USDA continues to fund companies with no food service experience to help feed needy families

Over the summer, while trying to help feed needy families during the pandemic, the US Department of Agriculture doled out contracts to businesses with no experience in food service.

Those problems have continued as the USDA handed out more money under the Food Box program, and the Government Accountability Office has recommended the agency to review its process.

For example, a travel and wellness company with only an airport kiosk received a third contract to distribute fresh fruits and vegetables.

The program has entered its third round of funding. The contracts for the third round were awarded based on what company could provide food at the lowest price, a USDA spokesperson said.

After helping distribute about 80 million food boxes from May to August, the agency announced up to $1 billion in additional funding. Fifty-four out of about 200 companies received extensions for the third performance period from Sept. 1 to Oct. 31.

As of Oct. 7, the program helped distribute 102 million food boxes, according to the agency.

The agency announced the third round of funding would focus on companies that could deliver products to the “last mile,” which includes handling and delivering of produce into the hands of the hungry.

“Last mile is defined as the final movement of goods from a transportation or distribution hub to the final delivery destination,” a USDA spokesperson said.

When it started, the USDA did not require distributors to help the food banks cover those expenses.

Companies without food service experience have continued to benefit from the program. During the first two rounds, some food banks were troubled by having to cover those expenses.

“The contractors right now are not willing to help with those expenses,” Eric Cooper, San Antonio Food Bank president, told the Midwest Center in June.

In May, Travel+Well Holdings, based in Santa Rosa, California, received a $12 million contract to distribute fresh fruits and vegetables in the western states.

After extending its initial contract in July, the USDA decided to extend it for a second time last month.

The USDA said that during this third distribution period they will prioritize serving underserved communities, but it is unclear how Travel+Well, a company that sells hand sanitizer and skin care products in an airport kiosk and online, will be able to serve these communities.

The company was awarded a contract for $1.7 million to distribute over 30,000 boxes with fresh produce, dairy products, precooked meat and fluid milk in economically-distressed communities in northern Nevada, according to the new USDA list of approved contractors.

Travel+Well did not respond to multiple requests for comment.

“Travel Well had a contract in Round 1, which was extended into Round 2 and, subsequently, through September 18. The decision to extend contractors in Round 2 was determined based on their performance,” a USDA spokesperson said.

On Sept. 16, the Government Accountability Office released a report on the “successes and challenges” of the Food Box Program “to inform future efforts.”

The U.S. GAO recommended that Secretary Perdue directed the Agricultural Marketing Service, agency in charge of the program, “to conduct an evaluation of the Farmers to Families Food Box Program after the third round.”

According to the report, the USDA said “any reviews could be redundant.” The department argued that the program is already being reviewed by the Office of the Chief Financial Officer, the USDA Office of Inspector General and the U.S. GAO.

Although the program initially offered the option for distributors to apply for a fourth period of funding, which would last until December, USDA’s Secretary Sonny Perdue told industry groups this month that the agency would prefer to end the program on October 31 and “let the market work.”

The food boxes have begun to include letters signed by President Trump. On Aug. 14, a group of nearly 50 Democratic lawmakers sent a letter to Secretary Perdue calling the President’s letter “self-promoting” and “inappropriate” given the timing before the Nov. 3 presidential election.