DoD Awards $1.35 Billion for COVID-19 Antigen Test Kits to Abbott

Contract Overview

Contract Amount: $1,348,550,000 ($1.3B)

Contractor: Abbott Rapid DX North America LLC

Awarding Agency: Department of Defense

Start Date: 2022-01-12

End Date: 2022-06-30

Contract Duration: 169 days

Daily Burn Rate: $8.0M/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COVID-19 ANTIGEN OTC TEST KITS

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32810

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $1.35 billion to ABBOTT RAPID DX NORTH AMERICA LLC for work described as: COVID-19 ANTIGEN OTC TEST KITS Key points: 1. Significant award of $1.35 billion for essential COVID-19 testing supplies. 2. Abbott Rapid DX North America LLC is the sole awardee, raising questions about competition. 3. The contract falls under 'Full and Open Competition After Exclusion of Sources,' indicating a complex procurement process. 4. The sector is healthcare/medical supplies, critical during public health emergencies.

Value Assessment

Rating: fair

The award amount of $1.35 billion for test kits is substantial. Benchmarking against similar large-scale procurements for medical supplies during the pandemic is necessary to fully assess value. The 'firm fixed price' contract type suggests price certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while competition was sought, specific circumstances led to excluding certain potential sources. This method can impact price discovery and potentially lead to higher costs compared to unrestricted full and open competition.

Taxpayer Impact: The significant expenditure of $1.35 billion directly impacts taxpayer funds, allocated for critical public health resources. Ensuring the price reflects fair market value is paramount for responsible stewardship of these funds.

Public Impact

Ensures availability of critical COVID-19 testing supplies nationwide. Supports public health infrastructure and response capabilities. Potential for overpayment if competition was unduly restricted. Impacts the supply chain for diagnostic testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition due to 'Exclusion of Sources'
Large contract value requires careful price validation
Sole awardee raises concerns about market breadth

Positive Signals

Addresses critical need for testing kits
Firm fixed price provides cost certainty
Awarded to a known entity in the diagnostics field

Sector Analysis

This contract falls within the healthcare and medical supplies sector, specifically focusing on diagnostic testing. Spending in this area surged during the COVID-19 pandemic to meet unprecedented demand. Benchmarks for similar large-scale procurements of antigen tests are essential for evaluating cost-effectiveness.

Small Business Impact

The data indicates that small businesses were not directly awarded this contract, as the sole awardee is Abbott Rapid DX North America LLC. Further analysis would be needed to determine if small businesses were involved as subcontractors or suppliers within the awarded contract's supply chain.

Oversight & Accountability

The contract type 'Full and Open Competition After Exclusion of Sources' suggests a deliberate procurement strategy that may warrant oversight to ensure fairness and prevent undue restrictions. The large dollar value necessitates robust accountability measures to track spending and ensure effective utilization of funds.

Related Government Programs

In-Vitro Diagnostic Substance Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for limited competition
Lack of clear per-unit cost benchmark
Sole awardee raises market concentration concerns
Complexity of 'Exclusion of Sources' procurement method

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.35 billion to ABBOTT RAPID DX NORTH AMERICA LLC. COVID-19 ANTIGEN OTC TEST KITS

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 (Department of the Army).

What is the total obligated amount?

The obligated amount is $1.35 billion.

What is the period of performance?

Start: 2022-01-12. End: 2022-06-30.

What specific factors led to the exclusion of other sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?

The exclusion of sources typically occurs due to specific technical requirements, urgent needs, or unique capabilities that only a limited number of vendors can meet. Understanding these factors is crucial. If the exclusion was not strictly justified by necessity, it could limit competitive pressure, potentially leading to a higher price than if a broader range of vendors had participated. Further documentation from the procurement process is needed to detail the rationale.

How does the per-unit cost of these antigen test kits compare to other similar large-scale government or commercial procurements during the same period?

A comprehensive comparison of the per-unit cost against other large-scale procurements is essential for assessing value. Without access to specific unit pricing and volume discounts from comparable contracts, it's difficult to definitively state if this $1.35 billion award represents a competitive price. Factors like manufacturing scale, specific kit performance, and delivery timelines influence unit costs, requiring a detailed analysis of contract terms.

What mechanisms are in place to ensure the quality and efficacy of these test kits, given the large volume and critical nature of their use in public health?

Ensuring the quality and efficacy of a large volume of critical medical supplies involves stringent testing, adherence to regulatory standards (like FDA approval), and potentially post-award inspections or performance monitoring. The Department of Defense and Army likely have quality assurance surveillance plans (QASPs) in place. Verifying compliance with these plans and tracking any reported issues or recalls would provide insight into the effectiveness of oversight.

Industry Classification

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

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W58P0522R0003

Offers Received: 20

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: $1,348,550,000

Exercised Options: $1,348,550,000

Current Obligation: $1,348,550,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline