HHS awards $29.6M for PPE to 3M Company amid COVID-19 pandemic
Contract Overview
Contract Amount: $29,611 ($29.6K)
Contractor: 3M Company
Awarding Agency: Department of Health and Human Services
Start Date: 2020-03-18
End Date: 2020-04-18
Contract Duration: 31 days
Daily Burn Rate: $955/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: PPE [20-007894]
Place of Performance
Location: SAINT PAUL, RAMSEY County, MINNESOTA, 55144
Plain-Language Summary
Department of Health and Human Services obligated $29,610.9 to 3M COMPANY for work described as: PPE [20-007894] Key points: 1. Significant award to a major manufacturer (3M) for critical PPE. 2. Competition method was 'Full and Open', suggesting broad market engagement. 3. Short contract duration (31 days) indicates urgent need. 4. High value award for a single delivery order.
Value Assessment
Rating: good
The award value of $29.6 million for a 31-day delivery order is substantial. Benchmarking against similar large-scale PPE procurements during the pandemic is difficult due to market volatility, but the price appears within a reasonable range for emergency supply.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the best possible price discovery. However, the urgency of the pandemic may have influenced the negotiation process and final pricing.
Taxpayer Impact: Taxpayer funds were used to secure essential medical supplies during a national health crisis, prioritizing immediate availability over long-term cost savings.
Public Impact
Ensured availability of critical PPE for healthcare workers during the early stages of the COVID-19 pandemic. Supported a major domestic manufacturer, potentially bolstering supply chain resilience. Demonstrates government's ability to rapidly procure essential goods in emergencies.
Waste & Efficiency Indicators
Waste Risk Score: 95 / 10
Warning Flags
- Potential for price gouging during emergency procurement.
- Short-term nature of the contract may not address long-term supply needs.
Positive Signals
- Awarded under full and open competition.
- Procured from a well-established manufacturer.
- Addresses critical need for PPE.
Sector Analysis
The award falls within the Surgical and Medical Instrument Manufacturing sector. Spending in this sector surged dramatically in 2020 due to the pandemic, making direct comparisons to pre-pandemic benchmarks challenging.
Small Business Impact
While this specific award went to a large corporation (3M), the 'full and open competition' mechanism theoretically allows small businesses to participate if they can meet the requirements. However, large-scale emergency procurements often favor established prime contractors.
Oversight & Accountability
The award was a delivery order under a larger contract, suggesting some level of pre-existing oversight. The rapid nature of the procurement during a crisis may have limited the depth of review compared to standard acquisition processes.
Related Government Programs
- Surgical and Medical Instrument Manufacturing
- Department of Health and Human Services Contracting
- National Institutes of Health Programs
Risk Flags
- High award value for a short duration.
- Potential for inflated pricing due to emergency conditions.
- Lack of long-term supply assurance.
- Limited transparency on specific unit costs.
- Sole awardee for this specific delivery order.
Tags
surgical-and-medical-instrument-manufact, department-of-health-and-human-services, mn, delivery-order, under-100k
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $29,610.9 to 3M COMPANY. PPE [20-007894]
Who is the contractor on this award?
The obligated recipient is 3M COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (National Institutes of Health).
What is the total obligated amount?
The obligated amount is $29,610.9.
What is the period of performance?
Start: 2020-03-18. End: 2020-04-18.
Was the $29.6 million price competitive given the extreme market conditions of early 2020?
Determining true competitiveness is challenging due to unprecedented demand and supply chain disruptions in early 2020. While awarded under full and open competition, the urgency likely played a significant role. A detailed post-award analysis comparing unit prices to other contemporaneous emergency procurements would be needed for a definitive assessment.
What are the risks associated with awarding large sums for short-duration PPE contracts during a pandemic?
Risks include potential overpayment due to urgent demand, reliance on a single supplier for immediate needs, and the possibility of not securing sufficient long-term supply. Short contracts may also incentivize manufacturers to prioritize immediate, high-margin orders over sustained production planning.
How effective was this procurement in ensuring adequate PPE supply for the NIH?
This $29.6 million award to 3M for a 31-day period was likely effective in providing a significant quantity of PPE rapidly. However, its overall effectiveness depends on whether it was part of a broader strategy to meet sustained demand and if the quality and type of PPE met specific NIH needs.
Industry Classification
NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument 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
Solicitation ID: 20-007894
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3M CENTER BLDG 220 11W 02, SAINT PAUL, MN, 55144
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $29,611
Exercised Options: $29,611
Current Obligation: $29,611
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: V797D60714
IDV Type: FSS
Timeline
Start Date: 2020-03-18
Current End Date: 2020-04-18
Potential End Date: 2020-04-18 00:00:00
Last Modified: 2026-04-07
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