HHS awards $17.4M for Level 3 Surgical Masks, with 4 bidders competing

Contract Overview

Contract Amount: $17,400,000 ($17.4M)

Contractor: Gladden & Metz, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-30

End Date: 2027-09-29

Contract Duration: 1,094 days

Daily Burn Rate: $15.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SURGICAL MASKS - LEVEL 3

Place of Performance

Location: BRYANT, SALINE County, ARKANSAS, 72022

State: Arkansas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.4 million to GLADDEN & METZ, INC. for work described as: SURGICAL MASKS - LEVEL 3 Key points: 1. The contract value of $17.4 million for surgical masks appears reasonable given the duration and quantity implied. 2. Full and open competition suggests a healthy market for these essential medical supplies. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance is expected over three years, aligning with potential public health needs. 5. This procurement falls within the broader category of medical supplies manufacturing. 6. The award to Gladden & Metz, Inc. represents a significant, albeit specific, investment in the healthcare supply chain.

Value Assessment

Rating: good

The contract value of $17.4 million for surgical masks over three years suggests a per-unit cost that would need further benchmarking against market rates for Level 3 masks. However, the firm fixed-price structure provides cost certainty. Compared to similar large-scale procurements of personal protective equipment (PPE), this award seems within a typical range, especially considering potential surge demands or strategic stockpiling.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. With four bidders participating, this suggests a competitive environment that likely drove pricing towards market efficiency. The level of competition is sufficient to provide a reasonable degree of price discovery and ensure the government receives competitive offers.

Taxpayer Impact: A competitive bidding process for essential supplies like surgical masks helps ensure taxpayer dollars are used efficiently, preventing overpayment and promoting fair market pricing.

Public Impact

Beneficiaries include healthcare providers and potentially the general public who rely on a stable supply of Level 3 surgical masks. The services delivered are the provision of critical personal protective equipment (PPE). The geographic impact is national, supporting the strategic national stockpile and distribution across the United States. Workforce implications are indirect, supporting jobs within the surgical appliance and supplies manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality and compliance with Level 3 standards over the contract term.
Market price fluctuations for raw materials could impact long-term cost-effectiveness if not adequately managed.

Positive Signals

Awarded under full and open competition, indicating a robust supplier base.
Firm fixed-price contract type provides cost certainty and reduces government financial risk.
Long-term contract (3 years) ensures a stable supply of critical medical equipment.
Awardee is a specialized manufacturer, suggesting expertise in the product.

Sector Analysis

The surgical mask market is a significant segment within the broader medical supplies industry. This contract for Level 3 surgical masks, a standard for fluid resistance and protection, fits within the government's strategy to maintain adequate stockpiles of essential healthcare resources. Comparable spending benchmarks would involve analyzing other large federal contracts for PPE, particularly those awarded during public health emergencies or for strategic reserves.

Small Business Impact

This contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned in the provided data. The award to Gladden & Metz, Inc., a company whose size is not specified, means that opportunities for small businesses would likely arise indirectly through their supply chain or if they are a prime contractor themselves. Further analysis would be needed to determine the extent of small business participation.

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). Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through federal procurement databases. The Inspector General of HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award.

Related Government Programs

Strategic National Stockpile
Medical Supplies Procurement
Personal Protective Equipment (PPE)
Department of Health and Human Services Contracts

Risk Flags

Potential for price volatility in raw materials impacting long-term cost-effectiveness.
Ensuring consistent quality and compliance with Level 3 standards over the contract duration.
Risk of supply chain disruptions affecting timely delivery.
Contractor performance degradation over the three-year term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.4 million to GLADDEN & METZ, INC.. SURGICAL MASKS - LEVEL 3

Who is the contractor on this award?

The obligated recipient is GLADDEN & METZ, 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 $17.4 million.

What is the period of performance?

Start: 2024-09-30. End: 2027-09-29.

What is the historical spending pattern for surgical masks by the Department of Health and Human Services?

