FEMA Awards $2.7M for 2.7 Billion Reusable Gowns Amid COVID-19 Emergency

Contract Overview

Contract Amount: $27,375,768 ($27.4M)

Contractor: Milliken & Company

Awarding Agency: Department of Homeland Security

Start Date: 2020-05-02

End Date: 2020-09-29

Contract Duration: 150 days

Daily Burn Rate: $182.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DELIVERY ORDER FOR 2,700,000 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $27.4 million to MILLIKEN & COMPANY for work described as: DELIVERY ORDER FOR 2,700,000 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19. Key points: 1. Significant volume of gowns procured to address national emergency. 2. Sole-source award raises questions about price discovery and competition. 3. High unit cost may indicate premium pricing due to urgency. 4. Focus on reusable gowns suggests a long-term strategy beyond immediate crisis.

Value Assessment

Rating: questionable

The average unit price of approximately $1.01 per gown appears high for reusable gowns, especially considering the large quantity. Benchmarking against similar large-scale procurements for medical supplies during the pandemic is necessary for a definitive assessment.

Cost Per Unit: $1.01

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to the urgent need during the COVID-19 national emergency. The lack of competition limits the government's ability to secure the best possible price and terms.

Taxpayer Impact: The absence of competition may have resulted in higher costs for taxpayers, as the government did not leverage market forces to drive down prices.

Public Impact

Ensured supply of critical personal protective equipment (PPE) during a pandemic. Supported national response efforts by providing essential medical supplies. Potential for long-term cost savings if gowns prove durable and effective. Availability of reusable gowns reduces waste compared to disposable alternatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potentially high unit cost
Urgency-driven procurement

Positive Signals

Addresses critical need
Reusable product
Large quantity procured

Sector Analysis

Procurement of medical supplies falls under the broader healthcare sector. Spending benchmarks for PPE during emergencies can vary widely based on demand, supply chain disruptions, and urgency. This award is a significant investment in essential medical equipment.

Small Business Impact

There is no indication that small businesses were involved in this specific delivery order. The focus appears to be on a large, established supplier to meet immediate, high-volume demand.

Oversight & Accountability

The award was made under a national emergency declaration, which often involves expedited processes. Oversight would focus on ensuring the gowns meet specifications and that the pricing, while potentially high, was justified by the circumstances.

Related Government Programs

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers
Department of Homeland Security Contracting
Federal Emergency Management Agency Programs

Risk Flags

Lack of competitive bidding
Potentially inflated unit price
Urgency may have compromised price negotiation
Limited transparency on pricing justification
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $27.4 million to MILLIKEN & COMPANY. DELIVERY ORDER FOR 2,700,000 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19.

Who is the contractor on this award?

The obligated recipient is MILLIKEN & COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2020-05-02. End: 2020-09-29.

What is the expected lifespan and reusability of these gowns, and how does this impact the long-term value proposition compared to disposable alternatives?

The expected lifespan and number of reuses for these gowns are critical factors in determining their true value. If the gowns can withstand numerous wash cycles and maintain their protective integrity, the higher initial per-unit cost could be offset by reduced long-term expenditure and waste. Without this data, a direct comparison to disposable gowns is difficult, but the reusable nature suggests a strategic intent for sustained use beyond the immediate crisis.

Given the sole-source nature of this award, what steps were taken to ensure the price paid was fair and reasonable under emergency conditions?

During emergency procurements, especially sole-source awards, agencies typically rely on historical pricing data, commercial price lists, or independent government cost estimates to establish a fair and reasonable price. Documentation of these efforts is crucial. However, the inherent lack of competition means the government cannot definitively confirm the lowest possible price achievable in a competitive market.

How effectively did this procurement meet the immediate demand for PPE during the COVID-19 national emergency, and what was the impact on overall supply chain resilience?

This procurement likely contributed significantly to meeting the immediate demand for PPE by securing a large quantity of reusable gowns. The impact on supply chain resilience is multifaceted; while it addressed a critical gap, relying on a single source for such a large volume could also highlight potential vulnerabilities. The long-term benefit of reusable gowns could enhance resilience by reducing reliance on continuous disposable production.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70FB7020Q00000031

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 920 MILLIKEN RD, SPARTANBURG, SC, 29303

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,375,768

Exercised Options: $27,375,768

Current Obligation: $27,375,768

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70FB7020D00000014

IDV Type: IDC

Timeline