HHS Awards $90.6M for OTC COVID-19 Tests to Roche Diagnostics

Contract Overview

Contract Amount: $90,622,720 ($90.6M)

Contractor: Roche Diagnostics Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2022-12-07

End Date: 2023-03-30

Contract Duration: 113 days

Daily Burn Rate: $802.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE PURPOSE OF THIS CONTRACT IS TO PROCURE THE PROCUREMENT OF OVER THE COUNTER (OTC) COVID-19 TESTS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46250

State: Indiana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $90.6 million to ROCHE DIAGNOSTICS CORPORATION for work described as: THE PURPOSE OF THIS CONTRACT IS TO PROCURE THE PROCUREMENT OF OVER THE COUNTER (OTC) COVID-19 TESTS Key points: 1. Significant investment in essential public health supplies. 2. Sole-source award raises questions about price discovery and competition. 3. Short contract duration suggests urgent need or specific project. 4. Focus on 'In-Vitro Diagnostic Substance Manufacturing' indicates specialized procurement.

Value Assessment

Rating: questionable

The contract value of $90.6M for OTC COVID-19 tests is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar procurements or potential alternatives.

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 may result in a higher cost to taxpayers than if multiple vendors had competed.

Taxpayer Impact: The lack of competition for a large procurement like this could lead to suboptimal pricing, impacting the efficient use of taxpayer funds.

Public Impact

Ensures availability of critical COVID-19 testing supplies for the public. Potential for higher costs due to sole-source nature impacts overall public health budget. Reliance on a single vendor could pose supply chain risks if issues arise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Procurement of essential health supplies
Addresses a critical public health need

Sector Analysis

The procurement falls under the healthcare sector, specifically related to diagnostic substances. Benchmarks for similar large-scale procurements of medical supplies can vary widely based on product type, volume, and market conditions.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as the 'sb' field is false. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The award was made by the Department of Health and Human Services, Office of Assistant Secretary for Preparedness and Response, suggesting oversight from a relevant federal agency. However, the sole-source nature warrants scrutiny.

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 limits competition.
Potential for inflated pricing.
Lack of transparency in price discovery.
Dependency on a single supplier.
Short contract duration may indicate rushed procurement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $90.6 million to ROCHE DIAGNOSTICS CORPORATION. THE PURPOSE OF THIS CONTRACT IS TO PROCURE THE PROCUREMENT OF OVER THE COUNTER (OTC) COVID-19 TESTS

Who is the contractor on this award?

The obligated recipient is ROCHE DIAGNOSTICS 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 $90.6 million.

What is the period of performance?

Start: 2022-12-07. End: 2023-03-30.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further documentation, it's unclear why competition was bypassed. Exploring competitive options, even for specialized items, is crucial for ensuring best value and taxpayer protection.

How does the unit cost of these OTC COVID-19 tests compare to market rates or previous government procurements?

Assessing the unit cost is challenging without a per-unit price benchmark. Given the sole-source nature, it's imperative to compare this contract's pricing against publicly available market data for similar tests or analyze historical government purchase prices to identify potential overspending.

What measures are in place to ensure the quality and timely delivery of tests from Roche Diagnostics under this contract?

Standard contract clauses likely address quality control and delivery schedules. However, the short duration and sole-source award necessitate close monitoring by ASPR to ensure performance standards are met and that any potential supply chain disruptions are proactively managed.

Industry Classification

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

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

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: Genmark Diagnostics Inc.

Address: 9115 HAGUE RD, INDIANAPOLIS, IN, 46256

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $90,622,720

Exercised Options: $90,622,720

Current Obligation: $90,622,720

Actual Outlays: $90,622,720

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline