HHS awards $416M contract to E3Health Solutions for COVID-19 testing via public-private partnership

Contract Overview

Contract Amount: $415,918,530 ($415.9M)

Contractor: E3health Solutions, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-04-13

End Date: 2021-09-30

Contract Duration: 535 days

Daily Burn Rate: $777.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP

Place of Performance

Location: MANSFIELD, TARRANT County, TEXAS, 76063

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $415.9 million to E3HEALTH SOLUTIONS, LLC for work described as: COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP Key points: 1. Significant investment in COVID-19 testing infrastructure. 2. Sole-source award raises questions about competition and price discovery. 3. Contract duration of 535 days covers a critical pandemic period. 4. Focus on point-of-care and self-swab testing aligns with public health needs.

Value Assessment

Rating: questionable

The contract value of $415.9M is substantial for medical laboratories. Benchmarking is difficult without detailed cost breakdowns, but the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially limiting price discovery and leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in a large contract raises concerns about taxpayer value and the potential for inflated costs.

Public Impact

Ensured availability of critical COVID-19 testing supplies during the pandemic. Supported public health efforts by facilitating widespread testing access. Potential for increased costs due to sole-source procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of transparency in pricing
Limited competition

Positive Signals

Addresses critical public health need
Supports pandemic response efforts

Sector Analysis

The healthcare sector, particularly during the pandemic, saw significant government spending on testing and medical supplies. This contract falls under medical laboratories (NAICS 621511), a critical area for public health.

Small Business Impact

The contract was awarded to E3HEALTH SOLUTIONS, LLC, and there is no indication of small business participation or subcontracting in the provided data.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the pricing is fair and reasonable and that the public health objectives were met efficiently.

Related Government Programs

Medical Laboratories
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Limited transparency on cost justification.
No clear indication of small business involvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $415.9 million to E3HEALTH SOLUTIONS, LLC. COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP

Who is the contractor on this award?

The obligated recipient is E3HEALTH SOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $415.9 million.

What is the period of performance?

Start: 2020-04-13. End: 2021-09-30.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further documentation, it's unclear if competitive strategies were explored or if specific circumstances necessitated bypassing the standard procurement process. This lack of competition raises concerns about potential overpayment and reduced innovation.

How does the per-unit cost of testing under this contract compare to other similar government or commercial contracts awarded during the same period?

Benchmarking the per-unit cost is challenging without access to detailed pricing information and specific testing methodologies. Given the sole-source nature, it is possible that the unit costs are higher than what might have been achieved through a competitive bidding process. A thorough cost analysis would be needed to determine fair pricing.

What mechanisms were in place to ensure the effectiveness and quality of the COVID-19 testing provided under this contract?

Effectiveness and quality assurance would typically be managed through contract performance standards, quality control plans, and regular reporting requirements. The government would likely monitor key performance indicators related to test accuracy, turnaround times, and supply chain reliability to ensure the public health objectives were met.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 602 STRADA CIR, MANSFIELD, TX, 76063

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $415,918,530

Exercised Options: $415,918,530

Current Obligation: $415,918,530

Actual Outlays: $415,918,530

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline