USDA awards $2M contract for vegetable oil to INCOBRASA INDUSTRIES LTD, highlighting potential value in food donation commodities

Contract Overview

Contract Amount: $2,053,054 ($2.1M)

Contractor: Incobrasa Industries Ltd

Awarding Agency: Department of Agriculture

Start Date: 2025-12-04

End Date: 2026-03-31

Contract Duration: 117 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011042/4100033242/OIL VEGETABLE BTL-9/48 OZ,OIL VEGETABLE BTL-6/1 GAL

Place of Performance

Location: GILMAN, IROQUOIS County, ILLINOIS, 60938

State: Illinois Government Spending

Plain-Language Summary

Department of Agriculture obligated $2.1 million to INCOBRASA INDUSTRIES LTD for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011042/4100033242/OIL VEGETABLE BTL-9/48 OZ,OIL VEGETABLE BTL-6/1 GAL Key points: 1. Contract value appears reasonable given the quantity and type of goods specified. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Contract duration of 117 days indicates a short-term need for these commodities. 4. Firm fixed price contract type mitigates cost overrun risks for the government. 5. The contract supports the government's food donation programs, impacting food security initiatives. 6. Geographic focus on Illinois for delivery suggests localized distribution needs.

Value Assessment

Rating: good

The contract value of approximately $2.05 million for 20,000 units of vegetable oil (bottled) seems aligned with market rates for bulk food commodities. While specific per-unit cost comparisons are not readily available without more granular data, the total award is within a plausible range for supporting federal food donation programs. The firm fixed price structure further enhances value by locking in costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 4 bids received, the competition level suggests a healthy market interest for supplying these food commodities. This level of competition is generally favorable for achieving competitive pricing and ensuring the government receives fair market value.

Taxpayer Impact: Full and open competition with multiple bidders typically leads to more favorable pricing for taxpayers, as it encourages vendors to offer their best prices to secure the contract.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. Services delivered involve the procurement and supply of essential cooking oil for distribution. Geographic impact is concentrated in Illinois, where the commodities are to be delivered. Workforce implications are primarily within the supply chain and logistics sectors involved in food distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting timely delivery of essential food items.
Dependence on a single supplier for a critical commodity could pose a risk if issues arise with INCOBRASA INDUSTRIES LTD.

Positive Signals

Successful award through full and open competition indicates a robust bidding process.
Firm fixed price contract provides cost certainty and protects against inflation.
Contract supports vital federal food donation programs, addressing food insecurity.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically focusing on edible oils. The market for vegetable oil is large and competitive, with numerous domestic and international suppliers. This award represents a small portion of the overall federal spending on agricultural commodities and food assistance programs, which are critical components of the agricultural economy.

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 nature of commodity procurement, larger suppliers may be more likely to bid, but the full and open competition allows for participation from all eligible entities, including small businesses if they meet the requirements.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Agricultural Marketing Service (AMS) within the USDA is responsible for managing and overseeing this contract. Transparency is maintained through public contract databases. Any issues or concerns would likely be handled through contractual dispute resolution processes and potentially reviewed by the USDA's Office of Inspector General.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement
Agricultural Marketing Service Contracts
Food Assistance Programs

Risk Flags

Potential for supply chain disruptions
Quality control of delivered goods
Price competitiveness over contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $2.1 million to INCOBRASA INDUSTRIES LTD. COMMODITIES FOR USG FOOD DONATIONS: 2000011042/4100033242/OIL VEGETABLE BTL-9/48 OZ,OIL VEGETABLE BTL-6/1 GAL

Who is the contractor on this award?

The obligated recipient is INCOBRASA INDUSTRIES LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.1 million.

What is the period of performance?

Start: 2025-12-04. End: 2026-03-31.

What is the track record of INCOBRASA INDUSTRIES LTD in fulfilling federal contracts, particularly for food commodities?

Information regarding INCOBRASA INDUSTRIES LTD's specific track record with federal contracts, especially for food commodities, is not detailed in the provided data. A comprehensive review would require accessing federal procurement databases like SAM.gov or FPDS to analyze past performance, contract history, and any reported issues or successes. Understanding their experience with similar items (e.g., edible oils, bulk food items) and their ability to meet delivery schedules and quality standards would be crucial for assessing reliability.

How does the per-unit cost of the vegetable oil in this contract compare to historical USDA purchases or other government agency procurements?

The provided data does not include a specific per-unit cost breakdown, only the total award amount and quantity. To compare, one would need to calculate the implied per-unit cost (Total Award / Total Units) and then benchmark this against historical data for similar USDA food donation contracts or procurements by other agencies like the Defense Logistics Agency (DLA) or GSA. Factors such as oil type, packaging, delivery location, and market fluctuations would need to be considered for a fair comparison. Without this granular data, a precise value-for-money assessment on a per-unit basis is challenging.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential supply chain disruptions affecting timely delivery, quality control issues with the vegetable oil, and price volatility if the firm fixed price was set too high or too low relative to market conditions at the time of award. Mitigation strategies are inherent in the contract type: the firm fixed price locks in costs for the government, reducing budget uncertainty. The USDA's oversight and quality assurance processes are designed to address quality concerns. The selection of a vendor through full and open competition also aims to reduce the risk of selecting an unqualified or unreliable supplier.

How effective are USDA's food donation programs in achieving their objectives, and how does this contract contribute to that effectiveness?

The effectiveness of USDA's food donation programs is typically measured by metrics such as the quantity of food distributed, the number of individuals or households served, and the impact on reducing food insecurity. This contract directly contributes by ensuring the availability of a key commodity (vegetable oil) for these programs. The success of the program hinges on efficient procurement, reliable distribution, and the nutritional value of the donated foods. This specific contract supports the operational aspect by securing a necessary ingredient for meals provided to beneficiaries.

What are the historical spending patterns for vegetable oil or similar cooking oils within USDA's food donation or procurement activities?

Historical spending patterns for vegetable oil within USDA's food donation activities would likely show fluctuations based on program needs, commodity availability, and overall budget allocations. Analyzing past solicitations and awards for similar items would reveal trends in contract values, quantities purchased, and the number of bidders over time. This contract's value of $2.05 million provides a data point for current spending levels. Understanding these patterns helps in forecasting future needs and budgeting appropriately for these essential food items.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Fats and Oils Refining and Blending

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0022

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 540 E US HIGHWAY 24, GILMAN, IL, 60938

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

Financial Breakdown

Contract Ceiling: $2,053,054

Exercised Options: $2,053,054

Current Obligation: $2,053,054

Actual Outlays: $1,140,210

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline