USDA awards $496K contract for skim milk to GH Dairy, highlighting fluid milk manufacturing needs

Contract Overview

Contract Amount: $49,640 ($49.6K)

Contractor: GH Dairy

Awarding Agency: Department of Agriculture

Start Date: 2026-02-03

End Date: 2026-06-24

Contract Duration: 141 days

Daily Burn Rate: $352/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 18

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011152/4100033671/MILK SKIM FRESH CTR # 128 FL OZ

Place of Performance

Location: YUMA, YUMA County, ARIZONA, 85365

State: Arizona Government Spending

Plain-Language Summary

Department of Agriculture obligated $49,640.4 to GH DAIRY for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011152/4100033671/MILK SKIM FRESH CTR # 128 FL OZ Key points: 1. Contract value appears reasonable for the specified quantity and duration. 2. Full and open competition suggests a competitive bidding process. 3. Potential risk indicators include the short performance period and limited scope. 4. This contract supports domestic food donation programs. 5. GH Dairy is positioned as a supplier within the fluid milk manufacturing sector.

Value Assessment

Rating: good

The contract value of $496,404.00 for skim milk over approximately 4.7 months appears to be within a reasonable range for government food donation commodities. Benchmarking against similar contracts for bulk fluid milk would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overruns for the government.

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 a bid. The number of bidders (18) suggests a healthy level of interest and competition for this requirement, which generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. The service delivered is the provision of skim milk, a key nutritional commodity. The geographic impact is primarily within Arizona, where the supplier is located. Workforce implications are minimal, likely involving GH Dairy's existing production and distribution staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration may limit long-term supplier relationships.
Dependence on a single commodity could be a vulnerability if supply chains are disrupted.

Positive Signals

Supports critical food donation programs, addressing food insecurity.
Firm fixed-price contract provides cost certainty.
Full and open competition indicates a robust procurement process.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically focusing on dairy products. The market for government food procurement is substantial, with agencies like the USDA regularly sourcing commodities to support various domestic and international programs. Comparable spending benchmarks would involve analyzing other USDA contracts for similar dairy products or food assistance commodities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity or that small business participation was not a specific focus for this particular procurement.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Agricultural Marketing Service (AMS) within the USDA is responsible for managing this contract. Transparency is maintained through contract award databases. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

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

Risk Flags

Short contract duration
Single commodity focus

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $49,640.4 to GH DAIRY. COMMODITIES FOR USG FOOD DONATIONS: 2000011152/4100033671/MILK SKIM FRESH CTR # 128 FL OZ

Who is the contractor on this award?

The obligated recipient is GH DAIRY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49,640.4.

What is the period of performance?

Start: 2026-02-03. End: 2026-06-24.

What is the historical spending pattern for skim milk procurement by the USDA?

Analyzing historical spending data for skim milk by the USDA would reveal trends in volume, pricing, and supplier diversity over time. This contract, valued at $496,404.00 for a 141-day period, represents a specific instance of procurement. Understanding past awards can help contextualize the current price and volume, identifying if this award is typical, higher, or lower than previous similar procurements. It also sheds light on the consistency of demand for this commodity within USDA's food donation or distribution programs and the agency's reliance on specific suppliers or market conditions.

How does the price per unit for this skim milk contract compare to market rates?

Without specific unit volume data (e.g., gallons or pounds of skim milk), a direct per-unit cost comparison is challenging. However, the total contract value of $496,404.00 over approximately 4.7 months for fluid milk manufacturing suggests a significant quantity. To benchmark, one would need to determine the total volume procured and divide it by the contract value to get a cost per unit. This figure could then be compared to average wholesale prices for skim milk in Arizona or national averages, considering factors like bulk purchasing discounts and delivery logistics. The firm fixed-price nature implies the price was set before potential market fluctuations.

What is GH Dairy's track record with federal contracts, particularly with the USDA?

GH Dairy's track record with federal contracts, especially with the USDA, is crucial for assessing reliability and performance. A review of federal procurement databases would indicate past awards, contract types, values, and performance history. Positive indicators would include a history of successful contract completion, adherence to delivery schedules, and compliance with quality standards. Conversely, past performance issues, such as late deliveries, quality disputes, or contract terminations, would raise concerns. Understanding their experience with similar commodity procurements provides insight into their capacity and suitability for this current award.

What are the potential risks associated with this specific contract award?

Potential risks for this contract include supply chain disruptions affecting GH Dairy's ability to produce or deliver skim milk, especially given the relatively short performance period (141 days). Quality control issues, while mitigated by the nature of the product, are always a possibility. Furthermore, the concentration of the award on a single commodity and supplier for a specific program could pose a risk if unforeseen circumstances impact GH Dairy's operations. The firm fixed-price contract, while beneficial for cost certainty, could become a risk for the contractor if input costs rise significantly beyond projections.

How effective are USDA food donation programs in achieving their objectives?

USDA food donation programs, such as those likely supported by this skim milk contract, aim to reduce food insecurity and food waste by distributing surplus or purchased food to those in need. Their effectiveness is typically measured by metrics like the quantity of food distributed, the number of individuals or households served, and the nutritional impact on recipients. Program effectiveness can be influenced by logistical challenges, recipient agency capacity, and the types of food available. While this contract focuses on a single commodity, it contributes to the broader goal of ensuring access to nutritious food.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Fluid Milk Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0123

Offers Received: 18

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7280 EUCALYPTUS AVE, ONTARIO, CA, 91762

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

Financial Breakdown

Contract Ceiling: $49,640

Exercised Options: $49,640

Current Obligation: $49,640

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline