HHS awarded $35.4M for emergency UC influx capacity in Texas, fulfilling an urgent need

Contract Overview

Contract Amount: $35,392,064 ($35.4M)

Contractor: Cotton Commercial USA, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-14

End Date: 2021-07-11

Contract Duration: 119 days

Daily Burn Rate: $297.4K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURPOSE OF THIS PURCHASE ORDER IS TO FULFILL AN URGENT NEED FOR A DECOMPRESSION SITE TO HAVE ADDITIONAL TEMPORARY INFLUX CAPACITY IN TEXAS DUE TO THE RECENT AND RAPID INCREASE IN UC VOLUME.

Place of Performance

Location: MIDLAND, MIDLAND County, TEXAS, 79701

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $35.4 million to COTTON COMMERCIAL USA, INC. for work described as: THE PURPOSE OF THIS PURCHASE ORDER IS TO FULFILL AN URGENT NEED FOR A DECOMPRESSION SITE TO HAVE ADDITIONAL TEMPORARY INFLUX CAPACITY IN TEXAS DUE TO THE RECENT AND RAPID INCREASE IN UC VOLUME. Key points: 1. Contract addresses an urgent need for temporary influx capacity due to a rapid increase in unaccompanied alien (UC) volume. 2. The contract was competed under simplified acquisition procedures, suggesting a focus on speed and efficiency for an urgent requirement. 3. The award to Cotton Commercial USA, Inc. for emergency relief services highlights the government's reliance on specialized contractors during crises. 4. The short duration of the contract (119 days) indicates a temporary solution to a surge in demand. 5. The fixed-price nature of the contract provides cost certainty for the government, despite the urgent circumstances.

Value Assessment

Rating: good

The contract value of $35.4 million for a 119-day period for emergency relief services appears reasonable given the urgent nature of the requirement. While direct comparisons are difficult due to the specific emergency context, the per-day cost is approximately $297,412. This figure should be benchmarked against similar emergency response contracts for temporary facilities or influx capacity to fully assess value for money. The firm-fixed-price structure helps manage cost predictability.

Cost Per Unit: Approximately $297,412 per day.

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which are typically used for purchases below the simplified acquisition threshold. This suggests that while competition was sought, it may have been limited to a smaller pool of pre-qualified vendors or those able to respond rapidly to an urgent need. The number of bidders is not specified, but SAP competition often involves fewer offers than full and open competition.

Taxpayer Impact: Using SAP for this urgent requirement likely expedited the award process, which is beneficial when immediate capacity is needed. However, it may have resulted in less price competition than a broader solicitation, potentially leading to a higher cost for taxpayers than if more vendors had participated.

Public Impact

The primary beneficiaries are unaccompanied alien children (UC) requiring temporary shelter and services. The contract delivers essential emergency relief services, including the provision of decompression site capacity. The geographic impact is focused on Texas, a key state for managing influxes of UC. The contract supports the workforce involved in emergency response and humanitarian services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the urgent need extends beyond the initial contract period.
Limited competition under SAP could mean taxpayers did not receive the lowest possible price.
Ensuring adequate oversight and quality of services provided in a rapidly deployed temporary facility.

Positive Signals

Addresses a critical and urgent humanitarian need.
Utilizes a firm-fixed-price contract for cost certainty.
Leverages existing government procurement procedures (SAP) for rapid deployment.
Focuses on a specific geographic area experiencing high demand.

Sector Analysis

This contract falls within the 'Emergency and Other Relief Services' category, often associated with government responses to humanitarian crises or natural disasters. The market for such services includes companies specializing in temporary infrastructure, logistics, and support services. Spending in this sector can be highly variable, driven by unpredictable events. Benchmarking is challenging as these are often reactive, short-term needs rather than routine service contracts.

Small Business Impact

Information regarding small business set-asides or subcontracting is not explicitly provided in the data. Given the nature of emergency relief services and the potential scale of this contract, it is possible that larger, specialized firms were prioritized for rapid deployment. Further analysis would be needed to determine if small businesses were involved in subcontracting opportunities or if this was a direct award to a larger entity.

Oversight & Accountability

Oversight would typically be managed by the Administration for Children and Families (ACF) within HHS. Given the urgent nature and temporary deployment, oversight would likely focus on ensuring the facility meets safety and operational standards, and that services are delivered as contracted. Transparency is facilitated through contract award databases, but detailed operational oversight reports may not be publicly available.

Related Government Programs

Department of Health and Human Services - Unaccompanied Alien Children Program
Department of Homeland Security - Border Patrol Operations
Federal Emergency Management Agency - Disaster Relief Funding

Risk Flags

Urgent Need Procurement
Simplified Acquisition Procedures
Potential for Limited Competition
Temporary Facility Deployment

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $35.4 million to COTTON COMMERCIAL USA, INC.. THE PURPOSE OF THIS PURCHASE ORDER IS TO FULFILL AN URGENT NEED FOR A DECOMPRESSION SITE TO HAVE ADDITIONAL TEMPORARY INFLUX CAPACITY IN TEXAS DUE TO THE RECENT AND RAPID INCREASE IN UC VOLUME.

