HHS Ratifies $640K COVID-19 Lab Testing Contract with Quest Diagnostics

Contract Overview

Contract Amount: $6,404,720 ($6.4M)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Health and Human Services

Start Date: 2020-03-18

End Date: 2020-07-31

Contract Duration: 135 days

Daily Burn Rate: $47.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: QUEST OASH COVID-19 LABORATORY TESTING (CBTS 1.0) - RATIFICATION THE PURPOSE OF THIS PURCHASE ORDER IS TO RATIFY FOR THE TIME PERIOD OF MARCH 18, 2020 - MAY 5, 2020. AUTHORITIES OF GOVERNMENT PERSONNEL: CONTRACTING OFFICER: FOR ANY QUESTIONS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20201

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $6.4 million to QUEST DIAGNOSTICS INCORPORATED for work described as: QUEST OASH COVID-19 LABORATORY TESTING (CBTS 1.0) - RATIFICATION THE PURPOSE OF THIS PURCHASE ORDER IS TO RATIFY FOR THE TIME PERIOD OF MARCH 18, 2020 - MAY 5, 2020. AUTHORITIES OF GOVERNMENT PERSONNEL: CONTRACTING OFFICER: FOR ANY QUESTIONS Key points: 1. Quest Diagnostics secured a $640,472 contract for COVID-19 lab testing. 2. The contract was a ratification for services rendered from March 18, 2020, to May 5, 2020. 3. The award was not competed under Simplified Acquisition Procedures (SAP), raising potential competition concerns. 4. The sector is Healthcare, specifically Medical Laboratories (NAICS 621511).

Value Assessment

Rating: questionable

The contract value of $640,472 for a limited period of COVID-19 testing is difficult to benchmark without more specific details on the volume and type of tests. However, the lack of competition suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed under SAP, indicating a limited competition approach. This method may not have resulted in the best possible price discovery for the government, potentially leading to higher costs.

Taxpayer Impact: The ratification of an uncompeted contract raises concerns about taxpayer value and whether a competitive process could have secured better pricing or terms.

Public Impact

Ensured critical COVID-19 laboratory testing capacity during the early stages of the pandemic. Provided essential diagnostic services to support public health response efforts. The uncompeted nature of the award may limit transparency and public trust in the procurement process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Ratification of services
Potential for overpricing

Positive Signals

Provided essential COVID-19 testing
Supported public health response

Sector Analysis

The healthcare sector, particularly laboratory services, saw a surge in demand and spending during the COVID-19 pandemic. Benchmarks for such services can vary widely based on test complexity and volume.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The focus appears to be on a large, established provider.

Oversight & Accountability

The ratification of this contract suggests that the initial procurement may not have followed standard procedures, potentially indicating a lapse in oversight. Further review of the circumstances leading to ratification is warranted.

Related Government Programs

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

Risk Flags

Contract awarded via ratification
Not competed under SAP
Potential lack of price competition
Limited transparency on specific services and pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $6.4 million to QUEST DIAGNOSTICS INCORPORATED. QUEST OASH COVID-19 LABORATORY TESTING (CBTS 1.0) - RATIFICATION THE PURPOSE OF THIS PURCHASE ORDER IS TO RATIFY FOR THE TIME PERIOD OF MARCH 18, 2020 - MAY 5, 2020. AUTHORITIES OF GOVERNMENT PERSONNEL: CONTRACTING OFFICER: FOR ANY QUESTIONS

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.

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 $6.4 million.

What is the period of performance?

Start: 2020-03-18. End: 2020-07-31.

What specific factors necessitated the ratification of this contract rather than a pre-negotiated award?

The data indicates this was a ratification for services already rendered during a critical period (March 18 - May 5, 2020). This suggests an urgent need for COVID-19 testing that may have preceded formal contract action, possibly due to the rapidly evolving pandemic response. The exact reasons for not competing it initially are not detailed.

How does the pricing of this contract compare to similar COVID-19 testing services procured competitively during the same period?

Without specific details on the types and volume of tests performed, a direct price comparison is challenging. However, the 'NOT COMPETED UNDER SAP' flag suggests a lack of competitive bidding, which typically leads to higher prices compared to competitively awarded contracts. Benchmarking would require access to more granular pricing data.

What was the impact of this uncompeted award on the government's ability to secure testing resources effectively?

While this award likely ensured immediate access to critical testing services during a public health emergency, the lack of competition raises questions about long-term effectiveness and value. It may have limited opportunities for other qualified providers and potentially resulted in less favorable pricing than a competitive process could have achieved.

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 UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $6,404,720

Exercised Options: $6,404,720

Current Obligation: $6,404,720

Actual Outlays: $6,404,720

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline