San Antonio Express-News (Sunday)
Nonprofits wait to hear from S.A. firm
Food bank administrators in Texas and surrounding states are baffled by the lack of communication and food boxes from a San Antonio events planning company that landed a $39 million federal contract to provide food relief.
While many U.S. Department of Agriculture contractors in the agency’s Farmers to Families Food Box Program began making shipments shortly after the start of the distribution period on May 15, the first delivery from Gregorio Palomino’s CRE8AD8 — pronounced “create a date” — didn’t come until May 28.
After the completion of that first delivery — 235 boxes out of a total of 750,000 required under the contract — Palomino posted on his personal Facebook page that “thousands” of food boxes would be “landing next week throughout TX, UT, AZ, OK, LA, AR & NM!”
It didn’t happen.
“They were supposed to ramp up right away, and here we are almost three weeks after the start time and we’ve got nothing,” said Tom Kertis, president and CEO of St. Mary’s Food Bank in Phoenix. “All this money was poured into one provider, and they are not delivering.
“In the meantime, people aren’t getting food because (CRE8AD8) wasn’t prepared.”
As of Saturday, only the San Antonio Food Bank had received shipments from CRE8AD8, which has until June 30 to deliver all 750,000 food boxes within a seven-state area that includes Arizona, Arkansas, Louisiana, New Mexico, Oklahoma and Utah as well as Texas.
Through Saturday, the San Antonio Food Bank has received
4,121 total boxes: 2,747 filled with fruits and vegetables from San Antonio’s Avila Produce and 1,374 containing precooked chicken from Gourmet Foods of Rancho Dominguez, Calif., according to bills of lading.
Of the 469 truckloads of food CRE8AD8 is contracted to deliver in the seven-state region, the San Antonio Food Bank is scheduled to receive 57. The boxes typically weigh between 17 and 25 pounds each.
The Food Bank is scheduled to receive more boxes of protein from CRE8AD8 next week.
“We are three weeks into the six-week program and we have received 3½ truckloads of the 57 we hope to use to feed our families,” said Eric Cooper, president and CEO of the Food Bank. “I guess we are lucky to have received the 3½ as the other food banks in the Southwest Region have not received any of the 469 they desperately need.”
Palomino, who has boasted of heading “an internationally recognized” business “with a global footprint,” did not respond to requests for comment.
Lauren Lear, identified as CRE8AD8’s “dispatch manager” on a bill of lading, also declined interview requests.
Palomino traveled to California last week to broker deals with food purveyors. CRE8AD8’s credit payment terms have ranged from 30 to 60 days, said purveyors in Texas who had preliminary negotiations with the company but declined to go forward because they didn’t want to extend credit to an inexperienced company and other reasons.
“Many of these people want everything upfront,” Palomino wrote in an email to a consultant in Arizona who shared it with the Express-News. “I’m not against it, but people think that we just have money in the bank like that.”
The USDA required that bidders show proof of “adequate financial resources to perform the contract or the ability to obtain them.” A USDA spokesperson said contractors are paid “upon the submission and approval of an invoice evidencing delivery.”
The federal agency handed out nearly 200 contracts worth $1.2 billion for the food box program, which calls for contractors to buy up surplus food from farmers and ranchers, pack it into boxes and deliver it to food banks and other nonprofits to assist people reeling from the COVID-19-triggered recession. CRE8AD8 won the contract despite having no experience in food distribution and lacking a Perishable Agricultural Commodities Act (PACA) license, which the USDA likens to a driver’s license for operating a produce business.
CRE8AD8 has since acquired a PACA license, receiving it just days after it submitted an application. The process usually takes weeks to complete, industry veterans said.
With CRE8AD8 lacking contacts within the food bank industry, Cooper helped the company develop a distribution schedule. On May 15, he presented CRE8AD8 with a plan calling for deliveries to 23 food banks in Texas, Arizona, Arkansas, Louisiana, New Mexico, Oklahoma and Utah.
“The USDA is bringing these nonindustry partners to the table,
and we are having to help them with the learning curve,” Cooper said.
Cooper’s plan included the number of truckloads for each food bank; the number of boxes in each of the produce, protein and dairy categories; addresses and contact information for food bank employees.
After receiving input from CRE8AD8, the plan was revised “several times” before it was “finalized” May 27, Cooper said. The revisions centered on overcoming logistical challenges, mainly involving what is known in the food bank industry as “last-mile issues,” Cooper said.
“They were supposed to then reach out to the (food banks) and coordinate the deliveries,” Cooper said of CRE8AD8.
But food bank administrators throughout the seven-state region that should be served by CRE8AD8 said they have not heard from the company
“I’ve moved on and I am working with those vendors who are communicating with me,” said Denise Blok, chief operating officer of the Central Texas Food Bank in Austin, which is supposed to receive three truckloads from CRE8AD8.
Blok said she called CRE8AD8 shortly after the USDA announced May 8 it had given the company the contract.
“Nobody has ever gotten in touch with us,” Blok said “There is frustration, especially because it is someone that is (geographically) close to us. To not hear from a single person from the company, that is a little discouraging.”
Trisha Cunningham, president and CEO of the North Dallas Food Bank in Plano, described a similarly
frustrating experience with CRE8AD8. The North Dallas Food Bank should receive nine truckloads from CRE8AD8.
“The (North Dallas Food Bank) has requested food from the company, but to date, we have not received any product,” Cunningham said. “We are hopeful they will be able to deliver on the requested product so we can use this food to feed our community.”
St. Mary’s Food Bank in Phoenix was told it would receive 24 truckloads from CRE8AD8. In need of protein boxes, Kertis said he reached out to Gourmet Foods to see if CRE8AD8 could provide it with boxes of precooked chicken.
Gourmet Foods’ reply left Kertis crestfallen.
“I was told they are going to focus on Texas, and they might schedule a load for (delivery to Phoenix) at the end of the month,” Kertis said. “The program ends at the end of the month, so in effect we have virtually no meat items.”
Kertis said he’s puzzled as to why CRE8AD8 is focused on delivering so many boxes of chicken and pork to Texas when it would be cheaper to ship to Phoenix.
“They are coming out of L.A., and it’s about a six- to seven-hour drive out of L.A.,” he said. “The cost would be lower, and they would spread the wealth around a little bit. But it doesn’t sound like they want to do it. It’s unfortunate.”
Eric Kopelow, chief operating officer for Gourmet Foods, said the company’s “first obligation is to the San Antonio Food Bank,” according to its agreement with CRE8AD8.
“Phoenix is a secondary location,” Kopelow said.