DHS awards $532M for 60M reusable gowns to Parkdale Advanced Materials during COVID-19 emergency

Contract Overview

Contract Amount: $532,157,711 ($532.2M)

Contractor: Parkdale Advanced Materials, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2020-04-23

End Date: 2020-09-14

Contract Duration: 144 days

Daily Burn Rate: $3.7M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DELIVERY ORDER FOR 60 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20472

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $532.2 million to PARKDALE ADVANCED MATERIALS, INC. for work described as: DELIVERY ORDER FOR 60 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19. Key points: 1. Significant award value of $532 million for essential medical supplies. 2. Sole-source award to Parkdale Advanced Materials, bypassing competitive bidding. 3. High risk of inflated pricing due to emergency procurement and lack of competition. 4. Focus on healthcare sector, critical during the national health crisis.

Value Assessment

Rating: questionable

The contract's value of $532 million for 60 million gowns suggests a per-unit cost of approximately $8.87. Without competitive bids, it's difficult to assess if this price is reasonable compared to market rates for similar emergency-use gowns.

Cost Per Unit: $8.87

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to the urgent national emergency. The lack of competition means there was no price discovery mechanism, potentially leading to a higher cost for taxpayers.

Taxpayer Impact: The absence of competition during a critical shortage may have resulted in taxpayers paying a premium for these essential supplies.

Public Impact

Ensured supply of critical personal protective equipment during a pandemic. Supported national response efforts by providing necessary medical gear. Potential for taxpayer funds to be used inefficiently due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Emergency procurement conditions
High dollar value

Positive Signals

Fulfilled critical need for PPE
Rapid deployment of resources

Sector Analysis

This award falls within the Medical, Dental, and Hospital Equipment and Supplies sector. Spending in this sector surged dramatically during the COVID-19 pandemic due to unprecedented demand for PPE and medical equipment.

Small Business Impact

This contract was awarded to Parkdale Advanced Materials, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.

Oversight & Accountability

The emergency nature of this procurement may have bypassed some standard oversight procedures. Further review would be needed to confirm adherence to emergency procurement regulations and accountability for the funds expended.

Related Government Programs

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers
Department of Homeland Security Contracting
Federal Emergency Management Agency Programs

Risk Flags

Potential for overpayment due to lack of competition.
Limited transparency in pricing justification.
Risk of vendor lock-in for future emergency needs.
Absence of small business participation.
Urgency may have led to expedited, less scrutinized processes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $532.2 million to PARKDALE ADVANCED MATERIALS, INC.. DELIVERY ORDER FOR 60 MILLION REUSABLE GOWNS IN SUPPORT OF THE NATIONAL EMERGENCY DECLARATION FOR COVID-19.

Who is the contractor on this award?

The obligated recipient is PARKDALE ADVANCED MATERIALS, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $532.2 million.

What is the period of performance?

Start: 2020-04-23. End: 2020-09-14.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids, even under emergency conditions?

The justification for a sole-source award during the COVID-19 emergency likely centered on the extreme urgency and the need for immediate acquisition of critical supplies. Agencies may have argued that the time required for a competitive process would have jeopardized public health and safety, necessitating direct negotiation with a known or capable supplier.

How can the government ensure fair pricing and prevent price gouging when awarding large contracts under emergency, non-competitive circumstances?

To ensure fair pricing during emergencies, agencies can leverage existing government-wide contracts, conduct rapid market research to establish price benchmarks, negotiate aggressively based on historical data or cost analysis, and require detailed cost breakdowns from contractors. Post-award audits can also help identify and recoup any excessive profits.

What is the long-term impact of relying on sole-source emergency contracts on market competition and future supply chain resilience?

Over-reliance on sole-source emergency contracts can stifle competition by favoring incumbent or pre-selected vendors, potentially leading to complacency and higher prices in the long run. It can also hinder the development of a diverse and resilient supply chain by not providing opportunities for new or smaller businesses to enter the market.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 531 COTTON BLOSSOM CIR, GASTONIA, NC, 28054

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $532,157,711

Exercised Options: $532,157,711

Current Obligation: $532,157,711

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70FB7020D00000013

IDV Type: IDC

Timeline