Peterson Farms Inc. awarded $3.1M contract for applesauce cups, highlighting agricultural commodity procurement

Contract Overview

Contract Amount: $3,103,744 ($3.1M)

Contractor: Peterson Farms Inc

Awarding Agency: Department of Agriculture

Start Date: 2025-12-09

End Date: 2026-02-15

Contract Duration: 68 days

Daily Burn Rate: $45.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 13

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011074/4100033379/APPLESAUCE CUP-96/4.5

Place of Performance

Location: SHELBY, OCEANA County, MICHIGAN, 49455

State: Michigan Government Spending

Plain-Language Summary

Department of Agriculture obligated $3.1 million to PETERSON FARMS INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011074/4100033379/APPLESAUCE CUP-96/4.5 Key points: 1. Contract value of $3.1 million for applesauce cups indicates significant demand for shelf-stable food items. 2. The award to Peterson Farms Inc. suggests a competitive landscape for agricultural commodity suppliers. 3. Firm Fixed Price contract type mitigates cost escalation risks for the government. 4. The contract duration of 68 days points to a focused, short-term need for these specific food items. 5. Geographic focus on Michigan (ST: MI, SN: MICHIGAN) may reflect regional agricultural strengths or distribution networks.

Value Assessment

Rating: good

The contract value of $3.1 million for applesauce cups appears reasonable given the quantity and nature of the commodity. Benchmarking against similar government food procurement contracts for shelf-stable items would provide further context. The firm fixed price structure suggests a predictable cost outcome, which is generally favorable for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 13 bids (no: 13) suggests a healthy level of competition for this agricultural commodity. This broad competition is expected to drive competitive pricing and ensure the government receives a fair market value.

Taxpayer Impact: A competitive bidding process for food donations ensures taxpayer funds are used efficiently, securing the best possible prices for essential commodities.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USG food donation programs. The service delivered is the provision of 20,000,0011074/4100033379/APPLESAUCE CUP-96/4.5 units of applesauce cups. The geographic impact is primarily within the United States, supporting domestic food distribution networks. The contract supports the agricultural sector by providing a market for processed fruit products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions affecting delivery timelines.
Quality control of perishable or semi-perishable goods requires diligent oversight.

Positive Signals

Firm Fixed Price contract limits cost overruns.
Full and open competition suggests a competitive market and fair pricing.
Award to an established entity like Peterson Farms Inc. may indicate reliability.

Sector Analysis

This contract falls within the broader food manufacturing and agricultural commodities sector. The market for processed fruits and vegetables is substantial, driven by both commercial and government demand. Government procurement, particularly for food donations and military rations, represents a significant segment. Comparable spending benchmarks would involve analyzing other contracts for canned or cup-based fruit products procured by agencies like USDA or DoD.

Small Business Impact

This contract does not appear to have a small business set-aside (sb: false). There is no explicit information regarding subcontracting plans for small businesses. The focus on a large commodity purchase may not directly benefit the small business ecosystem unless Peterson Farms Inc. utilizes small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would likely fall under the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is generally maintained through federal contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USG Food Donation Programs
Agricultural Commodity Procurement
Department of Agriculture Food Contracts
Shelf-Stable Food Supplies

Risk Flags

Short contract duration may require expedited logistics.
Potential need for robust quality control on perishable goods.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $3.1 million to PETERSON FARMS INC. COMMODITIES FOR USG FOOD DONATIONS: 2000011074/4100033379/APPLESAUCE CUP-96/4.5

Who is the contractor on this award?

The obligated recipient is PETERSON FARMS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.1 million.

What is the period of performance?

Start: 2025-12-09. End: 2026-02-15.

What is the historical spending pattern for applesauce cups or similar fruit products by the Department of Agriculture?

Analyzing historical spending data for applesauce cups and comparable fruit products by the Department of Agriculture (USDA) is crucial for understanding long-term trends and identifying potential anomalies. While specific data for applesauce cups alone is not readily available without deeper database queries, USDA's Agricultural Marketing Service (AMS) frequently procures processed fruits and vegetables for various programs, including food donations and school lunch programs. Past contracts have varied in size and duration, influenced by factors such as crop yields, commodity prices, and program needs. For instance, contracts for canned peaches, pears, or fruit cocktail often show fluctuations tied to harvest seasons and surplus availability. The current contract's value of $3.1 million for applesauce cups should be compared against the average value and volume of similar fruit procurements over the last 3-5 fiscal years to assess if it represents a typical, increased, or decreased level of spending. This historical context helps determine if the current procurement is part of a consistent demand or an exceptional event.

How does the per-unit cost of these applesauce cups compare to commercial retail prices or other government contracts?

Determining the precise per-unit cost requires dividing the total contract value ($3,103,744) by the total number of units procured. The data indicates 20,000,0011074/4100033379/APPLESAUCE CUP-96/4.5 units, which appears to be a coded representation rather than a clear quantity. Assuming 'APPLESAUCE CUP-96/4.5' refers to a specific packaging size (e.g., 96 cups per case, 4.5 oz per cup), a precise per-unit calculation is challenging without clarification. However, if we interpret the '4.5' as the unit size (e.g., 4.5 oz), and assume a standard case quantity, we could estimate. For example, if a case contains 24 cups of 4.5 oz each, and the contract is for a large number of cases, the per-cup cost could be calculated. Generally, government contracts aim for prices at or below commercial bulk rates, considering the large volumes purchased. Comparing this calculated per-unit cost to average retail prices for similar applesauce cups (e.g., via online grocery platforms) and to per-unit costs from other federal food procurement contracts would reveal the value proposition. Deviations significantly above or below market rates would warrant further investigation into contract specifics and market conditions.

What are the specific quality assurance and inspection protocols for the applesauce cups under this contract?

The contract specifies 'Fruit and Vegetable Canning' (NA: 311421) and is awarded by the Agricultural Marketing Service (AMS), suggesting adherence to established food safety and quality standards. While the provided data doesn't detail the specific inspection protocols, government food contracts typically incorporate stringent quality assurance measures. These often include requirements for compliance with FDA regulations, USDA's Food Safety and Inspection Service (FSIS) standards, and specific product specifications outlined in the contract's Statement of Work (SOW). Inspections may occur at the manufacturing facility prior to shipment, upon receipt at government distribution points, and potentially through random sampling and testing. Key quality parameters would likely include ingredient sourcing, processing methods, packaging integrity, shelf-life testing, nutritional content, and absence of contaminants. Peterson Farms Inc. would be required to provide documentation such as Certificates of Analysis (COAs) and adhere to Good Manufacturing Practices (GMPs). Failure to meet these standards could result in contract non-compliance, rejection of goods, and potential penalties.

What is the track record of Peterson Farms Inc. in fulfilling government contracts, particularly for food commodities?

Peterson Farms Inc. has a history of engaging in government contracting, as indicated by this award. To assess their track record thoroughly, one would need to examine their past performance on similar contracts, particularly those involving the USDA or other agencies procuring food commodities. Key aspects to review include on-time delivery rates, adherence to product specifications, quality compliance, and any history of contract disputes, terminations, or performance issues. Databases like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) can provide insights into past performance evaluations. A positive track record suggests reliability and capability in meeting government requirements, while a history of issues might indicate potential risks. Given this is a 'Definitive Contract' (AW: DEFINITIVE CONTRACT), it implies a pre-existing relationship or a structured procurement process where contractor past performance is likely a consideration. Further investigation into CPARS reports, if available, would offer a more granular view of their performance history.

What are the implications of the contract duration (68 days) on the supply chain and potential for spoilage?

The relatively short contract duration of 68 days (dur: 68) suggests a specific, immediate need for the applesauce cups, possibly tied to a particular event, seasonal demand, or a gap in existing supplies for food donation programs. This short timeframe implies a need for rapid production and delivery by Peterson Farms Inc. From a supply chain perspective, it necessitates efficient logistics and potentially expedited manufacturing processes. For the government, it means the product needs to be utilized or distributed relatively quickly after receipt to maximize its shelf life. Applesauce cups, being shelf-stable, generally have a long expiration date (often 1-2 years or more when properly stored), so a 68-day delivery window does not inherently pose a high risk of spoilage upon receipt. However, it does mean that the subsequent distribution and consumption phases must align with this timeline to ensure the food reaches beneficiaries before its expiration. The short duration might also indicate that this is not a long-term, steady-state requirement but rather a tactical procurement.

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: SEALED BID

Solicitation ID: 123J1426B0051

Offers Received: 13

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3104 W BASELINE RD, SHELBY, MI, 49455

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: $3,103,744

Exercised Options: $3,103,744

Current Obligation: $3,103,744

Actual Outlays: $2,738,201

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline