DoD's $51.8M BinaxNow COVID-19 Ag Card Purchase Awarded to Abbott Rapid Dx North America LLC

Contract Overview

Contract Amount: $51,792,378 ($51.8M)

Contractor: Abbott Rapid DX North America LLC

Awarding Agency: Department of Defense

Start Date: 2020-12-18

End Date: 2020-12-28

Contract Duration: 10 days

Daily Burn Rate: $5.2M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 8507874451!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 $51.8 million to ABBOTT RAPID DX NORTH AMERICA LLC for work described as: 8507874451!BINAXNOW COVID-19 AG CARD 40C Key points: 1. Contract awarded for rapid diagnostic test kits, crucial for public health response. 2. Sole-source award raises questions about potential cost savings and market competition. 3. Short performance period suggests an urgent need or specific delivery requirement. 4. Contract value represents a significant investment in COVID-19 testing infrastructure. 5. Focus on in-vitro diagnostic substance manufacturing highlights a critical supply chain component. 6. Geographic location of performance in Florida may indicate regional distribution needs.

Value Assessment

Rating: questionable

The contract value of $51.8 million for 10 days of performance is substantial. Without competitive bidding, it is difficult to benchmark the value for money. The unit price, if derivable, would need to be compared against market rates for similar diagnostic cards during the specified period. The lack of competition suggests potential overpayment or missed opportunities for cost efficiencies that a competitive process might have yielded.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Abbott Rapid Dx North America LLC, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified in urgent situations or when only one vendor possesses the required capability, it limits price discovery and potentially increases costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition, as the government did not benefit from the price pressures that typically arise from multiple bids.

Public Impact

The Department of Defense benefits by acquiring critical COVID-19 testing supplies. The public benefits from increased availability of rapid diagnostic tests for disease management. Services delivered include the provision of BinaxNow COVID-19 Ag Cards. Geographic impact is primarily within Florida, where the delivery orders were placed. Workforce implications are minimal for this specific contract, focusing on supply delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competitive award.
Sole-source award limits transparency in pricing and vendor selection.
Short duration could indicate a reactive procurement rather than strategic planning.

Positive Signals

Procurement addresses an urgent public health need for diagnostic tools.
Award to a known supplier ensures access to a specific, potentially critical, product.
Rapid delivery within 10 days indicates efficient logistical execution.

Sector Analysis

The contract falls within the Healthcare and Public Health sector, specifically focusing on In-Vitro Diagnostic Substance Manufacturing. The market for COVID-19 testing supplies saw significant demand and rapid innovation during the pandemic. This contract represents a portion of the government's overall spending on pandemic response and public health infrastructure, aiming to ensure the availability of essential diagnostic tools.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb': false. Abbott Rapid Dx North America LLC is a large business. There is no information provided regarding subcontracting plans with small businesses. The focus on a sole-source award to a large entity suggests limited direct opportunities for small businesses within this specific procurement action.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) may provide oversight for contract performance. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

COVID-19 Testing Supplies Procurement
Department of Defense Medical Materiel
In-Vitro Diagnostic Devices
Public Health Emergency Response Contracts

Risk Flags

Sole-source award
Lack of competition
High contract value for short duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.8 million to ABBOTT RAPID DX NORTH AMERICA LLC. 8507874451!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 $51.8 million.

What is the period of performance?

Start: 2020-12-18. End: 2020-12-28.

What is the historical spending by the Department of Defense on Abbott's BinaxNow COVID-19 Ag Cards?

Analyzing historical spending on Abbott's BinaxNow COVID-19 Ag Cards by the Department of Defense requires access to comprehensive federal procurement databases. While this specific contract details a $51.8 million award, broader trends would involve aggregating data across multiple contract actions, delivery orders, and potentially different agencies or sub-agencies within DoD. Factors influencing historical spending include the evolution of the pandemic, changes in testing strategies, availability of alternative tests, and DoD's specific mission requirements for testing. Without a broader dataset, it's challenging to establish a definitive historical spending pattern solely based on this single award. However, the existence of this significant award suggests DoD has previously invested, or is currently investing, substantial funds in this particular diagnostic product to meet its operational and public health needs.

How does the unit cost of the BinaxNow COVID-19 Ag Card in this contract compare to market rates at the time of award?

Determining the precise unit cost requires knowing the quantity of cards purchased under this $51.8 million contract. Assuming the contract is for a specific quantity, dividing the total award amount by the number of units would yield the unit price. This price would then need to be benchmarked against publicly available pricing data for Abbott's BinaxNow COVID-19 Ag Cards from late 2020. Market rates would also be influenced by whether the purchase was made directly from Abbott or through distributors, and the volume of the order. Given the sole-source nature of this award, direct comparison to competitively bid prices is difficult. However, comparing to published prices or prices from other government agencies that may have procured the same item competitively could provide a benchmark for value assessment.

What are the risks associated with a sole-source award for critical medical supplies like COVID-19 tests?

Sole-source awards for critical medical supplies present several risks. Primarily, the lack of competition can lead to inflated prices, meaning taxpayers may overpay for the goods. It also reduces transparency in the procurement process, making it harder to verify that the government is receiving the best possible value. Furthermore, relying on a single supplier can create supply chain vulnerabilities; if the sole-source contractor experiences production issues, delivery delays, or quality control problems, the government's access to essential supplies could be jeopardized. This was particularly concerning during the COVID-19 pandemic, where demand for testing supplies was extremely high and volatile. A competitive process, conversely, fosters innovation, encourages multiple suppliers to meet demand, and generally leads to better pricing and more resilient supply chains.

What is the significance of the short 10-day performance period for this contract?

The extremely short 10-day performance period (December 18, 2020 - December 28, 2020) for this $51.8 million contract suggests an urgent and immediate need for the BinaxNow COVID-19 Ag Cards. This could indicate a specific, time-sensitive requirement, such as supporting a particular event, addressing a sudden surge in demand in a specific region, or fulfilling a critical gap in existing inventory. It implies that the procurement was reactive rather than part of a long-term strategic plan. Such short durations often accompany emergency procurements or delivery orders against existing indefinite-delivery/indefinite-quantity (IDIQ) contracts, though this appears to be a direct award. The rapid delivery timeline also places pressure on the contractor to fulfill the order quickly.

How does this contract align with the Defense Logistics Agency's (DLA) mission?

This contract aligns directly with the Defense Logistics Agency's (DLA) mission to provide comprehensive logistics and support to the joint warfighter and other federal agencies. DLA Troop Support, which likely handled this procurement, is responsible for medical, subsistence, and general support equipment. Acquiring critical medical supplies like COVID-19 diagnostic tests is a core function, especially during a national health emergency. Ensuring the availability and rapid delivery of these essential items supports military readiness, the health of service members, and broader public health efforts, all of which fall squarely within DLA's operational mandate. The DLA plays a crucial role in the federal government's supply chain management for such vital resources.

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: $52,445,800

Exercised Options: $51,792,378

Current Obligation: $51,792,378

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2DE20D0027

IDV Type: IDC

Timeline