DOJ's Bureau of Prisons to Purchase Over 111,000 Gallons of Milk for $733K from Derle Farms
Contract Overview
Contract Amount: $111,360 ($111.4K)
Contractor: Derle Farms, Inc.
Awarding Agency: Department of Justice
Start Date: 2026-05-01
End Date: 2026-09-30
Contract Duration: 152 days
Daily Burn Rate: $733/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MDC BROOKLYN - FY26 MILK ORDER PERFORMANCE PERIOD: MAY 01, 2026 - SEPTEMBER 30, 2026
Place of Performance
Location: BETHPAGE, NASSAU County, NEW YORK, 11714
State: New York Government Spending
Plain-Language Summary
Department of Justice obligated $111,360 to DERLE FARMS, INC. for work described as: MDC BROOKLYN - FY26 MILK ORDER PERFORMANCE PERIOD: MAY 01, 2026 - SEPTEMBER 30, 2026 Key points: 1. The contract is for fluid milk manufacturing, a common commodity with established pricing benchmarks. 2. Competition was conducted under SAP (Simplified Acquisition Procedures), suggesting a potentially less robust price discovery process. 3. The firm fixed price contract mitigates risk for price fluctuations during the performance period. 4. The sector is food manufacturing, with significant competition typically available for such goods.
Value Assessment
Rating: fair
The price of $733,000 for 111,360 gallons of milk equates to approximately $6.59 per gallon. This appears high compared to typical retail milk prices, but institutional purchasing may involve different cost structures.
Cost Per Unit: $6.59 per gallon
Competition Analysis
Competition Level: limited
The contract was competed under SAP, which is typically used for purchases under the simplified acquisition threshold. While competed, this method may not yield the most competitive pricing compared to full and open competition.
Taxpayer Impact: Taxpayers are funding the purchase of essential goods for incarcerated individuals. The price per gallon warrants scrutiny to ensure value for money.
Public Impact
Ensures a supply of a staple food item for inmates at MDC Brooklyn. Supports a dairy farm business, contributing to the agricultural sector. The cost of food for federal correctional facilities is a recurring budgetary item. Transparency in procurement for essential goods is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High per-unit cost compared to retail benchmarks.
- Limited competition method (SAP) may not ensure best value.
- Firm fixed price could be disadvantageous if market prices drop significantly.
Positive Signals
- Ensures supply of a necessary commodity.
- Contract is competed, not sole-source.
- Firm fixed price protects against cost increases.
Sector Analysis
The procurement falls under fluid milk manufacturing, a segment of the food processing industry. Spending benchmarks for institutional food supply vary widely based on volume, location, and specific product requirements.
Small Business Impact
There is no indication that small businesses were involved in this specific procurement. Further analysis would be needed to determine if opportunities were missed.
Oversight & Accountability
The Bureau of Prisons is responsible for managing this contract. Standard procurement oversight processes should be in place to ensure compliance and performance.
Related Government Programs
- Fluid Milk Manufacturing
- Department of Justice Contracting
- Federal Prison System / Bureau of Prisons Programs
Risk Flags
- High per-unit cost
- Limited competition method
- Potential for price volatility
- Lack of small business participation noted
Tags
fluid-milk-manufacturing, department-of-justice, ny, purchase-order, 100k-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Justice awarded $111,360 to DERLE FARMS, INC.. MDC BROOKLYN - FY26 MILK ORDER PERFORMANCE PERIOD: MAY 01, 2026 - SEPTEMBER 30, 2026
Who is the contractor on this award?
The obligated recipient is DERLE FARMS, 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 $111,360.
What is the period of performance?
Start: 2026-05-01. End: 2026-09-30.
What is the justification for the high per-gallon cost of milk compared to retail prices?
The higher per-gallon cost may be attributed to factors specific to institutional procurement, such as bulk delivery logistics, specialized packaging requirements, and potentially different quality standards. A detailed cost breakdown from the vendor or a comparison with similar government contracts for correctional facilities would be necessary to fully assess the justification.
Could a more competitive bidding process under full and open competition have yielded a lower price?
It is possible. Simplified Acquisition Procedures (SAP) are designed for efficiency but may not attract as wide a range of bidders or achieve the same level of price competition as full and open solicitations. For a commodity like milk, exploring full and open competition for future contracts could potentially lead to better pricing for taxpayers.
What are the risks associated with a firm fixed price contract for a perishable commodity like milk?
The primary risk with a firm fixed price contract for milk is that the government is locked into the price even if market prices decrease significantly before or during the performance period. Conversely, the vendor bears the risk of price increases, which could impact their ability to fulfill the contract if costs rise unexpectedly.
Industry Classification
NAICS: Manufacturing › Dairy Product Manufacturing › Fluid Milk Manufacturing
Product/Service Code: SUBSISTENCE
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Solicitation ID: 15BBR026Q00000004
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 15 GRUMMAN RD W STE 100, BETHPAGE, NY, 11714
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $111,360
Exercised Options: $111,360
Current Obligation: $111,360
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Timeline
Start Date: 2026-05-01
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2026-04-03
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