The U.S. Department of Agriculture's move to purchase some $3 billion in fresh produce, dairy and meat products for Americans is being questioned after lucrative contracts were awarded to groups who lack food experience.
Reps. Jim Costa, D-Calif., and Marcia Fudge, D-Ohio, and Democrat Stacey Plaskett, the House Delegate for the U.S. Virgin Islands, who each chair subcommittees with jurisdiction over USDA food and donation programs, asked Secretary of Agriculture Sonny Perdue on Friday to explain the department's decision making, including why organizations were chosen without proper qualifications.
"We share USDA's goal of providing effective and timely assistance to families, farmers and food supply businesses like food distributors," the lawmakers said in a letter. "We are concerned, however, that contracts were awarded to entities with little to no experience in agriculture or food distribution and with little capacity to meet the obligations of their award."
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One of the companies facing scrutiny is a wedding and event planner based in Texas that received a $39 million contract to distribute food boxes across the Southwest. It is the seventh largest contract out of nearly 200 distributors in the food box program.
Produce advocates have raised concerns that established companies were overlooked while other young companies reap the benefits. The United Fresh Produce Association asked the USDA in a separate letter why some suppliers were chosen over others, suspecting several were denied on mistaken grounds.
Some lacked the right credentials. For example: the wedding and event planner CRE8AD8 (pronounced "create a date") received its bid two weeks before it had a federal license to distribute fruits and vegetables, according to the USDA's PACA license database. Businesses are required to have a license and without one can face monetary fines of up to $1,200 for each violation.
Other recipients have a history of making donations to food banks and other nonprofits. Borden Dairy Co., a Texas-based dairy processor, is receiving about $146 million from the government for milk and Cargill Meat Solutions about $7.3 million for precooked pork and chicken, according to the awards list issued earlier this month. Tyson Foods, of Springdale, secured a contract for $862,320.
In efforts to keep tons of food from going to waste the USDA created the "farmers to families" food box program to assist farmers and consumers during the coronavirus pandemic. Suppliers tapped by the farm agency are set to deliver products totaling $1.2 billion to food banks, churches and other charities through June 30. The agency has an option to extend contracts until the rest of the $3 billion is spent.
Several politicians like the idea of the project but are concerned with some of the contracts, causing the USDA to make some late changes.
The agriculture department last week axed a $40 million food aid contract with California Avocados Direct, a small produce company with annual sales up to $2 million. "It feels like a giant prank," the company's chief executive told the Washington Post. "There are a lot of hungry people, and there are 60 food banks calling me for delivery. I'd already sent out lots of food."
Lawmakers in Texas are now calling for a USDA investigation into the Texas wedding and event planner's contract after the San Antonio Express-News reported the group has no food distribution history and a resume full of unsupported claims.
Business on 05/27/2020