(Dec. 15, 1:56 p.m.) The Defense Logistics Agency of the Department of Defense has awarded a California distributor a contract formerly served by now-closed J.C. Produce.

Coast Produce Co., Los Angeles, has assumed the contract, originally awarded to J.C. Produce, West Sacramento, Calif., said Betty Guarina, logistics official with the Department of Defense Fresh program, Philadelphia.

J.C. Produce, which closed its doors Oct. 17, had been a contracted supplier until 2009 to supply fresh fruit and vegetables to military bases, schools and American Indian reservations in the West. The contract was worth up to $10.7 million, according to the Defense Department.

Coast Produce is an existing contracted supplier and has a $14.7 million contract that extends to mid-July.

Jinju Wilder, president of Coast Produce, said that the firm was notified of the Defense Logistics Agency backup plan in late November.

“In our contract for Los Angeles and San Diego, it does say that we serve as the backup vendor for adjacent areas, and so basically they said they had no idea that J.C. Produce was going to be closing its doors and they wanted us to take over for that area,” she said. “This is their solution until they put it out to rebid.”

Wilder said Coast Produce is now responsible for the territory formerly covered by J.C. Produce, which extends to northern California and into Nevada.

Coast Produce will subcontract some of the distribution to fulfill the business, she said.

Coast Produce also has a commissary contract with the Department of Defense, Wilder said.

She said the process to become a contractor is very competitive and doesn’t offer distributor high margins.

“For a while it was really difficult, because you bid on it in 2006 and our contract was awarded in January this year,” she said. “You can imagine that the distribution price we put forward in 2006 and the way that gas prices increased earlier this year, we were really struggling.”

Recent lower trending diesel prices have helped ease the cost pressure.

Guarina could not say if the government lost any money when J.C. Produce closed its doors.