HHS Awards $50.7M Other Transaction for PPE Sustainment, Boosting Nitrile Rubber Production

Contract Overview

Contract Amount: $50,679,329 ($50.7M)

Contractor: Advanced Technology International

Awarding Agency: Department of Health and Human Services

Start Date: 2024-01-12

End Date: 2027-04-11

Contract Duration: 1,185 days

Daily Burn Rate: $42.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OTHER TRANSACTION: SUSTAINMENT OF PPE CAPACITIES - NITRILE BUTADIENE RUBBER

Place of Performance

Location: SUMMERVILLE, BERKELEY County, SOUTH CAROLINA, 29486

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $50.7 million to ADVANCED TECHNOLOGY INTERNATIONAL for work described as: OTHER TRANSACTION: SUSTAINMENT OF PPE CAPACITIES - NITRILE BUTADIENE RUBBER Key points: 1. The contract focuses on sustaining Personal Protective Equipment (PPE) capacities, specifically nitrile butadiene rubber. 2. Advanced Technology International (ATI) is the contractor, indicating a potential focus on specialized or innovative solutions. 3. The award is a Delivery Order under an Other Transaction agreement, suggesting a flexible and potentially faster acquisition process. 4. The sector is Biological Product Manufacturing, highlighting its importance in public health preparedness.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar Other Transaction agreements for manufacturing sustainment is difficult due to the unique nature of OTAs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the use of an Other Transaction agreement might limit the pool of potential bidders compared to traditional FAR-based contracts.

Taxpayer Impact: The $50.7 million award aims to ensure critical PPE supply chains, potentially saving taxpayer money in the long run by preventing shortages and emergency procurement costs.

Public Impact

Ensures continued domestic production of essential nitrile butadiene rubber for PPE. Supports national health security by strengthening the PPE supply chain. The award could lead to job creation in the biological product manufacturing sector. Contributes to the readiness of healthcare systems for future public health emergencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
Other Transaction Agreements can have less stringent oversight than FAR-based contracts.
Long contract duration (over 3 years) increases risk of cost escalation.

Positive Signals

Awarded under full and open competition.
Focuses on critical national security need (PPE sustainment).
Contractor is Advanced Technology International, potentially indicating specialized expertise.

Sector Analysis

This award falls within the Biological Product (except Diagnostic) Manufacturing sector, crucial for national health security and pandemic preparedness. Spending benchmarks for Other Transaction Agreements in this specific niche are not readily available, but the amount is significant for sustainment activities.

Small Business Impact

The data indicates the prime contractor is Advanced Technology International, and there is no explicit mention of small business participation in this specific award. Further analysis would be needed to determine if small businesses are involved as subcontractors.

Oversight & Accountability

While awarded under an Other Transaction Agreement, the use of full and open competition suggests a degree of transparency. However, the specific oversight mechanisms for OTAs, especially Cost Plus Fixed Fee arrangements, require careful monitoring to ensure cost efficiency and accountability.

Related Government Programs

Biological Product (except Diagnostic) Manufacturing
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for cost overruns.
Limited visibility into subcontractor performance.
Reliance on a single contractor for critical sustainment.
Long contract duration increases risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $50.7 million to ADVANCED TECHNOLOGY INTERNATIONAL. OTHER TRANSACTION: SUSTAINMENT OF PPE CAPACITIES - NITRILE BUTADIENE RUBBER

Who is the contractor on this award?

The obligated recipient is ADVANCED TECHNOLOGY INTERNATIONAL.

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 $50.7 million.

What is the period of performance?

Start: 2024-01-12. End: 2027-04-11.

What is the specific justification for using an Other Transaction Agreement instead of a traditional FAR-based contract for this sustainment effort?

Other Transaction Agreements (OTAs) are often used by government agencies to rapidly prototype, research, develop, or produce systems and capabilities, particularly in areas requiring specialized expertise or non-traditional approaches. For PPE sustainment, an OTA might have been chosen to expedite the process, leverage unique industry partnerships like ATI, or provide greater flexibility in contract terms compared to standard procurement regulations. This allows for quicker adaptation to evolving needs in critical supply chains.

How will the Cost Plus Fixed Fee structure be managed to prevent potential cost overruns and ensure value for taxpayer money?

Effective management of a Cost Plus Fixed Fee (CPFF) contract requires robust government oversight. This includes detailed monitoring of the contractor's incurred costs, regular audits, and clear performance metrics tied to the fixed fee. The government should establish stringent reporting requirements and conduct thorough reviews of all expenditures to ensure they are reasonable, allocable, and necessary for fulfilling the contract's objectives. Proactive communication and negotiation with the contractor are also key to controlling costs.

What are the key performance indicators (KPIs) for this contract, and how will they be measured to ensure the sustainment of PPE capacities is effective?

Key performance indicators for this contract would likely focus on the consistent availability and quality of nitrile butadiene rubber, production output levels meeting specified targets, and adherence to delivery schedules. Effectiveness will be measured by the contractor's ability to maintain and potentially increase production capacity as needed, respond to surges in demand, and meet all quality control standards for PPE manufacturing. Regular performance reviews and site visits by the government will be crucial for monitoring these KPIs.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 315 SIGMA DR, SUMMERVILLE, SC, 29486

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

Financial Breakdown

Contract Ceiling: $50,679,329

Exercised Options: $50,679,329

Current Obligation: $50,679,329

Actual Outlays: $339,095

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75A50123D00003

IDV Type: IDC

Timeline