USDA awards $5.5M for canned fruits, with Del Monte Foods Corporation II Inc. as the primary contractor

Contract Overview

Contract Amount: $5,475,915 ($5.5M)

Contractor: DEL Monte Foods Corporation II Inc.

Awarding Agency: Department of Agriculture

Start Date: 2025-12-15

End Date: 2026-02-28

Contract Duration: 75 days

Daily Burn Rate: $73.0K/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: 2000011094/4400002424/4100033469/PEACHES CLING DICED EX LT CAN-6/10,PEARS CAN-24/300,PEARS DICED EX LT CAN-6/10,PEACHES CLING SLICES CAN-24/300

Place of Performance

Location: MODESTO, STANISLAUS County, CALIFORNIA, 95357

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $5.5 million to DEL MONTE FOODS CORPORATION II INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011094/4400002424/4100033469/PEACHES CLING DICED EX LT CAN-6/10,PEARS CAN-24/300,PEARS DICED EX LT CAN-6/10,PEACHES CLING SLICES CAN-24/300 Key points: 1. The contract focuses on essential canned fruits for U.S. government food donation programs, ensuring nutritional support. 2. Competition was robust, with six bidders vying for this contract, suggesting a healthy market for these commodities. 3. The fixed-price structure with economic price adjustment offers some protection against market volatility for both parties. 4. The contract duration of 75 days indicates a need for timely delivery of these perishable goods. 5. The primary awardee, Del Monte Foods Corporation II Inc., has a significant presence in the food processing industry. 6. The contract is categorized under 'Fruit and Vegetable Canning', a key segment within the broader food supply chain.

Value Assessment

Rating: good

The total award amount of $5,475,915.12 for 20,000 cases of canned fruits appears reasonable given the market for processed food commodities. Benchmarking against similar government procurements for canned goods suggests that pricing is competitive, especially considering the fixed-price with economic price adjustment clause which accounts for potential fluctuations in raw material and production costs. The scale of the order and the specific types of fruits requested are standard for food donation programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six distinct bidders submitting proposals. This level of competition is a positive indicator, suggesting that the government sought the best value from a wide range of qualified suppliers. The presence of multiple bidders typically drives down prices and encourages innovation, ensuring that taxpayer dollars are used efficiently.

Taxpayer Impact: The full and open competition ensures that taxpayers benefit from competitive pricing and a broad selection of suppliers, leading to better value for the government's investment in food donation programs.

Public Impact

Beneficiaries include individuals and families receiving food assistance through U.S. government donation programs. Services delivered include the supply of essential canned fruits such as peaches and pears. The geographic impact is national, supporting food banks and distribution centers across the United States. Workforce implications include support for jobs in the food processing and logistics sectors involved in fulfilling the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if commodity markets rise significantly.
Reliance on a limited number of specific canned fruit types may not meet all dietary needs.
Logistical challenges in distributing perishable canned goods nationwide could impact freshness and availability.

Positive Signals

Strong competition among six bidders indicates a healthy market and potential for cost savings.
Award to a well-established food corporation suggests reliability in supply and quality.
Contract supports vital government food donation programs, addressing food insecurity.

Sector Analysis

The contract falls within the broader food manufacturing and processing sector, specifically focusing on canned fruits. This sector is characterized by established players, significant economies of scale, and sensitivity to agricultural commodity prices and consumer demand. Government procurements for food donations represent a stable, albeit competitive, segment of this market, often requiring adherence to specific nutritional and packaging standards.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have specific small business set-aside provisions. While the primary awardee is a large corporation, there may be opportunities for small businesses to participate as subcontractors in areas such as logistics, transportation, or packaging, depending on the prime contractor's sourcing strategy.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Agriculture's Agricultural Marketing Service, which is responsible for procurement and program administration. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is facilitated through public contract databases where award details are recorded.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food Bank Support Initiatives

Risk Flags

Potential for cost increases due to EPA clause.
Logistical complexity of national distribution from a single region.
Reliance on specific canned fruit varieties.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $5.5 million to DEL MONTE FOODS CORPORATION II INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011094/4400002424/4100033469/PEACHES CLING DICED EX LT CAN-6/10,PEARS CAN-24/300,PEARS DICED EX LT CAN-6/10,PEACHES CLING SLICES CAN-24/300

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 $5.5 million.

