HHS awards $217M for face coverings to San Mar Corp. amid pandemic
Contract Overview
Contract Amount: $217,000,000 ($217.0M)
Contractor: SAN MAR Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2020-04-02
End Date: 2020-10-31
Contract Duration: 212 days
Daily Burn Rate: $1.0M/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 8
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: SAN MAR INC. CLOTH FACE COVERINGS
Place of Performance
Location: ISSAQUAH, KING County, WASHINGTON, 98029
Plain-Language Summary
Department of Health and Human Services obligated $217.0 million to SAN MAR CORPORATION for work described as: SAN MAR INC. CLOTH FACE COVERINGS Key points: 1. Significant award of $217M for essential pandemic supplies. 2. Competition method indicates a need for broad market engagement. 3. Risk of supply chain disruption and price volatility is present. 4. Sector is 'Other Cut and Sew Apparel Manufacturing', a non-traditional defense sector.
Value Assessment
Rating: fair
The contract value is substantial, but without specific unit pricing or comparison data, assessing value for money is difficult. The firm fixed price suggests cost certainty, but the overall value depends on the quantity and quality of face coverings delivered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggesting an initial limited approach that was later broadened. This method can impact price discovery by potentially excluding some capable vendors.
Taxpayer Impact: Taxpayer funds are used for essential pandemic supplies. The effectiveness of the competition method in securing competitive pricing is a key factor in the overall taxpayer impact.
Public Impact
Ensures supply of critical personal protective equipment (PPE) during a public health emergency. Supports domestic manufacturing capabilities for essential goods. Potential for price fluctuations based on market demand and material costs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition initially
- Potential for price volatility in a high-demand market
- Dependence on a single contractor for a large quantity
Positive Signals
- Addresses critical need for PPE
- Firm fixed price contract for cost control
- Domestic sourcing
Sector Analysis
The 'Other Cut and Sew Apparel Manufacturing' sector is not typically associated with large federal contracts. This award highlights the government's need to leverage diverse industrial bases during emergencies, potentially at higher costs than specialized manufacturers.
Small Business Impact
The data does not indicate if small businesses were involved in this specific contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The contract was awarded by the Office of Assistant Secretary for Preparedness and Response (ASPR), a key agency for pandemic preparedness. Oversight would focus on delivery timelines, quality control, and adherence to the firm fixed price.
Related Government Programs
- Other Cut and Sew Apparel Manufacturing
- Department of Health and Human Services Contracting
- Office of Assistant Secretary for Preparedness and Response Programs
Risk Flags
- Potential for price gouging in a crisis
- Supply chain vulnerabilities
- Quality control of manufactured goods
- Dependence on a single supplier for a large quantity
Tags
other-cut-and-sew-apparel-manufacturing, department-of-health-and-human-services, wa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $217.0 million to SAN MAR CORPORATION. SAN MAR INC. CLOTH FACE COVERINGS
Who is the contractor on this award?
The obligated recipient is SAN MAR CORPORATION.
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 $217.0 million.
What is the period of performance?
Start: 2020-04-02. End: 2020-10-31.
What was the specific unit cost of the face coverings, and how does it compare to market rates at the time of award?
The provided data does not include the specific unit cost or quantity of face coverings. To assess value, a comparison with prevailing market prices for similar items during the contract period (April-October 2020) would be necessary. This would reveal if the $217 million award represented a fair price for the goods procured.
What were the risks associated with excluding sources initially, and how were they mitigated?
Excluding sources initially can limit competition, potentially leading to higher prices and reduced innovation. Mitigation strategies might include a clear justification for the exclusion, a defined period for potential bidders to respond, and a plan to broaden competition for future needs. The 'after exclusion of sources' phrasing suggests a process was in place to allow for broader participation.
How effective was this contract in meeting the immediate demand for face coverings during the pandemic?
The effectiveness hinges on the timely delivery of the specified quantity and quality of face coverings to meet demand. Without delivery data, it's difficult to assess. However, the large award suggests a significant quantity was procured, likely contributing to the national stockpile or distribution efforts.
Industry Classification
NAICS: Manufacturing › Cut and Sew Apparel Manufacturing › Other Cut and Sew Apparel Manufacturing
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 8
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 22833 SE BLACK NUGGET RD STE 130, ISSAQUAH, WA, 98029
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $217,000,000
Exercised Options: $217,000,000
Current Obligation: $217,000,000
Actual Outlays: $202,858,250
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2020-04-02
Current End Date: 2020-10-31
Potential End Date: 2020-10-31 00:00:00
Last Modified: 2024-06-25
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