HHS awards $61M contract to Advanced Technology International for domestic nitrile glove manufacturing expansion

Contract Overview

Contract Amount: $61,000,000 ($61.0M)

Contractor: Advanced Technology International

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: $55.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPANSION OF DOMESTIC MANUFACTURING CAPACITY FOR NITRILE GLOVES

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 $61.0 million to ADVANCED TECHNOLOGY INTERNATIONAL for work described as: EXPANSION OF DOMESTIC MANUFACTURING CAPACITY FOR NITRILE GLOVES Key points: 1. Contract aims to bolster domestic supply chain resilience for critical medical supplies. 2. Focus on expanding manufacturing capacity suggests a strategic investment in national health security. 3. The firm fixed-price contract type provides cost certainty for the government. 4. A 1094-day duration indicates a significant, long-term commitment to this expansion. 5. The contract's success hinges on the contractor's ability to scale production effectively and meet demand. 6. This initiative aligns with broader government efforts to onshore critical manufacturing.

Value Assessment

Rating: good

The contract value of $61 million for expanding nitrile glove manufacturing capacity appears reasonable given the strategic importance and scale of the undertaking. Benchmarking against similar investments in domestic production of essential medical supplies would provide further context, but the focus on supply chain security justifies significant investment. The firm fixed-price structure helps manage cost risks for the government.

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 had the opportunity to bid. This competitive process is expected to drive fair pricing and encourage innovation. The specific number of bidders is not provided, but the open competition suggests a healthy market response.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring the government receives competitive pricing and the best value for its investment, reducing the risk of overpayment.

Public Impact

The primary beneficiaries are the U.S. healthcare system and public health agencies, ensuring a more stable supply of nitrile gloves during emergencies. The contract will support the domestic manufacturing of nitrile gloves, a critical component in healthcare settings. The geographic impact is focused on South Carolina, where the manufacturing expansion is likely to occur, potentially creating jobs. Workforce implications include potential job creation in manufacturing and related support industries within the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if manufacturing ramp-up is slower than anticipated.
Dependence on Advanced Technology International for successful execution of the expansion.
Market volatility in raw material costs for nitrile production could impact long-term viability.

Positive Signals

Strengthens domestic supply chain for essential medical equipment.
Reduces reliance on foreign manufacturing for critical goods.
Supports U.S. manufacturing sector and potential job growth.
Firm fixed-price contract provides cost predictability.
Long-term contract duration signals commitment to supply chain resilience.

Sector Analysis

This contract falls within the Biological Product (except Diagnostic) Manufacturing sector, a critical area for national health security. The market for nitrile gloves is substantial, driven by healthcare demand and pandemic preparedness. This award represents a strategic investment to onshore production capabilities, reducing vulnerability to global supply chain shocks and aligning with government initiatives to bolster domestic industrial capacity.

Small Business Impact

While this contract is not specifically a small business set-aside, the expansion of domestic manufacturing capacity could create opportunities for small businesses to participate as suppliers or subcontractors within the broader supply chain. The success of the primary contractor may indirectly benefit the small business ecosystem by fostering demand for related goods and services.

Oversight & Accountability

Oversight will likely be managed by the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures will be tied to the delivery order milestones and the overall contract performance against the expansion goals. Transparency is expected through standard government contracting reporting mechanisms.

Related Government Programs

Strategic National Stockpile
Medical Supply Chain Resilience Initiatives
Domestic Manufacturing Investment Programs
Public Health Emergency Preparedness

Risk Flags

Supply Chain Dependency
Manufacturing Scale-Up Risk
Quality Control Assurance
Raw Material Price Volatility

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $61.0 million to ADVANCED TECHNOLOGY INTERNATIONAL. EXPANSION OF DOMESTIC MANUFACTURING CAPACITY FOR NITRILE GLOVES

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 $61.0 million.

What is the period of performance?

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

What is the track record of Advanced Technology International in managing large-scale manufacturing expansion contracts, particularly in the healthcare sector?

Advanced Technology International (ATI) is a non-profit company that serves as a trusted partner for the U.S. government, managing complex research and development (R&D) and manufacturing initiatives. ATI's model often involves leveraging its network of member companies and partners to execute projects. While ATI itself may not be a direct manufacturer, its strength lies in its ability to convene industry expertise and manage consortia to achieve specific technological or production goals. For this specific contract, ATI's track record would be assessed based on its past performance in managing similar large-scale, government-funded projects, its ability to select and oversee capable manufacturing partners, and its success in meeting project milestones and objectives within budget and schedule. A review of past performance evaluations and contract awards managed by ATI would be crucial to understanding its capabilities in this domain.

How does the $61 million investment compare to historical government spending on nitrile glove production or similar supply chain initiatives?

The $61 million investment represents a significant commitment to bolstering domestic nitrile glove manufacturing capacity. To benchmark this, one would need to analyze historical government spending on similar initiatives, such as investments made during the COVID-19 pandemic to secure medical supplies or other programs aimed at onshore manufacturing of critical goods. For instance, prior government contracts for nitrile gloves might have been for procurement rather than capacity expansion, making direct cost comparisons challenging. However, understanding the scale of previous investments in supply chain resilience, particularly for personal protective equipment (PPE), would provide context. This $61 million could be seen as a strategic investment to prevent future shortages and reduce reliance on foreign sources, potentially justifying a higher upfront cost compared to simply purchasing existing inventory.

What are the key performance indicators (KPIs) that will be used to measure the success of this contract and the expansion of manufacturing capacity?

The success of this contract will likely be measured through a combination of quantitative and qualitative Key Performance Indicators (KPIs). Quantitatively, KPIs could include the volume of nitrile gloves produced per month/year, the percentage increase in domestic production capacity achieved, adherence to quality control standards (e.g., defect rates), and on-time delivery rates for orders. Qualitatively, KPIs might assess the contractor's ability to maintain a resilient and secure supply chain, the effectiveness of their quality assurance processes, and their responsiveness to evolving demand or unforeseen challenges. The contract itself will specify these performance metrics and the associated payment or incentive structures. Regular performance reviews and reporting will be essential to track progress against these KPIs.

What are the potential risks associated with relying on Advanced Technology International to expand domestic nitrile glove manufacturing, and what mitigation strategies are in place?

Potential risks include delays in manufacturing ramp-up, quality control issues, fluctuations in raw material costs, and the contractor's ability to manage a complex network of suppliers and manufacturers. If ATI relies heavily on a few key partners, disruptions to those partners could impact overall production. Mitigation strategies likely involve robust contract management by HHS, including clear performance milestones, regular site visits, and stringent quality assurance protocols. ATI's own risk mitigation would involve diversifying its supplier base, establishing contingency plans for raw material sourcing, and implementing rigorous oversight of its manufacturing partners. The firm fixed-price nature of the contract also shifts some financial risk to the contractor.

How does this contract align with broader U.S. government strategies for supply chain security and domestic industrial base enhancement?

This contract directly aligns with broader U.S. government strategies focused on enhancing supply chain security and strengthening the domestic industrial base, particularly for critical goods. Following lessons learned from the COVID-19 pandemic, there has been a concerted effort to reduce reliance on foreign sources for essential items like personal protective equipment (PPE). By investing in the expansion of domestic nitrile glove manufacturing capacity, the government is taking a proactive step to ensure a stable and secure supply chain, thereby enhancing national health security and economic resilience. This initiative supports policies aimed at reshoring manufacturing, creating U.S. jobs, and building a more robust and self-sufficient industrial ecosystem capable of responding to future crises.

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: FIRM FIXED PRICE (J)

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: $61,000,000

Exercised Options: $61,000,000

Current Obligation: $61,000,000

Actual Outlays: $262,285

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