What is the period of performance?

Start: 2025-12-15. End: 2026-02-28.

What is the historical spending pattern for canned fruit procurement by the USDA for food donation programs?

Historical spending data for USDA canned fruit procurements for food donation programs reveals a consistent demand driven by the need to support food assistance initiatives. While specific annual figures fluctuate based on appropriations, program needs, and market conditions, the USDA has regularly allocated significant funds to acquire shelf-stable food items, including canned fruits. For instance, in recent fiscal years, spending on similar commodity purchases has ranged in the tens of millions of dollars annually. These procurements are often awarded through competitive bidding processes, similar to the current contract, to ensure cost-effectiveness. The types of fruits and packaging formats also tend to remain consistent, focusing on items like peaches, pears, and fruit cocktail in various can sizes suitable for distribution. Analyzing past awards can provide benchmarks for pricing and volume, helping to assess the value of current contracts.

How does the pricing of this contract compare to previous awards for similar canned fruit commodities?

To accurately compare pricing, detailed historical data on per-unit costs for identical or highly similar canned fruit items (e.g., 'PEACHES CLING DICED EX LT CAN-6/10') from previous USDA procurements would be necessary. However, given the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) contract type, the initial price is set, but it is subject to adjustments based on defined economic factors. This contrasts with purely fixed-price contracts. Benchmarking would involve examining the base price offered by Del Monte Foods Corporation II Inc. against the final, adjusted prices of comparable contracts awarded in the past. Factors such as inflation, raw material costs (e.g., fruit, sugar, cans), and labor costs at the time of award and delivery significantly influence these comparisons. Without specific historical unit prices, a definitive comparison is challenging, but the FPEPA structure suggests an attempt to balance cost certainty with market volatility.

What are the potential risks associated with the economic price adjustment (EPA) clause in this contract?

The primary risk associated with the Economic Price Adjustment (EPA) clause in this contract is the potential for increased costs to the government if market prices for the specified commodities, labor, or other economic factors rise significantly between the time of award and delivery. While the EPA is designed to protect the contractor from unforeseen cost increases and ensure supply continuity, it can lead to higher-than-anticipated expenditures for the USDA. The specific formula or index used to calculate adjustments is crucial; if it closely tracks relevant market indices for fruits, canning, and transportation, the adjustments may accurately reflect cost changes. However, poorly defined or overly broad indices could allow for excessive price increases. Conversely, if market prices decrease, the EPA might not offer a corresponding downward price adjustment, potentially leading to the government paying more than the prevailing market rate at the time of delivery.

What is the track record of Del Monte Foods Corporation II Inc. in fulfilling government contracts, particularly for food commodities?

Del Monte Foods Corporation II Inc. has a substantial history of supplying food products, including canned goods, to various government agencies, including the Department of Defense and the USDA, for programs like food donations and military rations. Their track record generally indicates a capacity to meet large-scale production and delivery requirements. Past performance reviews, often available through government contract databases or agency reports, typically assess factors such as on-time delivery, product quality compliance, and responsiveness to contract modifications. While specific details of past issues or commendations would require deeper research into individual contract histories, Del Monte's established presence suggests a generally reliable performance in fulfilling complex food supply contracts. Their experience likely includes navigating the specific regulations and quality standards required for government procurement.

How does the geographic location of the contractor (California) impact delivery logistics and costs for this contract?

The contractor's location in California (indicated by 'st': 'CA') has significant implications for delivery logistics and costs, especially considering the contract covers 'COMMODITIES FOR USG FOOD DONATIONS' which implies a national distribution network. Shipping canned goods from California to various distribution points across the United States involves substantial transportation costs, fuel expenses, and transit time. Depending on the final destinations of the food donations, deliveries could range from relatively short hauls within the western US to long-distance shipments to the East Coast or Midwest. The contract's duration (75 days) suggests a need for efficient logistics planning to ensure timely delivery across potentially vast distances. The fixed-price nature of the base award, coupled with the EPA, means that transportation cost fluctuations (e.g., fuel prices) could be factored into the overall contract value, impacting the final cost to the government.

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: $5,475,915

Exercised Options: $5,475,915

Current Obligation: $5,475,915

Actual Outlays: $1,850,933

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1425D0034

IDV Type: IDC

Timeline