Who is the contractor on this award?

The obligated recipient is COTTON COMMERCIAL USA, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Administration for Children and Families).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2021-03-14. End: 2021-07-11.

What is the track record of Cotton Commercial USA, Inc. in providing similar emergency relief services?

Cotton Commercial USA, Inc. is a company that provides commercial cleaning and disaster recovery services. While their core business may not be directly providing temporary influx capacity for unaccompanied alien children, their experience in disaster recovery suggests capabilities in rapid deployment, logistics, and managing large-scale operations under pressure. It is important to verify if they have specific experience with government contracts of this nature and scale, particularly those involving humanitarian services. Their ability to fulfill the urgent need for decompression capacity would depend on their existing infrastructure, personnel, and experience in setting up and managing temporary facilities in response to sudden surges in demand.

How does the per-day cost of this contract compare to similar emergency influx capacity contracts?

The per-day cost for this contract is approximately $297,412 ($35.4M / 119 days). Benchmarking this figure is challenging without access to specific, comparable contracts for emergency influx capacity for unaccompanied alien children. However, this rate is substantial and suggests significant costs associated with rapid deployment, facility setup, staffing, and services required for such a sensitive operation. To provide a robust comparison, one would need to analyze contracts awarded by HHS or DHS for similar temporary shelter or processing facilities, considering factors like location, duration, capacity, and the specific services included. Without such direct comparisons, it's difficult to definitively state if this represents excellent or questionable value.

What are the primary risks associated with awarding emergency contracts under Simplified Acquisition Procedures (SAP)?

Awarding emergency contracts under SAP primarily carries the risk of reduced competition. SAP is designed for speed and efficiency, often involving fewer bidders than full and open competition. This can lead to higher prices for the government as the potential for robust price discovery is diminished. There's also a risk that the urgency might overshadow thorough vetting of all potential offerors, potentially leading to awards to less experienced or less capable vendors, although this is mitigated by vendor registration and past performance checks. Furthermore, the focus on speed might lead to less detailed contract terms, increasing the risk of scope creep or disputes if the emergency situation evolves unexpectedly.

What is the expected effectiveness of this decompression site in managing the influx of unaccompanied alien children?

The effectiveness of this decompression site hinges on its ability to provide safe, sanitary, and timely temporary housing and essential services to unaccompanied alien children (UC) arriving in large numbers. The contract's purpose is to alleviate pressure on existing facilities and ensure that UC are not held in inappropriate conditions for extended periods. Its success will be measured by its capacity to absorb the influx, the quality of care provided, the efficiency of processing and onward placement of children, and its contribution to stabilizing the overall management of UC arrivals. The short duration suggests it's a stop-gap measure, so its effectiveness is tied to its role in a broader, coordinated response strategy.

What are the historical spending patterns for emergency relief services related to unaccompanied alien children?

Historical spending patterns for emergency relief services related to unaccompanied alien children (UC) have shown significant fluctuations, often correlating with geopolitical events, policy changes, and seasonal migration trends. Spending tends to surge during periods of increased border arrivals. HHS and DHS have historically utilized various contracting mechanisms, including emergency procurements and sole-source awards, to quickly establish temporary facilities and provide necessary services. This has sometimes led to substantial contract awards in the hundreds of millions or even billions of dollars over specific fiscal years or during peak migration events. Analyzing past spending reveals a pattern of reactive, rather than proactive, resource allocation, often driven by immediate crises.

What oversight mechanisms are in place to ensure the quality of services and conditions at the decompression site?

Oversight for such emergency contracts typically involves a multi-layered approach. The contracting agency (HHS/ACF in this case) is responsible for contract administration, including monitoring performance against contract requirements, ensuring compliance with safety and health standards, and managing payments. Given the humanitarian nature of the services, non-governmental organizations (NGOs) and potentially internal HHS oversight bodies may also play a role in monitoring conditions and care provided to the children. Inspector General (IG) offices within relevant agencies often conduct audits and investigations into government contracts, particularly those involving significant funds or potential risks, to ensure accountability and prevent waste, fraud, and abuse.

Industry Classification

NAICS: Health Care and Social Assistance › Community Food and Housing, and Emergency and Other Relief Services › Emergency and Other Relief Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5443 KATY HOCKLEY CUT-OFF RD, KATY, TX, 77493

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $51,121,606

Exercised Options: $35,392,064

Current Obligation: $35,392,064

Actual Outlays: $4,573,214

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline