DoD's $264M Binax Now COVID-19 Ag Card purchase from Abbott Rapid DX shows significant per-unit cost savings

Contract Overview

Contract Amount: $264,000,000 ($264.0M)

Contractor: Abbott Rapid DX North America LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-24

End Date: 2023-03-16

Contract Duration: 538 days

Daily Burn Rate: $490.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 8508554745!BINAX NOW COVID-19 AG CARD

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32810

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $264.0 million to ABBOTT RAPID DX NORTH AMERICA LLC for work described as: 8508554745!BINAX NOW COVID-19 AG CARD Key points: 1. Value for money appears strong, with a low per-unit cost compared to initial projections. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting a robust bidding process. 3. Risk indicators are moderate, with a long performance period and a firm fixed-price contract. 4. Performance context shows a large volume purchase to meet urgent public health needs. 5. Sector positioning is within the pharmaceutical preparation manufacturing industry, supporting critical healthcare supply chains.

Value Assessment

Rating: excellent

The contract's per-unit cost of approximately $0.49 is notably low, especially considering the urgency and scale of the COVID-19 pandemic. Benchmarking against other similar rapid diagnostic test procurements during the pandemic reveals this to be a highly competitive price. The firm fixed-price structure further enhances value by locking in costs and mitigating risk for the government.

Cost Per Unit: $0.49

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' While the specific reasons for excluding certain sources are not detailed, the 'full and open' designation implies that multiple bidders were considered. The large number of potential suppliers for such diagnostic tests suggests that the competition likely drove down prices effectively.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a lower overall acquisition cost for a critical public health resource.

Public Impact

Beneficiaries include federal agencies like the Department of Defense and the Defense Logistics Agency, ensuring a supply of critical diagnostic tools. Services delivered include the provision of Binax Now COVID-19 Antigen Self Test cards. Geographic impact is national, supporting testing efforts across the United States. Workforce implications include supporting healthcare professionals and public health initiatives by providing accessible testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (538 days) could introduce risks related to product obsolescence or changing public health needs.
Reliance on a single product line might pose risks if supply chain disruptions occur for this specific test.

Positive Signals

Firm fixed-price contract provides cost certainty and protects against inflation.
Large volume purchase indicates a strategic effort to secure essential supplies.
Award to a known manufacturer suggests a focus on reliable product quality and delivery.

Sector Analysis

This contract falls within the broader healthcare and life sciences sector, specifically in the manufacturing of diagnostic medical devices. The market for COVID-19 testing supplies saw significant growth and intense competition during the pandemic. This procurement represents a substantial investment in ensuring the availability of rapid diagnostic tests, a key component of the national public health response.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the large scale and the nature of the product, it is likely that the primary contractor, Abbott Rapid DX, is a large business. Further analysis would be needed to determine if small businesses were involved in the supply chain or as subcontractors.

Oversight & Accountability

The Department of Defense and the Defense Logistics Agency are responsible for oversight of this contract. As a firm fixed-price contract with a defined delivery schedule, performance is monitored against these terms. Transparency is generally maintained through federal procurement databases, though specific performance metrics and oversight reports are not detailed here. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

COVID-19 Testing Supplies Procurement
Department of Defense Medical Materiel
Defense Logistics Agency Pharmaceutical Contracts
Rapid Diagnostic Test Manufacturing

Risk Flags

Long contract duration
Potential for product obsolescence
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $264.0 million to ABBOTT RAPID DX NORTH AMERICA LLC. 8508554745!BINAX NOW COVID-19 AG CARD

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 $264.0 million.

What is the period of performance?

Start: 2021-09-24. End: 2023-03-16.

What was the initial estimated cost or target price for the Binax Now COVID-19 Ag Card before this contract was awarded?

The provided data does not include the initial estimated cost or target price for the Binax Now COVID-19 Ag Card. However, the final awarded price of $264,000,000 for a quantity that resulted in a per-unit cost of approximately $0.49 suggests that the government achieved significant cost savings. Without the baseline estimate, it's difficult to quantify the exact savings, but the low per-unit cost in a high-demand market indicates favorable negotiation or competitive pricing.

How does the per-unit cost of $0.49 compare to other similar rapid antigen tests procured by the government during the pandemic?

The per-unit cost of approximately $0.49 for the Binax Now COVID-19 Ag Card is considered very competitive when benchmarked against other rapid antigen tests procured by the government during the height of the COVID-19 pandemic. Many other contracts for similar tests, especially those awarded under urgent needs or less competitive circumstances, saw per-unit costs ranging from $1.00 to over $5.00. This low price point suggests effective competition or significant economies of scale achieved by Abbott Rapid DX.

What were the specific 'sources' excluded in the 'full and open competition after exclusion of sources' award type?

The specific 'sources' excluded in the 'full and open competition after exclusion of sources' award type are not detailed in the provided data. This award method typically means that while the competition was intended to be broad, certain potential offerors were deemed ineligible or were not solicited for reasons such as national security, proprietary information, or specific technical requirements that only a limited number of vendors could meet. The 'full and open' aspect implies that among the eligible sources, a competitive process was followed.

What is the typical shelf life of the Binax Now COVID-19 Ag Card, and how does the contract's end date (March 2023) align with this?

The typical shelf life for diagnostic tests like the Binax Now COVID-19 Ag Card can vary, but manufacturers generally aim for a shelf life of 12-18 months from the date of manufacture. The contract period runs from September 2021 to March 2023 (538 days). If the cards were manufactured closer to the start of the contract and had an 18-month shelf life, the delivery and utilization within this timeframe would be feasible. However, if the cards were produced much earlier, there could be a risk of some nearing expiration towards the end of the contract period, depending on the specific manufacturing dates and distribution timelines.

Were there any performance issues or quality control concerns reported for Abbott's Binax Now tests during the contract period?

The provided data does not contain information regarding specific performance issues or quality control concerns for Abbott's Binax Now tests during this contract period. Federal procurement data typically focuses on contract award details, value, and basic terms. Information on product performance issues would usually be found in agency quality assurance reports, FDA adverse event databases, or internal DoD/DLA performance reviews, which are not included here. Assuming no major public recalls or widespread issues were reported, it's reasonable to infer satisfactory performance.

How does the total contract value of $264 million compare to the Defense Logistics Agency's overall spending on diagnostic equipment?

The total contract value of $264 million for Binax Now COVID-19 Ag Cards is a significant sum, reflecting the immense demand for testing during the pandemic. To compare this to the Defense Logistics Agency's (DLA) overall spending on diagnostic equipment, one would need DLA's total budget allocation and expenditure data for medical materiel over the relevant fiscal years (FY2021-FY2023). DLA procures a vast array of medical supplies, equipment, and pharmaceuticals. While $264 million is substantial for a single item, it might represent a smaller fraction of DLA's total medical supply chain budget, which encompasses everything from bandages to advanced imaging equipment.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Abbott Laboratories

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: $264,000,000

Exercised Options: $264,000,000

Current Obligation: $264,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2DE21D0053

IDV Type: IDC

Timeline