DoD Spends $74M on Abbott COVID-19 Test Kits in 10-Day Delivery Order

Contract Overview

Contract Amount: $74,070,807 ($74.1M)

Contractor: Abbott Rapid DX North America LLC

Awarding Agency: Department of Defense

Start Date: 2020-12-11

End Date: 2020-12-21

Contract Duration: 10 days

Daily Burn Rate: $7.4M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 8507857496!BINAXNOW COVID-19 AG CARD 40C

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32810

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $74.1 million to ABBOTT RAPID DX NORTH AMERICA LLC for work described as: 8507857496!BINAXNOW COVID-19 AG CARD 40C Key points: 1. High value contract for critical medical supplies. 2. Sole-source award to Abbott Rapid Dx North America LLC. 3. Short performance period suggests urgent need. 4. Sector: Defense Logistics Agency procurement for medical readiness.

Value Assessment

Rating: good

The total award of $74M for 10 days of supply appears reasonable given the urgency and nature of the product during the pandemic. Benchmarking against similar rapid test procurements is difficult due to market volatility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, likely due to specific product requirements or an urgent need that precluded a competitive process. This limits price discovery and potentially increases costs.

Taxpayer Impact: Taxpayers funded a significant expenditure for essential COVID-19 testing supplies, prioritizing rapid deployment over competitive pricing.

Public Impact

Ensured availability of rapid COVID-19 testing kits for military personnel and potentially other government entities. Supported national response efforts during a critical phase of the pandemic. Demonstrates government's ability to procure essential supplies quickly, albeit at a premium.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Short duration may indicate rushed procurement.
Lack of unit cost benchmark.

Positive Signals

Procured critical medical supplies.
Rapid delivery achieved.
Supported national health objectives.

Sector Analysis

This procurement falls within the Defense sector, specifically for medical supplies managed by the Defense Logistics Agency. Spending benchmarks for rapid diagnostic kits can vary widely based on demand and manufacturer.

Small Business Impact

This contract was awarded to a large business (Abbott Rapid Dx North America LLC) and does not appear to have any specific small business set-aside or subcontracting requirements mentioned.

Oversight & Accountability

The sole-source nature of this award warrants oversight to ensure the price was fair and reasonable given the lack of competition. The short performance period suggests a need for robust tracking of delivery and quality.

Related Government Programs

In-Vitro Diagnostic Substance Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price premium
Short performance period
No unit cost benchmark provided

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.1 million to ABBOTT RAPID DX NORTH AMERICA LLC. 8507857496!BINAXNOW COVID-19 AG CARD 40C

Who is the contractor on this award?

The obligated recipient is ABBOTT RAPID DX NORTH AMERICA LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $74.1 million.

What is the period of performance?

Start: 2020-12-11. End: 2020-12-21.

Was the sole-source justification for this contract robust, considering the critical need for COVID-19 tests?

The justification for a sole-source award would typically hinge on factors like urgency, unique capabilities, or lack of available alternatives. During the height of the pandemic, rapid availability of critical supplies like COVID-19 tests often necessitated expedited procurement, sometimes leading to sole-source awards to ensure immediate deployment.

What was the potential price impact of awarding this contract without competition?

Sole-source contracts generally carry a higher risk of inflated pricing due to the absence of competitive pressure. Without a competitive bidding process, the government may have paid a premium for these test kits compared to what could have been achieved through an open solicitation, although the urgency of the need was a primary factor.

How effective was this procurement in meeting the immediate testing needs of the Department of Defense?

Given the short 10-day delivery window and the significant dollar amount, this procurement was likely effective in rapidly supplying a large quantity of COVID-19 test kits. The focus was clearly on speed and availability to address an immediate operational or health requirement.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Abbott Laboratories (UEI: 001307602)

Address: 30 S KELLER RD STE 100, ORLANDO, FL, 32810

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

Financial Breakdown

Contract Ceiling: $74,628,400

Exercised Options: $74,070,807

Current Obligation: $74,070,807

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2DE20D0027

IDV Type: IDC

Timeline