Contractors selected for USDA food box program raise more red flags

The Counter has found additional inconsistencies in a list of contractors approved for the agency’s Farmers to Families Food Box Program. It’s a roster that’s been under intense scrutiny in recent days for failing to include well-established distributors capable of handling the project’s scope and scale. 

About two weeks ago, Scott DeJoseph, owner of Premier Catering & Events in Prescott, Arizona, got a strange, short email from the United States Department of Agriculture (USDA): He’d won a million-dollar contract to deliver food boxes in his area. 

It came as a surprise. He hadn’t applied to be a contractor for the agency’s Farmers to Families Food Box Program, a $3 billion food-aid initiative designed to distribute boxes of produce, meat, and dairy to families in need during the Covid-19 pandemic. But he was willing to help out in any way he could. 

“I just don’t have too many people approach me with million-dollar contracts, so I just figured it was a joke,” he said. But the email looked official. He asked the agency to call him to follow up. 

As of Thursday, he was still waiting for a response. In the interim, DeJoseph had to take his laptop in for repairs, and he hasn’t been able to find the email exchange on his phone to follow up with USDA. “I’d love to know what they want me to do,” he said. 

Agriculture Secretary Sonny Perdue, Maryland Governor Larry Hogan, Senior Advisor to the President Ivanka Trump and CEO Coastal Sunbelt Produce John Corso tour a distribution facility in Laurel, MD on Friday, May 15, 2020.

USDA / Meghan Rodgers

The USDA’s Farm to Families Food Box program came under added scrutiny in recent days, after the agency canceled a $40 million contract with California Avocados Direct and The San Antonio Express revealed that the owner of an event planning company called CRE8AD8, which was awarded a $39 million contract, had made dubious claims about his clients and credentials. Even before these new details were revealed, members of the food industry were confounded by the list of nearly 200 contractors selected from more than 550 proposals. High-dollar contracts had been awarded to companies that had never worked with the government before, while well-established distributors were left out. Members of Congress have called on the agency to answer questions about its selection process. 

The USDA’s public-facing list of contractors approved for the food box program just made matters more confusing. The phone number listed for Premier Catering & Events in Arizona matches the phone number listed for Menu Maker Foods, a Missouri-based contractor with a Missouri area code, which is listed right above Premier in alphabetical order. Further, the Premier Catering & Events listed on the website was located in Louisiana, not Arizona. Turns out, there’s another company by the same name. A call to the Thibodaux, Louisiana-based Premier confirmed that it was distributing food boxes.

The USDA did not directly respond to questions about the email DeJoseph said he received, nor did it confirm that it had sent the email, saying that “certain confidential contract details are not releasable.” It’s certainly possible that he was simply contacted in error and received an email that was meant for the Thibodaux-based Premier Catering & Events. In fact, it’s likely. But nobody from the agency has gotten back to DeJoseph to confirm that one way or the other.

“I don’t expect a million dollars, but if they want me as a part of the program for our county, I’m happy to do so.”

“Anything the government touches turns into a cluster,” DeJoseph said, adding that he’d be happy to assemble food boxes. “I don’t expect a million dollars, but if they want me as a part of the program for our county, I’m happy to do so.”

The Counter found additional inconsistencies among the list of contracts awarded by USDA. Dozens of contractors have not yet received Perishable Agricultural Commodities Act (PACA) licenses, which are required for operating produce businesses, despite the agency’s requirement that they do so. Many may already be distributing boxes without the proper licensure. 

Companies that buy and sell large quantities of fruits and vegetables are required by USDA to obtain these licenses, which are “the key to ensuring that traders meet their contractual obligations under the law,” according to the agency. Earlier this month, ProPublica revealed that 49 of the 159 food box contractors selected by USDA had not yet obtained their PACA licenses. A follow-up search by The Counter revealed that, while a handful of contractors have obtained licenses in the last couple of weeks, dozens remain unlicensed. Contractors were scheduled to begin distributing boxes on May 15. 

At least two companies contracted by USDA to distribute food boxes were flagged as being “women-owned.” Corporate records appear to indicate these companies aren’t owned by women.

Addditionally, at least two companies contracted by USDA to distribute food boxes were flagged as being “women-owned” in the government’s spending database, a tool used to disclose federal contracts. Corporate records appear to indicate these companies aren’t owned by women. 

It is USDA policy to provide “maximum practicable contracting and subcontracting opportunities to … women-owned business,” according to the agency’s contracting deskbook. Two food box contractors, Yegg, Inc. and T&T Produce, are flagged in the government’s federal spending database as being “women-owned” businesses, and together their contracts total more than $18 million. Yet T&T Produce lists Anthony Buchanan as owner and CEO on its website, and corporate filings name Gary Patrick as the company’s registered agent. Yegg, Inc. does advertise the name of its owner on its website, but corporate filings from February 2020 show that the company is registered to George Egbuono, CEO. The filings do indicate a director named Esther Villars. Multiple requests for clarification from both companies yielded no response. 

Asked about the extent to which the agency considered women- and minority-owned businesses in its contract awarding process, a USDA spokesperson responded that “[p]roposals for the Farmers to Families Food Box Program were evaluated by, in descending order of importance, the technical information contained, past performance of the offeror, the offeror’s capability to perform, and the prices offered.” 

Food box contractors must adhere to “high food safety protocols,” yet the agency did not answer specific questions about whether it considered a record of recent product recalls when selecting contractors.

According to the spokesperson, food box contractors must adhere to “high food safety protocols,” yet the agency did not answer specific questions about whether it considered a record of recent product recalls when selecting contractors. Sassy Cow Creamery, located in Columbus, Wisconsin, one of the dairies contracted to distribute $176,000 worth of fluid milk, ran afoul of Food and Drug Administration (FDA) regulations as recently as last year. The creamery issued a recall in February of 2019 because it mistakenly packaged ice cream containing nuts in containers meant for Cookies and Cream, meaning someone with severe nut allergies could have gotten sick. Sassy Cow also issued a voluntary recall of milk and ice cream in 2017 because it “could not prove with 100% certainty that every ounce of Sassy Cow products were fully pasteurized,” according to WMTV, a local NBC affiliate. 

A 2019 FDA investigation following the recall found additional “serious violations” of federal regulations, according to a December 2019 warning letter issued by the agency. During the inspection, the agency determined that the company’s ice cream had been “prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.” Specifically, the agency found issues with the company’s monitoring of sanitation practices and a failure to check for Listeria contamination according to its internal monitoring plan. 

Reached for comment, James Baerwolf, co-owner of Sassy Cow, said that the issues raised in the investigation had “zero interaction with anything we’re doing now,” and that “if you could peer into every single plant out there, and have the ability to do that, that would be pretty commonplace, too—there’s nothing that stands out as unordinary.” He said the violations found during the investigation had since been resolved. 

The USDA processed applications for the Farms to Families Food Box Program very quickly, and many contractors are already delivering boxes to pantries facing spikes in demand. But some are falling behind: CRE8AD8, the event planner in San Antonio, has delivered just 235 out of 750,000 boxes it promised by the end of June, according to The San Antonio Express. Delays like this have their consequences. San Antonio Food Bank CEO Eric Cooper told Politico he was only receiving about 10 percent of the food boxes he expected each week. “I need the food,” he said.