
Reliance on a single awardee for a significant quantity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $19.7 million to DEL MONTE FOODS CORPORATION II INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000010945/4400002424/4100032753/PEACHES CLING SLICES EX LT CAN-6/10,PEACHES CLING DICED EX LT CAN-6/10,PEARS SLICES EX LT CAN-6/10,PEARS DICED EX LT CAN-6/10,PEARS HALVES EX LT CAN-6/10,MIXED FRUIT EX LT CAN-6/10

Who is the contractor on this award?

The obligated recipient is DEL MONTE FOODS CORPORATION II INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2025-08-13. End: 2025-10-31.

What is the historical spending pattern for similar canned fruit procurements by the USDA?

Analyzing historical spending for similar canned fruit procurements by the USDA would involve examining contract awards over the past several fiscal years. This would include looking at the total dollar amounts, the types of fruits procured (e.g., peaches, pears, mixed fruit), the quantities, the awardees, and the contract types (e.g., fixed-price, FPEPA). Trends in pricing, volume, and vendor concentration could be identified. For instance, if similar procurements in previous years were significantly lower in price or awarded to different vendors, it might raise questions about the current contract's value. Conversely, consistent spending patterns with the same vendors could indicate established relationships and reliable supply chains. Understanding these historical patterns is crucial for benchmarking the current $19.7 million award and assessing its cost-effectiveness over time.

How does the economic price adjustment (EPA) clause typically impact the final cost of such contracts?

The Economic Price Adjustment (EPA) clause in a contract allows for adjustments to the contract price based on fluctuations in specific economic factors, such as labor costs, material costs, or other indices. For this canned fruit procurement, the EPA could potentially increase the final cost if the prices of raw ingredients (like fruit), processing labor, or transportation rise significantly between the time of award and delivery. Conversely, if these costs decrease, the price could be adjusted downward. The risk for the government lies in the potential for cost overruns if market conditions are unfavorable. The specific indices and caps associated with the EPA clause in this contract would determine the extent of potential price changes and the level of risk to the government's budget. Careful monitoring of these indices is essential.

What is Del Monte Foods Corporation II Inc.'s track record with USDA food procurement contracts?

Del Monte Foods Corporation II Inc. has a history of supplying food products to government agencies, including the USDA. Their track record with USDA food procurement contracts would typically involve examining past awards, performance reviews, and any instances of contract disputes or quality issues. As a large, established food manufacturer, Del Monte likely has experience navigating the requirements of government solicitations and delivery schedules. Assessing their past performance on similar contracts, such as providing canned goods for food assistance programs or military rations, would provide insight into their reliability, quality control, and ability to meet contractual obligations. A review of their performance history would help determine if they are a consistently dependable supplier for the USDA.

What are the specific types and quantities of canned fruits being procured under this contract?

The provided data lists specific canned fruit products: 'PEACHES CLING SLICES EX LT CAN-6/10', 'PEACHES CLING DICED EX LT CAN-6/10', 'PEARS SLICES EX LT CAN-6/10', 'PEARS DICED EX LT CAN-6/10', 'PEARS HALVES EX LT CAN-6/10', and 'MIXED FRUIT EX LT CAN-6/10'. The '-6/10' likely refers to a specific can size (e.g., 6 cans per case, 10 oz per can, or a specific case configuration). While the exact quantities for each fruit type are not detailed in this summary, the total contract value of $19.7 million suggests a substantial volume. Understanding the precise breakdown of quantities per fruit type and can size is crucial for assessing the nutritional contribution and logistical planning for the food donation programs these items will support.

How does the 'Delivery Order' designation impact the overall contract structure and execution?

The designation 'Delivery Order' indicates that this contract is not a standalone award but rather a specific order placed against a previously established indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar master agreement. This means that the terms, conditions, and pricing structure were likely negotiated and finalized when the parent contract was awarded. The current award represents a specific call for a defined quantity of goods to be delivered within a set timeframe. This approach allows the government to procure goods or services as needed, often with pre-negotiated rates, streamlining the acquisition process for individual requirements. For the contractor, it signifies a confirmed order under an existing framework, but they must manage production and delivery to meet the specific requirements of this order.

Industry Classification

NAICS: Manufacturing › Fruit and Vegetable Preserving and Specialty Food Manufacturing › Fruit and Vegetable Canning

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1425B0359

Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 205 N WIGET LN, WALNUT CREEK, CA, 94598

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $19,714,580

Exercised Options: $19,714,580

Current Obligation: $19,714,580

Actual Outlays: $19,621,309

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0034

IDV Type: IDC

Timeline