How do companies with no warehouse or logistic capabilities win a federal contract to supply produce boxes to food banks?
That is one of many questions the industry is asking about the recipients of the U.S. Department of Agriculture’s Farmers to Families Food Box Program contracts.
One industry operator disappointed in the program is Jamie Sanfillipo, co-owner of Sanfillipo Produce Co., Columbus Ohio.
Noting that the company has had to lay off employees and cut back service to make it through the COVID-19 crisis, Sanfillipo said he hoped the program could help his company.
“When I was first told about the program I was told that it would help food banks and nonprofits by allowing smaller, local and regional produce companies to provide premade boxes of fresh fruit and vegetables their locations,” he said in an e-mail. “What this turned out to be was another example of a lazy government and corporate welfare.”
Sanfillipo decried several contracts more than $25 million.
“There are almost no smaller local companies that are included in this program,” he said.
Brent Erenwert, CEO of Brothers Produce, Houston, said the awards process “broke the middle” part of the supply chain, short-changing wholesalers with warehouses and trucks.
“A lot of the award recipients did not have the logistics, as we are seeing it.”
Tom Stenzel, president and CEO the United Fresh Produce Association, sent 15 questions about the process to Bruce Summers, administrator of the USDA’s Agricultural
Marketing Service, which oversees the Farmers to Families Food Box Program.
Stenzel thanked the USDA for their speed in creating the program, soliciting offers and awarding bids, but said the list of recipients created “many questions” that need to be addressed.
“This is not ‘sour grapes’ from those that may not have been awarded; this is a genuine effort to ensure integrity and confidence in the program and that fresh produce actually gets to those in need in an efficient and cost-effective way,” Stenzel said in the letter.
The questions Stenzel posed include:
- Will USDA make available a list of all applicants that applied?
- Will USDA release the full proposals for those that were awarded?
- Did USDA require that awardees be PACA-licensed produce dealers in good standing? If not, why not, and how can USDA ensure that non-licensees fulfill the requirements of PACA?
- We understand that offerors were required to explain their dependence upon subcontractors in their proposals, and if they did not, they need to submit a waiver to request to add a subcontractor now. We are hearing from our members today numerous requests for new subcontractors. Companies who were awarded bids without their own warehouse, staff and distribution ability are now soliciting companies that have those facilities and were denied bids for no apparent reason.
- To what extent did USDA consider an offeror’s ability to deliver on the contract effectively and efficiently? We understand companies may have been awarded a contract larger than their annual revenues. We understand other companies may have been awarded a contract despite the fact that they have no trucks nor delivery systems.
- How will USDA determine that the contract is being carried out as promised in the bid? What actions will be taken if the contract is not being fulfilled?
- If during the base period there are concerns around the contractor’s ability to deliver, will previously denied offerors be given the opportunity to perform?
- There are some contracts that were awarded to companies that are not located and appear to not have business locations in that region. What is the rationale for awarding those contracts while others in those regions were not awarded contracts?
- Will USDA reconsider current offers from companies that can clearly show the AMS team that mistakes were made in the evaluation of their offers?
- What will be USDA’s process for subsequent bid periods to ensure that additional vendors are approved and awarded?
Did your company send in a bid that was passed over? Do you have a comment about who did, or didn't, receive a contract? Send comments to [email protected]