HHS awards $4.67M contract for OTC COVID-19 tests to Access Bio, Inc

Contract Overview

Contract Amount: $46,750,000 ($46.8M)

Contractor: Access BIO, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-13

End Date: 2023-05-26

Contract Duration: 74 days

Daily Burn Rate: $631.8K/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 OVER THE COUNTER (OTC) COVID-19 TESTS.

Place of Performance

Location: SOMERSET, SOMERSET County, NEW JERSEY, 08873

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $46.8 million to ACCESS BIO, INC. for work described as: THE PURPOSE OF THIS CONTRACT IS TO PROCURE OVER THE COUNTER (OTC) COVID-19 TESTS. Key points: 1. Contract awarded for essential public health supplies, addressing immediate needs. 2. Sole-source award raises questions about competition and potential cost savings. 3. Short contract duration suggests a specific, time-sensitive procurement. 4. Focus on over-the-counter tests indicates a shift towards consumer-level access. 5. Geographic concentration in New Jersey for the contractor. 6. No small business set-aside noted, potentially limiting broader economic impact.

Value Assessment

Rating: fair

The contract value of $4.67 million for OTC COVID-19 tests appears reasonable for a sole-source award. However, without competitive bidding, it is difficult to benchmark against market rates or assess if the government secured the best possible price. The contract's value is relatively small in the context of overall federal pandemic preparedness spending, suggesting it may be for a specific, limited quantity or a pilot program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Access Bio, Inc., was solicited. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified suppliers. While sole-source awards can be justified in specific circumstances, such as urgent needs or when only one vendor possesses the required capability, they generally lead to less price discovery and potentially higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost efficiencies that typically arise from a bidding process. This could result in a higher price paid per unit than if multiple companies had competed for the contract.

Public Impact

The public benefits from increased availability of over-the-counter COVID-19 tests, aiding in personal health monitoring and disease management. Services delivered include the procurement and likely distribution of diagnostic test kits. The geographic impact is primarily centered around the contractor's location in New Jersey. Workforce implications are minimal for this specific contract, likely involving manufacturing and logistics personnel at Access Bio, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification process.
Short contract duration may indicate a reactive procurement rather than strategic planning.

Positive Signals

Addresses a critical public health need by procuring essential diagnostic tools.
Contract awarded to a company with relevant manufacturing capabilities in the diagnostics sector.
Definitive contract structure provides a clear framework for the transaction.

Sector Analysis

The procurement of in-vitro diagnostic substances falls within the broader healthcare and biotechnology sector. This contract specifically addresses the market for over-the-counter diagnostic tests, a segment that saw significant growth and demand during the COVID-19 pandemic. While the contract value is modest, it represents a component of the government's ongoing efforts to ensure the availability of critical medical supplies. Comparable spending benchmarks would typically involve analyzing other government contracts for similar diagnostic test kits, considering factors like volume, type of test, and procurement method.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses. Consequently, the direct impact on the small business ecosystem is likely minimal. The focus remains on the prime contractor, Access Bio, Inc., which is a publicly traded company. Future procurements could explore opportunities for small business participation through set-asides or by encouraging prime contractors to engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the justification for the sole-source award would be a key area for assessment. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise during the contract's performance or closeout.

Related Government Programs

COVID-19 Testing Procurement
Public Health Emergency Supplies
Diagnostic Test Kit Contracts
HHS Medical Supply Acquisitions

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
Limited transparency on specific procurement rationale.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $46.8 million to ACCESS BIO, INC.. THE PURPOSE OF THIS CONTRACT IS TO PROCURE OVER THE COUNTER (OTC) COVID-19 TESTS.

Who is the contractor on this award?

The obligated recipient is ACCESS BIO, INC..

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 $46.8 million.

What is the period of performance?

Start: 2023-03-13. End: 2023-05-26.

What is the specific justification provided by HHS for awarding this contract on a sole-source basis to Access Bio, Inc.?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data snippet. Typically, sole-source awards are justified under circumstances such as urgent and compelling needs where only one responsible source can reasonably provide the supplies or services, or when a unique capability is required that only one contractor possesses. Without further documentation from HHS, such as a Justification and Approval (J&A) document, the precise rationale remains unclear. This lack of competition raises concerns about whether the government explored all available options to secure the best value for taxpayer dollars.

How does the unit cost of these OTC COVID-19 tests compare to similar contracts awarded by the government or to market rates?

The provided data does not include the quantity of tests procured under this $4.67 million contract, making it impossible to calculate a per-unit cost. Therefore, a direct comparison to similar contracts or market rates cannot be performed. To assess value for money, the number of tests purchased would be essential. If this contract was for a significant volume, the absence of competitive bidding could mean a higher per-unit cost than if multiple suppliers had vied for the contract. Benchmarking would require knowing the specific type of test (e.g., rapid antigen, molecular) and the quantity procured.

What is Access Bio, Inc.'s track record in supplying diagnostic tests to the federal government, particularly for public health emergencies?

Access Bio, Inc. is a manufacturer of in-vitro diagnostic products. While the provided data confirms they are the recipient of this specific contract for OTC COVID-19 tests, it does not detail their broader historical performance or track record with the federal government. To assess their reliability and past performance, a review of federal procurement databases (like SAM.gov) for previous contracts, contract performance evaluations (e.g., CPARS), and any history of issues or successes in delivering critical supplies would be necessary. Their involvement in supplying COVID-19 tests suggests some level of capability relevant to public health needs.

What are the potential risks associated with a sole-source award for essential medical supplies like COVID-19 tests?

The primary risk associated with a sole-source award for essential medical supplies is the potential for inflated pricing due to the lack of competition. Without multiple bidders driving down costs, the government may pay a premium. Another risk is reduced innovation and responsiveness, as the sole provider may face less pressure to improve product quality or delivery times. Furthermore, sole-source awards can limit the government's flexibility if the chosen contractor encounters production issues or fails to meet delivery schedules, as there are no immediate alternative suppliers readily available through a competitive framework. This can also raise concerns about fairness and equal opportunity for other potential suppliers.

How does this contract fit into the broader federal strategy for COVID-19 preparedness and response?

This contract for OTC COVID-19 tests appears to be a component of the federal government's ongoing strategy to ensure the availability of diagnostic tools to the public. Procuring over-the-counter tests supports decentralized testing efforts, allowing individuals to monitor their health status readily. The relatively modest value of this specific contract ($4.67 million) suggests it might be for a targeted need, a specific phase of distribution, or supplementary to larger, pre-existing agreements. It reflects a continued commitment to managing the pandemic by providing accessible testing solutions, complementing other federal initiatives related to vaccines, therapeutics, and public health guidance.

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

Address: SUITE A, SOMERSET, NJ, 08873

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,750,000

Exercised Options: $46,750,000

Current Obligation: $46,750,000

Actual Outlays: $46,750,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline