USDA's $13.5M Sorghum Purchase from Archer Daniels Midland in 2008

Contract Overview

Contract Amount: $13,484,761 ($13.5M)

Contractor: Archer Daniels Midland CO

Awarding Agency: Department of Agriculture

Start Date: 2008-09-25

End Date: 2008-11-26

Contract Duration: 62 days

Daily Burn Rate: $217.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: KCPG6 SOL 283, SORGHUM

Place of Performance

Location: OVERLAND PARK, JOHNSON County, KANSAS, 66225

State: Kansas Government Spending

Plain-Language Summary

Department of Agriculture obligated $13.5 million to ARCHER DANIELS MIDLAND CO for work described as: KCPG6 SOL 283, SORGHUM Key points: 1. Significant contract value of $13.5 million for sorghum. 2. Archer Daniels Midland is a major player in agricultural commodities. 3. Contract awarded under full and open competition. 4. Firm fixed price contract type suggests price certainty.

Value Assessment

Rating: fair

The contract value of $13.5 million for sorghum is substantial. Benchmarking against similar agricultural commodity purchases would be necessary to fully assess value, but the firm fixed price suggests a defined cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method is generally expected to yield fair market prices.

Taxpayer Impact: The firm fixed price contract aims to ensure predictable costs for taxpayers, mitigating risks of cost overruns.

Public Impact

Ensures supply of a key agricultural commodity (sorghum). Supports agricultural markets and potentially farmers. Impacts food supply chains and related industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (62 days) may limit long-term price benefits.
Lack of specific quality or performance metrics in provided data.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract type.

Sector Analysis

This contract falls within the agricultural sector, specifically grain and field bean wholesaling. Spending benchmarks in this sector are highly variable based on commodity prices and market conditions.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.

Oversight & Accountability

The contract was awarded by the Department of Agriculture's Farm Service Agency. Standard government oversight processes would apply to ensure contract compliance and delivery.

Related Government Programs

Grain and Field Bean Merchant Wholesalers
Department of Agriculture Contracting
Farm Service Agency Programs

Risk Flags

Short contract duration.
Limited data on specific quality requirements.
Potential for commodity price volatility impacting value.
No explicit mention of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $13.5 million to ARCHER DANIELS MIDLAND CO. KCPG6 SOL 283, SORGHUM

Who is the contractor on this award?

The obligated recipient is ARCHER DANIELS MIDLAND CO.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Farm Service Agency).

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2008-09-25. End: 2008-11-26.

What was the market price of sorghum during the contract period to assess value?

Determining the precise market price of sorghum during the 2008 contract period (September-November) is crucial for a thorough value assessment. Fluctuations in agricultural commodity markets can significantly impact the perceived fairness of the $13.5 million price. Researching historical commodity price indices for sorghum would provide the necessary context to evaluate if the awarded price was competitive.

Were there any supply chain disruptions or unique market conditions affecting sorghum prices in 2008?

Investigating potential supply chain disruptions or unique market conditions in 2008 is important for understanding price volatility. Factors like weather events, global demand shifts, or policy changes could have influenced sorghum prices. Understanding these external factors helps assess whether the firm fixed price was advantageous or potentially disadvantageous given unforeseen market movements.

How effectively did this purchase meet the Department of Agriculture's strategic goals for sorghum reserves or distribution?

Assessing the effectiveness requires understanding the Farm Service Agency's specific objectives for this sorghum purchase. Was it for strategic reserves, disaster relief, or market stabilization? Evaluating the quantity, quality, and timely delivery against these stated goals would determine the purchase's strategic effectiveness beyond the financial transaction.

Industry Classification

NAICS: Wholesale Trade › Farm Product Raw Material Merchant Wholesalers › Grain and Field Bean Merchant Wholesalers

Product/Service Code: NONMETALLIC CRUDE MATERIALS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4666 E FARIES PKWY, DECATUR, IL, 13

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

Financial Breakdown

Contract Ceiling: $13,484,761

Exercised Options: $13,484,761

Current Obligation: $13,484,761

Timeline