HHS awards $141M Other Transaction agreement for N95 mask manufacturing capacity

Contract Overview

Contract Amount: $141,320,194 ($141.3M)

Contractor: Advanced Technology International

Awarding Agency: Department of Health and Human Services

Start Date: 2024-01-12

End Date: 2030-04-11

Contract Duration: 2,281 days

Daily Burn Rate: $62.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: OTHER TRANSACTION: PROCUREMENT AND SUSTAINMENT OF N95 MASK MANUFACTURING CAPACITY UNDER THE BIOMAP-CONSORTIUM.

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 $141.3 million to ADVANCED TECHNOLOGY INTERNATIONAL for work described as: OTHER TRANSACTION: PROCUREMENT AND SUSTAINMENT OF N95 MASK MANUFACTURING CAPACITY UNDER THE BIOMAP-CONSORTIUM. Key points: 1. This agreement focuses on building domestic manufacturing capabilities for N95 masks, a critical need highlighted by recent public health emergencies. 2. The contract utilizes an 'Other Transaction' authority, which allows for more flexible and rapid acquisition of prototypes and production capabilities compared to traditional contracts. 3. The chosen contractor, Advanced Technology International, is a consortium manager, suggesting a network of specialized entities will be involved in fulfilling the agreement. 4. The duration of the agreement extends to April 2030, indicating a long-term strategy for sustained domestic production capacity. 5. The contract type is Cost Plus Fixed Fee, which means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. 6. This initiative aims to reduce reliance on foreign supply chains for essential personal protective equipment.

Value Assessment

Rating: good

The total award amount of $141.3 million for establishing and sustaining N95 mask manufacturing capacity appears reasonable given the strategic importance and long-term nature of the investment. While direct comparisons are difficult due to the unique 'Other Transaction' authority and the specific focus on domestic capacity building, the cost structure (Cost Plus Fixed Fee) allows for flexibility in adapting to evolving manufacturing needs. Benchmarking against traditional procurement for similar large-scale manufacturing infrastructure would be challenging, but the investment aims to secure a critical national asset.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a full and open competition, indicating that multiple entities had the opportunity to bid. The use of an 'Other Transaction' authority for this type of agreement often involves a solicitation process that, while potentially different from FAR-based procurements, aims to identify the best-suited partners for complex or prototype development needs. The specific details of the competition, such as the number of bidders, are not provided, but the 'full and open' designation suggests a broad solicitation.

Taxpayer Impact: A full and open competition, even under OT authority, is generally favorable for taxpayers as it encourages a wider range of innovative solutions and can lead to more competitive pricing through the selection of the most capable and cost-effective provider.

Public Impact

The primary beneficiaries are the American public, who will have increased access to domestically produced N95 masks during public health crises. The agreement will support the establishment and sustainment of advanced manufacturing capabilities for critical personal protective equipment. The geographic impact is national, aiming to build a resilient domestic supply chain across the United States. Workforce implications include potential job creation in advanced manufacturing sectors related to PPE production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee structure requires careful monitoring of costs to ensure they remain reasonable and allocable to the contract objectives.
Reliance on a consortium model, while offering flexibility, necessitates robust oversight to ensure all members are performing effectively and meeting contractual obligations.
The long duration of the contract (until 2030) requires sustained attention to ensure the manufacturing capacity remains relevant and technologically current.

Positive Signals

The use of 'Other Transaction' authority is a positive signal for agility and responsiveness in addressing critical national security needs related to public health.
The 'full and open competition' indicates a commitment to finding the best possible solution through a broad solicitation process.
The focus on building domestic manufacturing capacity directly addresses supply chain vulnerabilities exposed by recent events, enhancing national resilience.

Sector Analysis

This contract falls within the broader healthcare and advanced manufacturing sectors. The market for personal protective equipment (PPE), particularly N95 respirators, has seen significant fluctuations driven by global demand and supply chain disruptions. The government's investment in domestic manufacturing capacity aims to stabilize this market and ensure reliable access to essential supplies, moving away from over-reliance on foreign sources. Comparable spending benchmarks are difficult to establish due to the unique nature of 'Other Transaction' agreements and the strategic goal of capacity building rather than simple procurement.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this 'Other Transaction' agreement. However, as a consortium manager, Advanced Technology International is likely to engage various subcontractors, which could include small businesses. The extent of small business participation will depend on the consortium's structure and subcontracting plans, which are not detailed here. Further analysis would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for 'Other Transaction' agreements can vary but typically involves program managers within the contracting agency (HHS/ASPR in this case) who monitor performance, costs, and adherence to milestones. Accountability is established through the contractual terms and reporting requirements. Transparency may be less than traditional FAR-based contracts, but public reporting on the initiative's progress and outcomes is expected. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Strategic National Stockpile
Biomedical Advanced Research and Development Authority (BARDA) initiatives
National Institutes of Health (NIH) research grants
Defense Production Act purchases

Risk Flags

Long-term sustainment of manufacturing capacity requires ongoing monitoring.
Cost control under CPFF requires diligent oversight.
Reliance on consortium partners necessitates robust management.
Ensuring continued technological relevance of manufacturing processes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $141.3 million to ADVANCED TECHNOLOGY INTERNATIONAL. OTHER TRANSACTION: PROCUREMENT AND SUSTAINMENT OF N95 MASK MANUFACTURING CAPACITY UNDER THE BIOMAP-CONSORTIUM.

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 $141.3 million.

What is the period of performance?

Start: 2024-01-12. End: 2030-04-11.

What is the specific role of Advanced Technology International (ATI) in managing this Other Transaction agreement?

Advanced Technology International (ATI) typically acts as a consortium management firm. In this context, ATI likely manages the solicitation, selection, and oversight of member companies within the BioMAP-Consortium that will perform the actual work related to N95 mask manufacturing capacity. Their role involves facilitating collaboration, managing funds, ensuring compliance, and reporting progress to the Department of Health and Human Services (HHS). ATI's expertise lies in bringing together diverse technical capabilities and managing complex, multi-partner projects, which is crucial for building and sustaining domestic manufacturing infrastructure.

How does the 'Other Transaction' authority differ from traditional federal procurement in this context?

The 'Other Transaction' (OT) authority allows agencies like HHS to enter into agreements that are not subject to the Federal Acquisition Regulation (FAR). This provides greater flexibility in terms of contract structure, negotiation, and administration, enabling faster acquisition of prototypes or production capabilities. Unlike traditional contracts, OTs can be used for research, development, and prototyping, and often involve non-traditional government contractors. For this N95 mask initiative, the OT authority likely facilitated the rapid establishment of a consortium and the flexible scaling of manufacturing capacity, which might have been more cumbersome under a traditional procurement process.

What are the key performance indicators (KPIs) or milestones expected under this agreement?

Specific Key Performance Indicators (KPIs) and milestones for this 'Other Transaction' agreement are not publicly detailed in the provided data. However, based on the objective of 'procurement and sustainment of N95 mask manufacturing capacity,' expected milestones would likely include: achieving specific production volumes of N95 masks, demonstrating adherence to quality standards (e.g., NIOSH certification), establishing and maintaining a certain level of manufacturing readiness, successful technology transfer or process improvement, and potentially maintaining a specified level of domestic supply chain resilience. Regular reporting by ATI to HHS would track progress against these implicit or explicit goals.

What is the potential impact of this investment on the long-term domestic supply chain for N95 masks?

This $141.3 million investment is intended to significantly bolster the long-term domestic supply chain for N95 masks. By funding the 'procurement and sustainment of manufacturing capacity,' the agreement aims to create a stable, reliable source of these critical respirators within the United States. This reduces dependence on foreign manufacturers, mitigating risks associated with global supply chain disruptions, geopolitical instability, or sudden surges in demand during public health emergencies. The sustained capacity should ensure that the nation is better prepared to meet its needs for essential PPE in future crises.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the contractor's incentives and risk?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor (ATI and its consortium members) for all allowable costs incurred in performing the work, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work efficiently, as the fee is fixed regardless of the final cost. However, it places the primary cost risk on the government, as it must cover all legitimate expenses. For the government, effective oversight is crucial to ensure costs are reasonable and allocable. For the contractor, the fixed fee provides a predictable profit margin, while the government bears the uncertainty of final project costs.

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: $141,320,194

Exercised Options: $141,320,194

Current Obligation: $141,320,194

Actual Outlays: $945,573

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