Historical spending data for surgical masks by HHS reveals a significant increase in procurement activity, particularly following the COVID-19 pandemic. Prior to 2020, annual spending on surgical masks was relatively modest, often in the low millions of dollars, primarily for routine operational needs and smaller stockpiles. However, emergency declarations and sustained public health responses led to multi-billion dollar expenditures across various federal agencies, including HHS, for PPE, with surgical masks being a core component. Analyzing specific contract awards over the past five years would show fluctuations tied to demand, strategic reserve replenishment efforts, and the competitive landscape, which has evolved with increased domestic manufacturing capacity. This $17.4 million award represents a mid-range procurement for sustained supply rather than an emergency surge purchase.

How does the per-unit cost of these surgical masks compare to other federal contracts or market rates?

Benchmarking the per-unit cost for these Level 3 surgical masks requires detailed unit pricing information, which is not directly provided in the summary data. However, general market trends and historical federal contract data can offer context. During peak demand in 2020-2021, per-unit costs for surgical masks surged dramatically due to supply chain constraints and intense competition. As supply chains stabilized and domestic production increased, prices have generally trended downwards. Federal agencies often leverage bulk purchasing power and long-term contracts to secure favorable pricing. Without specific unit price data for this $17.4 million award, a precise comparison is difficult, but the firm fixed-price nature and full and open competition suggest an effort to secure a competitive rate reflective of current market conditions, likely significantly lower than pandemic-era highs but potentially higher than pre-pandemic baseline prices due to inflation and increased manufacturing costs.

What is the track record of Gladden & Metz, Inc. in supplying medical equipment to the federal government?

Gladden & Metz, Inc.'s track record in supplying medical equipment to the federal government, based on available public procurement data, appears to be focused on specific categories within the medical supply domain. While this $17.4 million award for surgical masks is a substantial contract, further investigation into their past performance, including the types and values of previous awards, delivery history, and any reported performance issues or accolades, would be necessary for a comprehensive assessment. Federal procurement databases (like SAM.gov or FPDS) would typically contain records of their prior contract awards, modifications, and payment histories. Understanding their experience with similar large-scale, long-term supply contracts, especially for critical items like PPE, is crucial for evaluating their capability to meet the demands of this current award.

What are the potential risks associated with a three-year contract for surgical masks?

A three-year contract for surgical masks, while ensuring supply stability, carries several potential risks. Firstly, market prices for raw materials (like polypropylene) and finished goods can fluctuate significantly over this period due to global supply and demand, geopolitical events, or changes in manufacturing capacity. If the fixed price was set based on current low prices, future increases could erode profit margins for the contractor or lead to quality compromises if not managed proactively. Secondly, technological advancements or changes in medical best practices could render the specific type of mask less desirable or obsolete before the contract ends. Thirdly, there's a risk of contractor performance degradation over time, especially if demand surges unexpectedly, potentially leading to delivery delays or quality issues. Finally, the government might miss out on potentially better pricing if market conditions improve dramatically and a new, more competitive solicitation could have secured lower rates.

How does this contract contribute to the overall readiness of the Strategic National Stockpile (SNS)?

This contract directly contributes to the readiness of the Strategic National Stockpile (SNS) by ensuring a consistent and substantial supply of Level 3 surgical masks. The SNS aims to maintain adequate reserves of critical medical supplies to respond to public health emergencies, such as pandemics or bioterrorism events. By awarding a multi-year contract with a specific quantity or value, HHS (through ASPR) is proactively managing its inventory, replenishing stock, and potentially acquiring newer supplies to replace aging items. The $17.4 million investment signifies a commitment to maintaining a robust supply chain for essential PPE, thereby enhancing the nation's preparedness and response capabilities. The duration of the contract (three years) suggests a focus on sustained readiness rather than short-term emergency fill.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gladden & Metz Inc.

Address: 210 N REYNOLDS RD, BRYANT, AR, 72022

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Government, Native American Tribal Government, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $17,400,000

Exercised Options: $17,400,000

Current Obligation: $17,400,000

Actual Outlays: $6,728,040

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75A50121A00010

IDV Type: BPA

Timeline