Politico | By Helena Bottemiller Evich and Ryan McCrimmon | May 27, 2020
An event-planning company that received one of the largest federal contracts to provide produce, meat and dairy to hungry families has yet to deliver the much-needed boxes to food banks across the Southwest.
The delay has stoked concerns about the Agriculture Department’s new $3 billion “Farmers to Families Food Box Program” — especially surrounding multimillion-dollar contracts awarded to several small firms with little experience in food distribution.
Leading lawmakers and food banks are demanding answers about how a small event planner received a huge, $39 million federal contract to serve charities like the San Antonio Food Bank, which has yet to receive a single box from CRE8AD8 (pronounced “Create a Date”), a San Antonio company that markets itself as a lavish wedding and corporate event planner.
CRE8AD8 was awarded the seventh largest contract out of nearly 200 companies selected for the program. As POLITICO first reported earlier this month, the firm’s qualifications concerned many food industry leaders, including those who missed out on awards themselves
The decision led to questions about how the company would quickly source, store, pack and deliver millions of pounds of perishable goods. Other multimillion-dollar contracts went to a trade financing firm and a seller of health and wellness items for travelers, as POLITICO reported. The companies are supposed to collect a variety of food items, pack them in easy-to-distribute boxes and distribute them to food banks, churches and other nonprofits.
But food banks have yet to receive the hundreds of thousands of boxes CRE8AD8 agreed to deliver across the region, starting with Texas. The firm told the San Antonio Food Bank that deliveries will begin June 1.
“I need the food,” said Eric Cooper, CEO of the San Antonio Food Bank. “We’re seeing a 100 percent increase in demand. We went from feeding 60,000 people a week to 120,000.”
Cooper had hoped the Agriculture Department program announced with much fanfare would bridge the gap in helping him serve more hungry people. But his organization is getting about 10 percent of the USDA food boxes it expected each week — all of them from companies that received much smaller contracts than CRE8AD8.
USDA officials held a call with the food bank this week to discuss the situation, but it’s unclear if action will be taken. The Agriculture Department confirmed that CRE8AD8’s contract for the food box program is still active.
“USDA’s Agricultural Marketing Service constantly reviews the performance of the contracts awarded and USDA could choose to continue or terminate the contracts for the government’s convenience,” a spokesperson said. The department declined to provide information about how it evaluated recipients, saying “confidential contract details are not releasable.”
Scrutiny by Congress
Several contractors with experience in food distribution have started delivering much-needed food boxes to food banks in other parts of the U.S. successfully.
Still, lawmakers are raising fresh concerns about how the department selected the companies. Late last week, three House Agriculture subcommittee leaders sent Secretary Sonny Perdue a list of questions about the awards process. Others are asking USDA to rip up the wedding planner’s contract and investigate how the selections were made.
In a letter to Perdue on Tuesday, Rep. Lloyd Doggett (D-Texas) claimed the contract “was issued without a credible background check” and asked the department to detail the company’s commitments for daily and weekly food deliveries through June 30, among other questions.
“A family cannot eat an IOU,” wrote Doggett, whose district stretches from Austin to San Antonio. “Poor performing, inexperienced contractors risk delaying food delivery or even delivering spoiled, dangerous food to families who need help now.”
The San Antonio Express-News recently reported that many of CRE8AD8’s credentials and clients had been greatly exaggerated, if not fabricated. The USDA did not respond to the specific concerns raised by the investigation. The firm did not respond to POLITICO’s requests for comment.
Rep. Joaquín Castro, another Democrat from San Antonio, raised similar questions about CRE8AD8 last week in a letter to USDA asking for an “investigation of the awards process and subsequent execution by all awardees.”
USDA has already yanked one large award: California Avocados Direct, a San Diego-area operation with annual sales up to $2 million, received a $40 million contract to deliver fresh fruit and vegetables to food banks in the Southwest, but the deal was abruptly canceled last week.
A USDA spokesperson said Tuesday that California Avocados Direct was the only company whose contract has been terminated.
Last week, the department issued a special license to CRE8AD8 to allow it to operate as a produce business. Usually the process to get what’s known as a PACA license — which is considered essential in the industry — takes several weeks.
The company touted its new license as a sign of USDA’s confidence. “We’ve received our PACA license! Let’s feed America!” CRE8AD8 posted on its Facebook page last week.
Brent Erenwert, CEO of Brothers Produce, a Houston-based produce distributor that applied but did not get awarded a contract, said on Twitter that industry members have “been in contact with alternatives” in the San Antonio area.
“The USDA is protecting this area as people suffer for some reason,” he wrote.
San Antonio Food Bank is actively working with CRE8AD8 in the hopes that the company can deliver on its promises. “We hope that they’re successful because our families desperately need the food,” Cooper said.
But so far, the program has been painfully slow to get up and running in the Southwest region.
“Where is it going? All I know is that it’s a lot of money and we haven’t really seen that much yet,” Cooper said.
The food bank in San Antonio, a large, majority-Latino city with the highest poverty rate in the nation, has received three semi-truckloads of boxes so far from other contractors. However, it asked for 20 truckloads per week to help meet the increased need.
Right now, so many families are lining up at distribution sites that the food bank burns through truckloads quickly. The current pace is 70 truckloads per week.
“I’m very grateful for every truckload, but those three truckloads we’ve gotten from [this program] will be gone in an hour and a half,” Cooper said. “The need is great.”
Miles and miles of lines persist
The fledgling food box program is working well for many nonprofits and food banks serving food to people in need. Of the roughly dozen major food banks POLITICO contacted, nearly all reported that they had begun receiving boxes, though many deliveries starting behind schedule.
USDA’s goal was for boxes to begin going out by May 15. Many operations didn’t launch until this week, a delay that many nonprofits say is not unusual in the bureaucratic world of government food programs.
The Vermont Foodbank had about a week to get the word out about its first distribution event on May 15, so organizers said they were stunned to see cars begin lining up at 7:30 a.m. By the time the event kicked off at 10 a.m., a line of nearly 2,000 cars waiting to pick up the boxes spanned five miles.
“We’ve never seen anything like that in the history of our organization,” said Nicole Whalen, a spokesperson for the Vermont Foodbank.
The distribution was staged on an airport tarmac in Berlin, Vt., to help maintain social distance. Members from the National Guard were on hand to load food straight into car trunks.
Families were given a true trunkload of food — including 15 to 25 pounds of produce, more than seven pounds of cheese, 20 pounds of cooked chicken and two gallons of milk.
The site ran out of perishable food shares after a few hours, giving out FEMA nonperishable foods to the remaining families who had waited for hours.
“What we saw is that the need and interest in this type of support is well above and beyond anything we could have possibly anticipated,” Whalen said.
Since then, the food bank had to rethink how it distributes food with unprecedented wait times for needy families. Organizers have ordered portable toilets, started handing out water and put up rolling billboards to help communicate with long lines of cars. They’ve also had to call in more help managing traffic.
“Even with all of those tweaks, people are waiting in their cars for a long time,” Whalen said. “It’s not the experience we would prefer for families who are trying to feed their families.”