HHS awards $139M for Lab Testing Kits to Life Technologies Corporation

Contract Overview

Contract Amount: $139,111,088 ($139.1M)

Contractor: Life Technologies Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2020-05-07

End Date: 2020-07-06

Contract Duration: 60 days

Daily Burn Rate: $2.3M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PROCUREMENT OF LAB TESTING KITS

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92008

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $139.1 million to LIFE TECHNOLOGIES CORPORATION for work described as: PROCUREMENT OF LAB TESTING KITS Key points: 1. Significant award value of $139.1 million for essential lab testing kits. 2. Sole-source procurement raises questions about price discovery and competition. 3. Short contract duration (60 days) suggests an urgent need or specific project. 4. The sector is In-Vitro Diagnostic Substance Manufacturing, critical for public health.

Value Assessment

Rating: questionable

The contract value of $139.1 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts for lab testing kits.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition on a $139 million contract likely results in a higher cost to taxpayers than if it had been competitively bid.

Public Impact

Ensures availability of critical lab testing kits during a period of high demand. Supports the Department of Health and Human Services' preparedness and response efforts. Potential for increased costs to taxpayers due to sole-source award. Highlights reliance on a single vendor for essential medical supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Short contract duration

Positive Signals

Addresses critical need for lab testing kits
Supports public health response

Sector Analysis

The In-Vitro Diagnostic Substance Manufacturing sector is vital for public health infrastructure, especially during health crises. Spending benchmarks are difficult to establish without competitive data for this specific sole-source award.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement. The sole-source nature of the award may limit opportunities for small business participation.

Oversight & Accountability

The award was made by the Office of Assistant Secretary for Preparedness and Response (ASPR), suggesting it was part of a critical response effort. Further oversight would focus on the justification for the sole-source award and post-award cost management.

Related Government Programs

In-Vitro Diagnostic Substance Manufacturing
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in price discovery
Short contract duration may indicate rushed procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $139.1 million to LIFE TECHNOLOGIES CORPORATION. PROCUREMENT OF LAB TESTING KITS

Who is the contractor on this award?

The obligated recipient is LIFE TECHNOLOGIES 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 $139.1 million.

What is the period of performance?

Start: 2020-05-07. End: 2020-07-06.

What was the specific justification for awarding this contract on a sole-source basis, especially given the significant value?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. For critical items like lab testing kits during a public health emergency, this could be due to unique capabilities, proprietary technology, or urgent, unavoidable needs that preclude competitive solicitation. Detailed documentation from ASPR would be required to confirm the exact rationale.

How does the $139 million cost compare to the typical market price for similar lab testing kits, considering the lack of competition?

Without competitive bidding, a direct comparison to market prices is challenging. The absence of competition means there was no market pressure to drive down costs. To assess value, one would need to benchmark against historical contracts for similar kits, analyze the vendor's pricing structure, and consider any unique specifications or urgency that might justify a premium. The $139 million figure represents the total obligated amount, and the actual cost per kit is key.

What measures were in place to ensure the effectiveness and quality of the lab testing kits provided under this sole-source contract?

Even with sole-source awards, government contracts typically include stringent quality assurance clauses, performance standards, and inspection requirements. For medical supplies, adherence to FDA regulations and specific performance metrics would be crucial. The contract type (Firm Fixed Price) implies the contractor is responsible for delivering the specified kits at the agreed price, with quality being a key deliverable.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thermo Electron Corporation (UEI: 001408673)

Address: 5781 VAN ALLEN WAY, CARLSBAD, CA, 92008

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: $139,111,088

Exercised Options: $139,111,088

Current Obligation: $139,111,088

Actual Outlays: $138,868,152

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline