Agriculture contract for food manufacturing awarded to Diamond Foods, LLC for $14.6M

Contract Overview

Contract Amount: $14,592,076 ($14.6M)

Contractor: Diamond Foods, LLC

Awarding Agency: Department of Agriculture

Start Date: 2009-06-04

End Date: 2009-09-30

Contract Duration: 118 days

Daily Burn Rate: $123.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NUTS

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94111

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $14.6 million to DIAMOND FOODS, LLC for work described as: NUTS Key points: 1. Contract value appears reasonable given the scope of food manufacturing services. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of 118 days indicates a short-term need. 4. Firm Fixed Price contract type likely provides cost certainty. 5. Awarded by the Agricultural Marketing Service, indicating a focus on agricultural products. 6. The North American Industry Classification System (NAICS) code 311999 covers 'All Other Miscellaneous Food Manufacturing'.

Value Assessment

Rating: good

The contract value of $14.6 million for food manufacturing services seems within a reasonable range for a project of this nature. Without specific details on the exact products or services rendered, a direct comparison is challenging. However, the firm fixed-price structure suggests that the government secured a defined cost for the deliverables. Benchmarking against similar contracts for miscellaneous food manufacturing would provide a more precise value assessment, but the initial figure does not raise immediate red flags.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this requirement. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors. However, three bidders can still result in a fair market price, especially if the requirement is specialized.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a competitive environment that can drive down costs and ensure the government receives the best value for its money.

Public Impact

The primary beneficiaries are likely the agricultural producers whose products are processed and distributed. Services delivered include miscellaneous food manufacturing, potentially involving processing, packaging, or formulation. The geographic impact is centered in California, where the contractor is located. Workforce implications may include employment opportunities within the food manufacturing sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only 3 bidders could potentially lead to higher prices than a more robust bidding process.
The short contract duration (118 days) might indicate a need for rapid fulfillment, potentially increasing urgency and associated costs.

Positive Signals

Awarded under full and open competition, ensuring a broad range of potential contractors could participate.
Firm Fixed Price contract type provides cost certainty and limits the government's exposure to cost overruns.
The contractor, Diamond Foods, LLC, is a known entity in the food industry, suggesting established capabilities.

Sector Analysis

The food manufacturing sector is a significant part of the U.S. economy, encompassing a wide range of activities from processing raw agricultural products to producing finished consumer goods. This contract falls under the 'All Other Miscellaneous Food Manufacturing' category, suggesting a specialized niche within the broader industry. Comparable spending benchmarks for this specific sub-sector are difficult to ascertain without more granular data, but the overall food manufacturing industry is characterized by substantial government procurement for various needs, including research, development, and direct supply.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to Diamond Foods, LLC, a presumably larger entity, suggests that small businesses were either not primary bidders or were not selected for this particular award. This contract does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Agricultural Marketing Service (AMS) within the Department of Agriculture. Accountability measures would be tied to the terms and conditions of the Firm Fixed Price contract, ensuring deliverables meet specified quality and quantity standards. Transparency is generally maintained through contract award databases, though specific performance details may be proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Agricultural Commodity Procurement
Food Supply Chain Management
Miscellaneous Food Product Development
Department of Agriculture Contracts

Risk Flags

Limited competition
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $14.6 million to DIAMOND FOODS, LLC. NUTS

Who is the contractor on this award?

The obligated recipient is DIAMOND FOODS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 2009-06-04. End: 2009-09-30.

What specific types of 'All Other Miscellaneous Food Manufacturing' services were procured under this contract?

The provided data indicates the contract falls under NAICS code 311999, 'All Other Miscellaneous Food Manufacturing.' However, it does not specify the exact nature of the services. This category can encompass a wide array of activities, such as the manufacturing of pasta, cereal, pet food, sauces, seasonings, or other food preparations not elsewhere classified. To understand the specific services, one would need to consult the contract's statement of work or detailed award description. Without this, it's difficult to assess the precise value or impact of the procurement beyond its general classification.

How does the $14.6 million contract value compare to typical spending for similar miscellaneous food manufacturing contracts?

Benchmarking the $14.6 million contract value against similar 'All Other Miscellaneous Food Manufacturing' contracts requires access to a comprehensive database of federal procurements with detailed service descriptions. The provided data offers only the total award amount and the NAICS code. Without knowing the specific deliverables (e.g., quantity, complexity, duration of service), it is challenging to make a direct comparison. However, for a contract awarded under full and open competition with three bidders, this value suggests a significant procurement. Further analysis would involve identifying contracts with comparable scope and duration within the same or adjacent NAICS codes to establish a more accurate market rate.

What is the track record of Diamond Foods, LLC in performing federal contracts, particularly within the Department of Agriculture?

The provided data indicates that Diamond Foods, LLC was awarded this specific contract by the Department of Agriculture's Agricultural Marketing Service. To assess their track record, one would need to examine historical federal procurement databases for other contracts awarded to Diamond Foods, LLC. This would include looking at the agencies involved, the types of goods or services procured, the contract values, performance ratings (if available), and any instances of contract disputes or terminations. A review of past performance would help determine their reliability, experience, and success in fulfilling government requirements, especially within the agricultural sector.

What are the potential risks associated with a contract of this duration (118 days) and firm fixed-price structure?

A short contract duration of 118 days, while providing a defined end point, can pose risks if the scope of work is complex or if there are unforeseen delays. For a firm fixed-price contract, the risk lies primarily with the contractor; if costs exceed the fixed price due to scope creep, inefficient performance, or external factors, the contractor absorbs the loss. Conversely, the government risks paying a premium if the contractor is highly efficient and the fixed price was set conservatively. The short duration might also indicate a time-sensitive need, where delays could have significant downstream impacts on the agency's mission.

How does the level of competition (3 bidders) typically influence the final price and quality of services for federal contracts?

A competition level with three bidders is generally considered moderate. While more bidders typically lead to greater price reductions and a wider array of innovative solutions, three bidders can still foster a competitive environment. It suggests that the requirement was known and attractive enough for multiple firms to invest in preparing proposals. The final price and quality are influenced by how well each bidder understood the requirements, their cost structures, and their strategic pricing. If the three bidders were highly capable and their proposals closely matched the government's needs, the outcome could still be favorable. However, a larger pool of bidders often provides a stronger assurance of achieving the lowest possible price and highest quality.

What is the historical spending pattern of the Agricultural Marketing Service (AMS) on miscellaneous food manufacturing contracts?

To determine the historical spending patterns of the Agricultural Marketing Service (AMS) on miscellaneous food manufacturing contracts, one would need to analyze AMS procurement data over several fiscal years. This analysis should focus on contracts classified under NAICS code 311999 and potentially related food manufacturing codes. Key metrics to examine would include the total annual spending, the average contract value, the number of contracts awarded, the types of services procured, and the primary contractors. Understanding these patterns can reveal trends in AMS's reliance on external manufacturing services, the typical scale of such procurements, and the stability of demand within this sector.

Industry Classification

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

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 MONTGOMERY ST FL 17, SAN FRANCISCO, CA, 90

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

Financial Breakdown

Contract Ceiling: $14,592,076

Exercised Options: $14,592,076

Current Obligation: $14,592,076

Timeline