(July 19) Produce dealers who have been bidding frantically for military contracts worth $350 million under a reorganized Defense Commissary are starting to learn which companies will win out and which ones will be left behind.

DeCA, which is streamlining its process for ordering fresh produce, has awarded a contract worth about $32.6 million to Kansas City, Mo.-based C&C Produce Inc., and San Antonio -based B. Catalani Inc., to provide fresh fruits and vegetables to commissaries in two regions in the central U.S.

C&C Produce won the contract for the 16 commissaries in Colorado, Utah, the Dakotas, Nebraska, Kansas, Missouri and Wyoming. B. Catalani will supply 20 commissaries in New Mexico, Oklahoma, and Texas.

“We’ve been servicing these commissaries for about six years on direct-vendor delivery contracts,” said Nick Conforti, C&C’s vice president. “We put together a business plan of what we could do to make them be the most successful, how to grow sales.”

The company will help its commissary clients with merchandising ideas, Conforti said.

“We’d go in and help them build displays and help them merchandise their product to increase their sales,” he said.

Both winning groups partnered with other companies to win the contract — Denver-based Federal Fruit & Produce Inc., and the Norfolk, Va.-based Military Produce Group LLC.

The Military Produce Group also was awarded a contract for southern Virginia; North Carolina; South Carolina; Fort Gordon, Georgia; Keflavik, Iceland; and Guantanamo Bay, Cuba.

The two-year contracts begin Aug. 1 and run through July 31, 2008, and include two one-year option periods, according to DeCA, a unit of the Department of Defense.

DeCA said no other contracts had been awarded as of July 13.

The new system, under which DeCA will handle all produce purchases for its 268 commissaries worldwide — 80 in the U.S. — replaces an older model that required all produce purchases be made through the Defense Supply Center Philadelphia.