HHS awarded $172.8M for N95 masks, with 59 contracts and a 681-day duration
Contract Overview
Contract Amount: $172,797,704 ($172.8M)
Contractor: 3M Company
Awarding Agency: Department of Health and Human Services
Start Date: 2020-03-21
End Date: 2022-01-31
Contract Duration: 681 days
Daily Burn Rate: $253.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 59
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: N95 MASKS COVID-19
Place of Performance
Location: ATLANTA, DEKALB County, GEORGIA, 30341
State: Georgia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $172.8 million to 3M COMPANY for work described as: N95 MASKS COVID-19 Key points: 1. The contract utilized a firm-fixed-price structure, aiming for cost certainty. 2. Competition was open, suggesting a potentially competitive pricing environment. 3. The contract duration of 681 days indicates a sustained need for the supplies. 4. The primary contractor, 3M Company, is a major player in the medical supply sector. 5. The award was made under the MAS (GSA Schedule) vehicle, often used for efficient procurement. 6. The geographic location of the award was Georgia.
Value Assessment
Rating: good
Benchmarking the value of this contract is challenging without specific unit pricing and market data from the period. However, the firm-fixed-price nature suggests an attempt to control costs. The scale of the award indicates a significant volume purchase, which typically allows for better negotiation of unit prices. Comparing it to other large-scale N95 mask procurements during the COVID-19 pandemic would provide further context on its value-for-money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 59 individual awards suggests a broad solicitation and a potentially robust bidding process. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that the government is not overpaying for essential supplies like N95 masks.
Public Impact
Healthcare providers and frontline workers received essential N95 masks, crucial for protection during the COVID-19 pandemic. The procurement supported the national stockpile and public health infrastructure. The geographic impact was primarily in Georgia, where the contract was managed or fulfilled. The contract likely supported jobs within the medical supply manufacturing and distribution sectors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price fluctuations if market conditions changed significantly during the contract's long duration.
- Reliance on a single primary contractor (3M Company) for a large portion of the supply could pose a risk if their production or distribution was disrupted.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- Awarded under GSA MAS, a streamlined procurement vehicle.
- Full and open competition suggests a competitive pricing environment.
Sector Analysis
This contract falls within the Healthcare sector, specifically related to medical supplies and equipment. The market for N95 masks saw unprecedented demand and volatility during the COVID-19 pandemic. Government procurements of this nature are critical for ensuring national health security and supporting healthcare systems. Comparable spending benchmarks would involve looking at other large federal and state procurements of personal protective equipment (PPE) during the same period.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While the primary contractor is a large entity, the broad competition under the GSA MAS vehicle may have allowed for small business participation as subcontractors or through other contract vehicles. Further analysis would be needed to determine the extent of small business involvement.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). As a GSA MAS contract, it also adheres to GSA's procurement regulations. Transparency is generally provided through contract award databases like FPDS. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- COVID-19 Pandemic Response Supplies
- Strategic National Stockpile
- Personal Protective Equipment (PPE) Procurement
- GSA Federal Supply Schedule Contracts
Risk Flags
- High volume procurement during a national emergency.
- Potential for price volatility in the PPE market during the contract period.
- Reliance on a single large manufacturer for a critical supply.
Tags
healthcare, hhs, medical-dental-hospital-equipment-and-supplies-merchant-wholesalers, definitive-contract, large-contract, full-and-open-competition, firm-fixed-price, gsa-schedule, georgia, covid-19-response, n95-masks, personal-protective-equipment
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $172.8 million to 3M COMPANY. N95 MASKS COVID-19
Who is the contractor on this award?
The obligated recipient is 3M COMPANY.
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 $172.8 million.
What is the period of performance?
Start: 2020-03-21. End: 2022-01-31.
What was the average unit price paid for N95 masks under this contract, and how does it compare to market rates during the pandemic?
The provided data does not include the average unit price paid for N95 masks. To determine this, one would need to access the individual award details or contract line item numbers (CLINs) associated with the 59 awards. Comparing this to market rates would require accessing historical pricing data from reputable sources or other government procurement databases for similar N95 masks purchased during the same timeframe (March 2020 - January 2022). Given the extreme demand and supply chain disruptions of the COVID-19 pandemic, unit prices for N95 masks varied significantly. A thorough analysis would involve calculating the weighted average unit price based on quantities and prices across all 59 awards and then benchmarking this against prevailing market prices, considering factors like mask type, manufacturer, and certification.
What is the track record of 3M Company in fulfilling large government contracts, particularly for medical supplies?
3M Company has a long and extensive history of supplying a wide range of products to the U.S. government, including significant contributions in the medical and defense sectors. They are a well-established manufacturer of N95 respirators and other personal protective equipment (PPE). During the COVID-19 pandemic, 3M was a primary supplier of N95 masks to federal agencies, state governments, and healthcare systems globally. While they have a strong track record, they also faced scrutiny and challenges related to production capacity, pricing, and allocation of masks during the peak of the pandemic. Analyzing their past performance on similar large-scale, time-sensitive procurements, including any reported issues or successes, would provide a comprehensive view of their capabilities and reliability.
How did the firm-fixed-price (FFP) contract type influence the pricing and risk allocation for this N95 mask procurement?
A firm-fixed-price (FFP) contract is designed to provide the government with price certainty. Under an FFP contract, the contractor (3M Company, in this case) assumes the primary risk for cost overruns. This means that 3M was obligated to deliver the N95 masks at the agreed-upon price, regardless of their actual costs incurred in production, distribution, or other related expenses. For the government, this structure is advantageous as it locks in the total cost, making budgeting more predictable. However, it can also mean that the initial price might be higher than other contract types to compensate the contractor for the risk they are undertaking. The effectiveness of the FFP in this scenario depends on how accurately 3M estimated its costs and the market conditions at the time of negotiation.
What were the primary drivers for the $172.8 million award value, considering the 59 individual awards and 681-day duration?
The $172.8 million award value is a cumulative total across 59 individual contract actions awarded to 3M Company under the GSA MAS schedule. The primary drivers for this significant value were the unprecedented demand for N95 masks driven by the COVID-19 pandemic and the extended contract duration of 681 days (approximately 22 months). The sustained need for respiratory protection throughout various phases of the pandemic necessitated large-volume purchases over an extended period. The firm-fixed-price nature of the contract meant that the total value represented the agreed-upon cost for delivering these masks over the contract's life. Factors such as the quantity of masks procured, negotiated unit prices, and any associated logistical or handling fees would have contributed to the final aggregate award amount.
What is the significance of the contract being awarded under the GSA MAS (Multiple Award Schedule) program?
Awarding this contract under the GSA Multiple Award Schedule (MAS) program signifies that the procurement utilized an existing, pre-competed contract vehicle. GSA MAS contracts offer a streamlined and efficient way for federal agencies to purchase a wide range of commercial items and services. Contractors on the MAS program have already undergone a rigorous vetting process, and their pricing has been negotiated and deemed fair and reasonable. For this N95 mask procurement, using MAS likely allowed the Department of Health and Human Services (HHS) to acquire the necessary supplies more quickly than through a traditional, open-ended solicitation process. It also provides a framework for consistent pricing and terms across multiple orders placed under the schedule.
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: 59
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3M CENTER, SAINT PAUL, MN, 55144
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: $172,797,704
Exercised Options: $172,797,704
Current Obligation: $172,797,704
Actual Outlays: $172,797,704
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-03-21
Current End Date: 2022-01-31
Potential End Date: 2022-01-31 00:00:00
Last Modified: 2023-10-25
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