VA awards $31.9M for COVID-19 PPE gowns to Americare, LLC, via sole-source purchase order

Contract Overview

Contract Amount: $31,889,320 ($31.9M)

Contractor: Americare, LLC.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-03-23

End Date: 2021-03-22

Contract Duration: 364 days

Daily Burn Rate: $87.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COVID-19 PPE LEVEL 4 GOWNS

Place of Performance

Location: NORCROSS, GWINNETT County, GEORGIA, 30093

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31.9 million to AMERICARE, LLC. for work described as: COVID-19 PPE LEVEL 4 GOWNS Key points: 1. Contract awarded without competition, raising questions about potential overpayment and market price. 2. Sole-source award limits opportunities for other suppliers and potentially reduces price discovery. 3. The contract duration of 364 days aligns with the immediate needs of the pandemic. 4. Awarded under the 'Surgical Appliance and Supplies Manufacturing' NAICS code, indicating a focus on medical supplies. 5. The firm fixed-price contract type provides cost certainty for the government. 6. Geographic location of the vendor (Georgia) may influence delivery times and logistics.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The $31.9 million award for Level 4 gowns suggests a significant volume purchase. However, without comparable contract data or market analysis for similar PPE during the pandemic, assessing whether this price represents fair market value is challenging. The sole-source nature means the VA did not leverage competition to drive down costs, potentially leading to a higher per-unit price than could have been achieved otherwise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one responsible source is available or when urgent and compelling circumstances prevent competition. The lack of competition means that multiple vendors did not have the opportunity to bid, which can limit price negotiation and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the price reductions that typically result from multiple offers.

Public Impact

Veterans receiving care at VA facilities benefit from the availability of essential PPE. The contract ensures a supply of Level 4 isolation gowns, critical for protecting healthcare workers and patients. The geographic impact is primarily within the VA healthcare system, serving veterans nationwide. The contract supports the workforce of Americare, LLC, and potentially its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in inflated pricing.
Sole-source awards can set a precedent for future non-competitive procurements.
Transparency is reduced without a competitive bidding process.
Potential for vendor lock-in if alternatives are not explored post-award.

Positive Signals

Awarded to meet urgent pandemic needs, ensuring critical supply.
Firm fixed-price contract provides cost predictability.
Contract duration aligns with the expected demand surge during the pandemic.

Sector Analysis

The healthcare sector, particularly during the COVID-19 pandemic, saw unprecedented demand for personal protective equipment (PPE). This contract falls within the broader medical supplies and equipment manufacturing industry. The NAICS code 339113 (Surgical Appliance and Supplies Manufacturing) covers establishments primarily engaged in manufacturing medical, surgical, and dental instruments and supplies. Spending in this category surged globally due to the pandemic, with governments acting as major purchasers.

Small Business Impact

This contract was awarded to Americare, LLC, and there is no indication of a small business set-aside. The data does not specify if Americare, LLC is a small business. If it is a large business, there are no direct subcontracting implications for small businesses mentioned in this award. The absence of a set-aside means opportunities for small businesses to directly compete for this specific contract were not prioritized.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for the oversight of this contract. As a purchase order, it falls under the VA's procurement regulations. Transparency is limited due to the sole-source nature of the award. Accountability would be managed through contract performance monitoring and payment verification by the VA contracting officer. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

COVID-19 Pandemic Response Contracts
Personal Protective Equipment Procurement
Medical Supplies and Equipment Contracts
Department of Veterans Affairs Medical Services

Risk Flags

Sole-source award lacks competitive pricing.
Potential for overpayment due to non-competitive procurement.
Limited transparency in the award process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31.9 million to AMERICARE, LLC.. COVID-19 PPE LEVEL 4 GOWNS

Who is the contractor on this award?

The obligated recipient is AMERICARE, LLC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2020-03-23. End: 2021-03-22.

What is the typical profit margin for Level 4 isolation gowns in the current market?

Determining the typical profit margin for Level 4 isolation gowns is complex and varies significantly based on manufacturer, material costs, production volume, and market demand. During the height of the COVID-19 pandemic, prices for PPE, including isolation gowns, were highly volatile due to extreme demand and supply chain disruptions. While pre-pandemic margins might have been in the 10-20% range for standard medical supplies, pandemic-driven pricing could have pushed margins higher for suppliers able to meet urgent needs. Without specific cost breakdowns from Americare, LLC, or access to market analyses from the period, it's impossible to state a precise profit margin. However, the lack of competition in this sole-source award suggests the VA may not have secured the most cost-effective pricing available in a more competitive scenario.

How does the $31.9 million award compare to other VA PPE procurements during the pandemic?

Comparing this $31.9 million award to other VA PPE procurements during the pandemic requires access to a broader dataset of VA contracts. However, it is reasonable to assume that this represents a significant investment, given the scale of the COVID-19 crisis and the critical need for protective gear. The VA, like other federal agencies, rapidly procured vast quantities of PPE. Awards of this magnitude were not uncommon for essential items like gowns, masks, and ventilators during peak demand. The key differentiator here is the sole-source nature of this specific award, which contrasts with potentially competitively bid contracts for similar items that might have yielded different price points.

What are the specific requirements for 'Level 4' isolation gowns?

Level 4 isolation gowns are defined by the Association for the Advancement of Medical Instrumentation (AAMI) standards and represent the highest level of protection. These gowns are designed to protect healthcare workers from infectious agents during high-risk procedures where substantial fluid exposure is possible. Key characteristics include resistance to fluid penetration (both liquid and particulate matter), high barrier protection against microorganisms, and often, a higher degree of material strength and integrity compared to lower-level gowns. They are typically used in operating rooms or during care for patients with highly contagious diseases, requiring robust protection against splashes and spills.

What is Americare, LLC's track record with federal contracts, particularly with the VA?

Information regarding Americare, LLC's specific track record with federal contracts, especially with the VA, is not detailed in the provided data snippet. A comprehensive analysis would require querying federal procurement databases like SAM.gov or FPDS. However, the fact that they were awarded a sole-source contract of this magnitude suggests they likely have some established relationship or capability recognized by the VA. Further investigation into their contract history, past performance reviews, and any prior awards would be necessary to fully assess their track record and reliability.

Were there any urgent and compelling circumstances cited to justify the sole-source award?

The provided data indicates the contract was awarded as a 'PURCHASE ORDER' and was 'NOT COMPETED', falling under the 'sole-source' category. While the specific justification for the sole-source award is not detailed in this snippet, the context of the COVID-19 pandemic (indicated by 'COVID-19 PPE' in the description) strongly suggests that 'urgent and compelling circumstances' were cited. During the early stages of the pandemic, federal agencies frequently invoked emergency procurement authorities to rapidly acquire essential supplies like PPE, often leading to sole-source awards due to immediate, critical needs and limited available suppliers.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1256 OAKBROOK DR SUITE D, NORCROSS, GA, 30093

Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $31,889,320

Exercised Options: $31,889,320

Current Obligation: $31,889,320

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline