USDA Suspends Peanut Corporation of America from Doing Business with Federal Government

February 4, 2009 06:00 PM

Pro Farmer Editors

USDA has announced it is suspending, and proposing to debar, Peanut Corporation of America (PCA) and its subsidiary Tidewater Blanching LLC from doing business with the federal government.

Effective immediately, USDA said PCA is excluded from participating in government contracts or subcontracts, as well as federal non procurement programs, and PCA will also be excluded from doing business as agents or representatives of other contractors, including serving as a subcontractor to other individuals or companies doing business with the government. The suspension will remain in effect for one year and the debarment is proposed for three years, beginning today.

"The actions of PCA indicate that the company lacks business integrity and business honesty, which seriously and directly hinders its ability to do business with the federal government," said David Shipman, Acting Administrator of USDA's Agricultural Marketing Service. Federal agencies are required to only conduct business with responsible contractors.

USDA said it was taking the action based on reports of evidence obtained by Minnesota and Connecticut state officials, the U.S. Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC), that the sources of a current outbreak of illnesses caused by Salmonella are peanut butter and peanut paste produced or processed by PCA. Within 30 days after receipt of the letter of suspension and proposed debarment, PCA may submit any information or argument in opposition to the actions being taken.

USDA Sec. Tom Vilsack also has removed Stewart Parnell, President and CEO of the Peanut Corporation of America, as a member of USDA's Peanut Standards Board. 

Meanwhile, the Senate Agriculture Committee is holding a hearing today on federal food safety oversight in the wake of the salmonella contamination that has been linked to PCA.

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