HHS/ASPR awards $174M for COVID-19 rapid testing kits to Abbott Rapid Dx North America LLC

Contract Overview

Contract Amount: $174,354,404 ($174.4M)

Contractor: Abbott Rapid DX North America LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-06-04

End Date: 2021-01-02

Contract Duration: 212 days

Daily Burn Rate: $822.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HH/ASPR HAS A REQUIREMENT TO PURCHASE ID NOWTM COVID-19 RAPID TESTING KITS

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $174.4 million to ABBOTT RAPID DX NORTH AMERICA LLC for work described as: HH/ASPR HAS A REQUIREMENT TO PURCHASE ID NOWTM COVID-19 RAPID TESTING KITS Key points: 1. Contract awarded for essential COVID-19 rapid testing kits. 2. Sole-source award raises questions about competition and potential cost savings. 3. Contract duration of 212 days suggests a short-term need. 4. The award represents a significant investment in public health preparedness. 5. Geographic focus on Georgia (GA) for distribution. 6. Firm-fixed-price contract type provides cost certainty.

Value Assessment

Rating: fair

The total award of $174,354,404 for ID NOW COVID-19 rapid testing kits appears substantial. Without specific unit pricing or comparison data for similar rapid test procurements during the pandemic, it is difficult to definitively benchmark value. However, given the urgency and scale of the pandemic, the government likely sought to secure a large quantity of tests quickly. The firm-fixed-price structure offers predictability but may not reflect the lowest possible price if competition had been more robust.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Abbott Rapid Dx North America LLC, was solicited. This approach is typically used when there is a lack of competition or a critical need that cannot be met through a competitive process. The absence of multiple bidders means that price discovery through market forces was not utilized, potentially leading to a higher cost than if multiple companies had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition. A sole-source award bypasses the opportunity to leverage competitive bidding to secure the best possible price for these essential testing kits.

Public Impact

The primary beneficiaries are public health initiatives and individuals requiring rapid COVID-19 testing. Services delivered include the provision of critical diagnostic tools for pandemic response. Geographic impact is focused on distribution within Georgia (GA). Workforce implications are indirect, supporting the healthcare sector's testing capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Potential for overpayment without competitive benchmarking.
Limited transparency into the justification for sole-source procurement.

Positive Signals

Secured a large quantity of essential testing kits.
Firm-fixed-price contract provides budget certainty.
Rapid procurement likely addressed an urgent public health need.

Sector Analysis

The procurement of COVID-19 rapid testing kits falls within the broader healthcare and medical supplies sector. This sector is characterized by high demand, particularly during public health emergencies, and involves numerous manufacturers and distributors. The market size for diagnostic testing surged dramatically with the pandemic. This contract represents a significant, albeit short-term, investment by the government to bolster testing capabilities, fitting within the overall federal strategy to combat the virus.

Small Business Impact

This contract does not appear to involve small business set-asides, as the awardee is a large corporation. There is no information provided regarding subcontracting plans that would specifically benefit small businesses. Therefore, the direct impact on the small business ecosystem from this particular award is likely minimal.

Oversight & Accountability

Oversight of this contract would typically fall under the Department of Health and Human Services (HHS) and its Office of the Assistant Secretary for Preparedness and Response (ASPR). Accountability measures are inherent in the contract terms, particularly the firm-fixed-price structure. Transparency regarding the justification for the sole-source award would be crucial for public assessment, though details may be limited due to procurement sensitivities.

Related Government Programs

COVID-19 Testing Supplies
Public Health Emergency Response
Medical Equipment Procurement
Diagnostic Test Kits

Risk Flags

Sole-source award may indicate limited competition.
Lack of detailed cost breakdown hinders value assessment.
Geographic limitation (GA) may not reflect national distribution needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $174.4 million to ABBOTT RAPID DX NORTH AMERICA LLC. HH/ASPR HAS A REQUIREMENT TO PURCHASE ID NOWTM COVID-19 RAPID TESTING KITS

Who is the contractor on this award?

The obligated recipient is ABBOTT RAPID DX NORTH AMERICA LLC.

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 $174.4 million.

What is the period of performance?

Start: 2020-06-04. End: 2021-01-02.

What was the specific justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For critical medical supplies during a pandemic, this could be due to exclusive manufacturing rights, unique technological capabilities, or an urgent need that precludes a competitive solicitation process. The specific justification would be documented by HHS/ASPR in accordance with federal acquisition regulations (FAR). Without access to that documentation, the precise reason remains speculative, but it likely centers on the urgency and the specific nature of the ID NOWTM testing kits.

How does the unit cost of these testing kits compare to other rapid COVID-19 tests procured by the government or other entities?

Benchmarking the unit cost is challenging without specific data on the price per test kit. The total award of $174,354,404 for an unspecified number of kits makes direct comparison difficult. Generally, rapid antigen tests varied in price during the pandemic based on manufacturer, technology, and volume. Sole-source awards, by their nature, do not benefit from competitive pricing. To assess value, one would need to compare the price per test to similar Abbott ID NOWTM kits procured competitively or to other rapid tests of comparable sensitivity and specificity acquired by federal agencies or state/local governments during the same period.

What is the track record of Abbott Rapid Dx North America LLC in fulfilling government contracts, particularly for medical supplies?

Abbott Laboratories, the parent company of Abbott Rapid Dx North America LLC, has a significant history of supplying medical devices and diagnostics to various government agencies, including the Department of Defense and HHS. Their track record generally involves large-scale production and distribution capabilities. During the COVID-19 pandemic, Abbott was a major player in providing testing solutions. Assessing their specific performance on this contract would require reviewing delivery timelines, quality control reports, and any contract modifications or disputes that may have arisen during its execution.

What were the key performance indicators (KPIs) for this contract, and how was performance measured?

While specific KPIs are not detailed in the provided data, typical performance metrics for such contracts would include timely delivery of the correct quantity and type of testing kits, adherence to quality standards, and potentially reporting requirements related to distribution or usage. The firm-fixed-price nature implies that Abbott was obligated to deliver the specified goods within the agreed timeframe and quality parameters. Performance would be monitored by the contracting officer's representative (COR) at HHS/ASPR, with acceptance of goods contingent upon meeting contractual requirements.

What is the historical spending pattern for COVID-19 rapid testing kits by HHS/ASPR?

HHS/ASPR, along with other federal agencies like the Department of Defense (DoD) and the Federal Emergency Management Agency (FEMA), engaged in substantial spending on COVID-19 testing supplies throughout the pandemic. Spending patterns varied significantly based on the stage of the pandemic, the availability of different testing technologies (PCR vs. rapid antigen), and evolving public health strategies. Early in the pandemic, there were significant investments in securing initial supplies, followed by ongoing procurements to maintain testing capacity. This $174 million award represents one component of a much larger federal investment in diagnostic testing.

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: INSTRUMENTS AND LABORATORY EQPT

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: Abbott Laboratories

Address: 30 S KELLER RD STE 100, ORLANDO, FL, 32810

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

Financial Breakdown

Contract Ceiling: $174,354,404

Exercised Options: $174,354,404

Current Obligation: $174,354,404

Actual Outlays: $174,354,404

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline