DOJ's $8.9M contract for dairy products to United Dairy Inc. awarded for Q1 FY26

Contract Overview

Contract Amount: $8,943 ($8.9K)

Contractor: United Dairy Inc

Awarding Agency: Department of Justice

Start Date: 2026-01-01

End Date: 2026-03-31

Contract Duration: 89 days

Daily Burn Rate: $100/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY26 2ND QTR A1 UNITED DAIRY

Place of Performance

Location: CHARLESTON, KANAWHA County, WEST VIRGINIA, 25302

State: West Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $8,943.44 to UNITED DAIRY INC for work described as: FY26 2ND QTR A1 UNITED DAIRY Key points: 1. Value for money appears reasonable given the firm-fixed-price structure and short duration. 2. Competition dynamics indicate a competed award, suggesting potential for price discovery. 3. Risk indicators are low due to the nature of the product and contract type. 4. Performance context is within the Federal Prison System's operational needs. 5. Sector positioning is within the food manufacturing and supply chain for correctional facilities.

Value Assessment

Rating: good

The contract value of $8.94 million for a single quarter of dairy products appears to be within a reasonable range for supporting federal correctional facilities. Without specific per-unit benchmarks for dairy products in institutional settings, a direct price comparison is challenging. However, the firm-fixed-price structure suggests that the government has locked in a price, mitigating risk of cost overruns for this specific period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under Simplified Acquisition Procedures (SAP), suggesting it was likely advertised and received multiple bids. The presence of two bidders indicates a degree of competition, which is generally favorable for price negotiation and value.

Taxpayer Impact: A competed award under SAP generally benefits taxpayers by ensuring that the government receives competitive pricing for goods and services, preventing potential overpayment that could occur with sole-source or limited competition.

Public Impact

Inmates within the Federal Prison System will receive dairy products as part of their nutritional intake. The contract supports the operational requirements of the Bureau of Prisons in West Virginia. This award contributes to the food supply chain for federal correctional institutions. The contract has minimal direct workforce implications beyond the supplier's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery schedules.
Quality control of dairy products to meet federal standards.

Positive Signals

Firm-fixed-price contract limits cost escalation risk.
Short contract duration reduces long-term commitment exposure.
Awarded to a single entity, simplifying management.

Sector Analysis

This contract falls within the broader food manufacturing and distribution sector, specifically serving institutional needs. The market for supplying food products to federal agencies, particularly correctional facilities, is a specialized segment. Benchmarking against similar contracts for institutional food supply would provide further context on pricing and value.

Small Business Impact

The contract was competed under SAP and does not indicate a specific small business set-aside. There is no information provided on subcontracting plans, so the direct impact on the small business ecosystem is not immediately clear, though larger contracts often involve smaller suppliers.

Oversight & Accountability

Oversight for this purchase order would typically fall under the Bureau of Prisons' contracting and logistics departments. Accountability is maintained through the terms of the firm-fixed-price purchase order and the delivery of specified goods. Transparency is facilitated by the public nature of federal contract awards.

Related Government Programs

Federal Prison System Food Services
Bureau of Prisons Commissary Operations
Department of Justice Procurement

Risk Flags

Perishable Goods Delivery
Supply Chain Reliability
Food Safety Standards Compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $8,943.44 to UNITED DAIRY INC. FY26 2ND QTR A1 UNITED DAIRY

Who is the contractor on this award?

The obligated recipient is UNITED DAIRY INC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $8,943.44.

What is the period of performance?

Start: 2026-01-01. End: 2026-03-31.

What is the historical spending pattern for dairy products by the Federal Prison System?

Analyzing historical spending data for dairy products by the Federal Prison System (FPS) is crucial for contextualizing the current $8.94 million award for FY26 Q1. Without access to specific historical databases, a general assessment can be made. FPS, responsible for over 150,000 inmates across numerous facilities, has a consistent and substantial need for food supplies, including dairy. Spending on dairy products would fluctuate based on inmate population, dietary guidelines, and prevailing market prices. A review of past contract awards for similar products would reveal trends in volume, pricing, and supplier stability. For instance, if previous quarterly awards averaged $7-9 million, this current award would be in line with historical norms. Conversely, a significant deviation might warrant further investigation into the drivers of the change, such as increased commodity prices, expanded services, or shifts in procurement strategies. Understanding these patterns helps assess whether the current award represents a fair market price and efficient use of taxpayer funds over time.

How does the price per unit for these dairy products compare to commercial or other government contracts?

Benchmarking the per-unit cost of dairy products in this $8.94 million contract against commercial or other government contracts is essential for evaluating value for money. However, the provided data lacks the specific unit details (e.g., gallons of milk, pounds of cheese) and their corresponding prices. Commercial pricing varies widely based on product type, brand, volume, and region. Government contracts, particularly those for large institutions like the Federal Prison System, often negotiate bulk discounts. Comparing this award to contracts from other federal agencies (e.g., Department of Defense, GSA) or state correctional systems for similar dairy products would provide a more accurate assessment. If specific unit costs were available, they could be compared to indices for dairy commodities or average institutional pricing. Without this granular data, it's difficult to definitively state if the price is competitive, though the competed nature of the award suggests an effort to achieve favorable pricing.

What are the specific risks associated with procuring dairy products for federal prisons?

Procuring dairy products for federal prisons involves several specific risks that need to be managed. A primary risk is supply chain disruption. Dairy products are perishable and require consistent, timely delivery to maintain freshness and meet inmate dietary needs. Any interruption due to transportation issues, weather events, or supplier production problems could lead to shortages and impact inmate welfare. Quality control is another significant risk; ensuring that the dairy products meet stringent federal health and safety standards is paramount to prevent foodborne illnesses. Furthermore, price volatility in the dairy market can pose a risk, although the firm-fixed-price contract structure for this specific award mitigates this for the government during the contract period. Managing these risks requires robust vendor vetting, clear delivery schedules, quality assurance protocols, and contingency planning for potential supply chain failures.

What is the track record of United Dairy Inc. in fulfilling government contracts?

Assessing the track record of United Dairy Inc. in fulfilling government contracts is crucial for understanding their reliability and performance history. As this award is a Purchase Order under Simplified Acquisition Procedures (SAP), it suggests a potentially smaller-scale or less complex engagement compared to large prime contracts. Information regarding United Dairy Inc.'s past performance with federal agencies, including on-time delivery, product quality, and adherence to contract terms, would be available through sources like the Contractor Performance Assessment Reporting System (CPARS). A review of CPARS data, if available, would indicate any past issues, disputes, or commendations. Without specific CPARS data or a detailed history of their government contracting, it's presumed they met the necessary qualifications to be awarded this contract, especially given the competitive nature of the procurement.

How does the contract value compare to the expected duration and scope of services?

The contract value of $8.94 million is for a duration of three months (January 1, 2026, to March 31, 2026), covering the second quarter of Fiscal Year 2026. This implies a quarterly spending rate of approximately $2.98 million. The scope of services involves the provision of dairy products to the Federal Prison System. To assess if this value is appropriate, one would need to understand the average daily inmate population served by the facilities receiving these products, the standard dietary allowances for dairy, and the prevailing market prices for bulk dairy commodities. If the inmate population is substantial, and dairy is a significant component of their diet, then $2.98 million per month could be a reasonable expenditure. Conversely, if the population is smaller or dairy consumption is limited, this value might appear high. The firm-fixed-price nature suggests the price is set regardless of the exact quantity consumed, shifting some demand risk to the contractor.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 15B12126Q00000004

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: United Dairy, Inc.

Address: 508 ROANE ST, CHARLESTON, WV, 25302

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

Financial Breakdown

Contract Ceiling: $8,943

Exercised Options: $8,943

Current Obligation: $8,943

Actual Outlays: $4,743

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline