USMMA spent $31.99M on 80.5M disposable masks from 3 Star Papers Ltd

Contract Overview

Contract Amount: $31,991 ($32.0K)

Contractor: 3 Star Papers Ltd

Awarding Agency: Department of Transportation

Start Date: 2020-05-20

End Date: 2020-05-20

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: USMMA DISPOSABLE MASKS - 80,500K

Place of Performance

Location: NEWARK, ESSEX County, NEW JERSEY, 07114

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $31,990.7 to 3 STAR PAPERS LTD for work described as: USMMA DISPOSABLE MASKS - 80,500K Key points: 1. The contract represents a significant expenditure for disposable masks, raising questions about unit cost and necessity. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The sole awardee, 3 Star Papers Ltd., specializes in carbon paper and inked ribbon manufacturing, an unusual fit for mask production. 4. The contract was awarded as a delivery order, indicating a specific, immediate need. 5. The fixed-firm price structure offers cost certainty but may not capture potential volume discounts. 6. The contract duration of zero days suggests an immediate delivery requirement.

Value Assessment

Rating: questionable

The unit cost for these disposable masks appears high when considering the sheer volume purchased. While the total expenditure is substantial, the lack of detailed performance metrics or comparison data makes a definitive value assessment difficult. The contract's focus on a single delivery order for a large quantity suggests a potential for overstocking or a reactive procurement rather than strategic inventory management. Further analysis of the market price for similar quantities during the contract period is needed to benchmark the value effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six bids received. This indicates a robust bidding process that should theoretically lead to competitive pricing. However, the fact that only one award was made suggests that either 3 Star Papers Ltd. was the most competitive bidder across all criteria, or there were specific requirements that narrowed the field significantly. The level of competition is a positive indicator for price discovery.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down prices. With six bidders, there was a good opportunity for the government to secure a favorable price for these essential supplies.

Public Impact

The primary beneficiaries are likely the personnel of the U.S. Merchant Marine Academy (USMMA) who require personal protective equipment. The service delivered is the provision of disposable masks, a critical item for health and safety. The geographic impact is localized to the USMMA facilities, likely in New Jersey. Workforce implications are related to ensuring the health and safety of the academy's staff and cadets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract awarded to a company whose primary NAICS code is 'Carbon Paper and Inked Ribbon Manufacturing', raising questions about their expertise in producing or sourcing medical-grade disposable masks.
The large quantity of masks procured (80.5 million) may exceed immediate needs, potentially leading to waste or obsolescence if not managed properly.
Lack of detailed performance specifications or quality assurance metrics in the provided data makes it difficult to assess the quality of the masks received.
The contract was awarded as a delivery order with a zero-day duration, suggesting a potentially rushed procurement process that might not have allowed for thorough vetting or price negotiation.

Positive Signals

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid, which can lead to better pricing.
Six bids were received, suggesting a healthy level of interest and potential for competitive pricing.
The contract utilized a firm-fixed-price structure, which provides cost certainty for the government.

Sector Analysis

The procurement of disposable masks falls under the broader category of medical supplies and personal protective equipment (PPE). The market for PPE, especially during periods of heightened demand (like the COVID-19 pandemic era, implied by the 2020 award date), can be volatile. While specific benchmarks for bulk mask purchases are difficult to ascertain without more context on the exact type and quality of masks, the sheer volume suggests a significant transaction within this sector. The award to a non-traditional PPE manufacturer warrants further scrutiny regarding supply chain reliability and product quality.

Small Business Impact

The data indicates that small business participation was not a factor in this specific award, as the 'ss' (small business set-aside) field is false. There is no information provided regarding subcontracting plans or actual performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this particular contract is likely minimal, unless the prime contractor engaged small businesses as suppliers without it being explicitly noted in this summary data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Transportation's Office of Inspector General, given the awarding agency is the Maritime Administration. Transparency is partially addressed by the contract being publicly available through federal procurement databases. Accountability measures would be tied to the delivery of the specified goods and adherence to the firm-fixed-price terms. However, without detailed performance reports or audit findings, a comprehensive assessment of oversight effectiveness is limited.

Related Government Programs

Federal Supply Schedule (FSS) Contracts for Medical Supplies
Department of Health and Human Services (HHS) PPE Procurements
Defense Logistics Agency (DLA) Troop Support Medical Supplies
General Services Administration (GSA) Schedules

Risk Flags

Non-traditional supplier for critical medical supplies
Potentially high unit cost for bulk purchase
Unclear justification for sole award among multiple bidders
Large quantity may exceed immediate institutional needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $31,990.7 to 3 STAR PAPERS LTD. USMMA DISPOSABLE MASKS - 80,500K

Who is the contractor on this award?

The obligated recipient is 3 STAR PAPERS LTD.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Maritime Administration).

What is the total obligated amount?

The obligated amount is $31,990.7.

What is the period of performance?

Start: 2020-05-20. End: 2020-05-20.

What is the typical unit cost for disposable masks of similar quality and quantity during the contract award period?

Determining the precise unit cost benchmark for disposable masks during May 2020 is challenging due to market volatility and varying quality standards. However, reports from that period indicated significant price fluctuations. Bulk purchases of standard surgical masks could range from $0.05 to $0.50 per mask, depending on manufacturer, certifications (e.g., FDA approval), and order volume. The provided data indicates a total spend of $31,990,700 for 80,500,000 masks, resulting in a unit cost of approximately $0.397. This falls within the higher end of the estimated range, especially considering the large quantity, which typically allows for lower per-unit pricing. Further investigation into the specific type and certifications of the masks procured by USMMA is necessary for a more accurate comparison.

What is the track record of 3 Star Papers Ltd. in supplying medical or protective equipment?

3 Star Papers Ltd. is primarily registered under NAICS codes related to 'Carbon Paper and Inked Ribbon Manufacturing' and 'Other Commercial Printing'. Their historical business focus does not appear to be in the medical supply or personal protective equipment sector. This raises a significant question about their capability to reliably source, quality-control, and deliver 80.5 million disposable masks. While they may have pivoted or subcontracted for this contract, their core business expertise does not align with the product procured, suggesting a potential risk factor in terms of supply chain management and product quality assurance.

How does the quantity of masks procured compare to the typical needs of the USMMA?

The procurement of 80.5 million disposable masks by the U.S. Merchant Marine Academy (USMMA) appears to be an exceptionally large quantity for an institution of its size. While specific daily usage figures are not publicly available, typical operational needs for such an academy would likely be in the thousands or tens of thousands per month, not tens of millions. This suggests the possibility of the masks being intended for strategic national stockpiling, distribution to a wider network beyond the academy, or a potential overestimation of immediate requirements. The zero-day duration for delivery further complicates this, implying an immediate need for the entire quantity, which seems disproportionate to a single academy's operational use.

What are the implications of awarding a large PPE contract to a company not specializing in PPE?

Awarding a large contract for personal protective equipment (PPE) like disposable masks to a company not specializing in this area, such as 3 Star Papers Ltd., carries several implications. Firstly, it raises concerns about the supply chain's integrity and the quality control processes for the masks. The company might be acting as a broker or relying heavily on subcontractors, introducing potential points of failure or quality degradation. Secondly, it could indicate a market where traditional suppliers were either unable to meet demand or were priced out, leading agencies to seek alternative sources. This situation can also strain the capacity of non-specialized firms, potentially impacting their core business operations and their ability to fulfill the contract requirements effectively and on time.

Were there any specific justifications provided for the sole award despite full and open competition?

The provided data indicates that the contract was awarded under 'FULL AND OPEN COMPETITION' with 'NO' (number of offers) being 6. However, it specifies a single award ('AW' - Awardee is singular). Without access to the full contract award documentation or justification for award (J&A), it's difficult to ascertain the specific reasons for a sole award among six bids. Typically, in full and open competition, the award goes to the responsible offeror whose proposal is determined to be the most advantageous to the government, considering price and other evaluation factors. It's possible that 3 Star Papers Ltd. submitted the lowest price, offered the best overall value, or was the only bidder meeting all mandatory requirements, despite the competition.

Industry Classification

NAICS: Manufacturing › Other Miscellaneous Manufacturing › Carbon Paper and Inked Ribbon Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 249 ASTOR ST, NEWARK, NJ, 07114

Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,991

Exercised Options: $31,991

Current Obligation: $31,991

Actual Outlays: $31,991

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS02F0094S

IDV Type: FSS

Timeline