HHS spent $168.5M on N95 masks during COVID-19 response, awarded to Honeywell

Contract Overview

Contract Amount: $168,504,207 ($168.5M)

Contractor: Honeywell Safety Products USA, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2020-03-21

End Date: 2021-12-31

Contract Duration: 650 days

Daily Burn Rate: $259.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 62

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ACQUISITION OF N95 MASKS FOR COVID-19 RESPONSE

Place of Performance

Location: SMITHFIELD, PROVIDENCE County, RHODE ISLAND, 02917

State: Rhode Island Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $168.5 million to HONEYWELL SAFETY PRODUCTS USA, INC. for work described as: ACQUISITION OF N95 MASKS FOR COVID-19 RESPONSE Key points: 1. The contract aimed to secure critical N95 masks during a national health emergency. 2. Awarded to a single vendor, Honeywell Safety Products USA, Inc., raising questions about competition. 3. The firm fixed-price contract type suggests a defined cost structure, but actual value needs benchmarking. 4. The duration of the contract (650 days) indicates a sustained need for these supplies. 5. The acquisition was part of a broader federal effort to procure medical supplies for the pandemic. 6. The contract's value is significant, reflecting the urgent demand and scale of the response.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data and comparisons to other pandemic-era mask procurements. The total award of $168.5 million for N95 masks during the COVID-19 response indicates a substantial investment. However, the lack of detailed pricing information and comparison to similar large-scale procurements makes a definitive value-for-money assessment difficult. The firm fixed-price structure provides some cost certainty, but the overall price paid per mask relative to market conditions at the time requires further analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the data indicates only one awardee, Honeywell Safety Products USA, Inc. The number of bidders and the specific details of the competitive process are not provided, which limits a thorough assessment of the competition dynamics. A robust competition typically involves several responsive bids to ensure the government receives the best value.

Taxpayer Impact: While full and open competition was the stated method, the concentration of the award to a single entity warrants scrutiny to ensure taxpayer funds were used efficiently and competitively.

Public Impact

Frontline healthcare workers and first responders received essential N95 masks, crucial for their safety. The acquisition directly supported the national response to the COVID-19 pandemic. The masks were distributed across various healthcare facilities and potentially public health initiatives. The contract ensured a supply chain for a critical piece of personal protective equipment (PPE) during a period of unprecedented demand. The availability of these masks helped mitigate the spread of the virus in healthcare settings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed unit cost data makes it difficult to assess if the price paid was competitive.
The award to a single vendor, despite full and open competition, raises questions about the breadth of the bidding process.
Urgency of the pandemic may have led to premium pricing, impacting overall value for money.
Limited information on distribution and end-use verification makes it hard to confirm full utilization of funds.

Positive Signals

Successful procurement of a critical supply (N95 masks) during a national emergency.
Awarded under a full and open competition framework, indicating an attempt at broad market engagement.
Firm fixed-price contract type provides cost certainty for the government.
Contract duration suggests a sustained effort to meet ongoing demand.

Sector Analysis

The healthcare sector, particularly during the COVID-19 pandemic, saw massive surges in demand for medical supplies. This contract falls within the Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers category. The market for N95 respirators is typically characterized by specialized manufacturers and distributors. During the pandemic, the market experienced extreme volatility due to unprecedented demand, supply chain disruptions, and increased government intervention. Comparable spending benchmarks would likely show a significant increase in procurement costs for such items during the peak of the crisis.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. The focus was on securing a large volume of N95 masks, likely prioritizing established manufacturers and distributors capable of meeting the scale of demand during the emergency.

Oversight & Accountability

Oversight for this contract would fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms likely included contract performance monitoring, financial audits, and potentially reviews by the HHS Office of Inspector General (OIG) to ensure compliance and proper use of funds. Transparency is generally facilitated through contract databases like FPDS, though detailed operational oversight specifics are often internal.

Related Government Programs

COVID-19 Pandemic Response
Strategic National Stockpile
Personal Protective Equipment (PPE) Procurement
Medical Supplies Acquisition

Risk Flags

Potential for inflated pricing due to emergency demand.
Limited visibility into the number of actual bidders despite 'full and open competition'.
Lack of detailed unit cost data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $168.5 million to HONEYWELL SAFETY PRODUCTS USA, INC.. ACQUISITION OF N95 MASKS FOR COVID-19 RESPONSE

Who is the contractor on this award?

The obligated recipient is HONEYWELL SAFETY PRODUCTS USA, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $168.5 million.

What is the period of performance?

Start: 2020-03-21. End: 2021-12-31.

What was the specific unit cost of the N95 masks procured under this contract?

The provided data does not include the specific unit cost of the N95 masks. The total award amount is $168,504,207.28 for an unspecified quantity of masks over a period of 650 days. To determine the unit cost, the total number of masks procured would be needed. Without this quantity, a precise unit cost cannot be calculated. This information is crucial for benchmarking against market rates and assessing the value for money achieved in this significant procurement.

How many bids were received for this 'full and open competition' contract?

The data indicates that the contract was awarded under 'FULL AND OPEN COMPETITION,' suggesting that multiple vendors were eligible to bid. However, the specific number of bids received is not detailed in the provided summary. While the competition type implies an open process, the fact that the award went to a single entity, HONEYWELL SAFETY PRODUCTS USA, INC., raises questions about the level of actual competition. Further investigation into the solicitation details would be required to ascertain the number of proposals submitted and the reasons for selecting a single awardee.

How does the total contract value of $168.5 million compare to typical pre-pandemic spending on N95 masks by the government?

The total contract value of $168.5 million for N95 masks is exceptionally high when compared to typical pre-pandemic government spending on such items. Before the COVID-19 pandemic, the demand for N95 masks was primarily driven by healthcare facilities for routine use and specific occupational safety requirements, not widespread public health emergencies. Annual government spending on N95 masks would have been a fraction of this amount, likely in the millions rather than hundreds of millions. The dramatic increase reflects the unprecedented demand, supply chain pressures, and potentially inflated prices during the global health crisis.

What was the track record of Honeywell Safety Products USA, Inc. in supplying medical equipment to the government prior to this contract?

Honeywell Safety Products USA, Inc. has a history of supplying safety and protective equipment, including respiratory protection, to various government agencies. While specific details of their pre-pandemic contract history with HHS or other federal entities are not provided in this summary, Honeywell is a well-established manufacturer in the safety industry. Their capacity to produce and distribute large quantities of N95 masks was likely a key factor in their selection during the urgent COVID-19 response. Assessing their track record would involve reviewing past performance on similar government contracts, including delivery timeliness, quality, and pricing.

Were there any performance issues or contract modifications during the execution of this contract?

The provided summary data does not contain information regarding performance issues or contract modifications for this specific contract. The data includes the award amount, dates, contractor, and agency, but not the detailed contract performance history. To assess performance issues or modifications, one would need to consult the contract's official file, including any amendments, delivery reports, and correspondence between the government and Honeywell Safety Products USA, Inc. Such details are typically found in more comprehensive contract management systems or agency records.

What was the geographic distribution of the N95 masks procured under this contract?

The provided data indicates the state associated with the contractor is 'RHODE ISLAND' (SN: RI), but it does not specify the geographic distribution of the N95 masks procured. Given the nature of the contract – a national COVID-19 response – it is highly probable that the masks were intended for distribution across the United States to healthcare facilities, emergency responders, and potentially other critical infrastructure sites. The exact allocation and distribution points would likely have been managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75A50120R00008

Offers Received: 62

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell International Inc

Address: 900 DOUGLAS PIKE, SMITHFIELD, RI, 02917

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: $168,504,207

Exercised Options: $168,504,207

Current Obligation: $168,504,207

Actual Outlays: $168,504,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline