HHS awarded $237M for nitrile gloves, primarily to Airboss Defense Group, highlighting a significant investment in medical supplies

Contract Overview

Contract Amount: $236,917,637 ($236.9M)

Contractor: Airboss Defense Group, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-15

End Date: 2022-03-14

Contract Duration: 364 days

Daily Burn Rate: $650.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: NITRILE GLOVES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $236.9 million to AIRBOSS DEFENSE GROUP, LLC for work described as: NITRILE GLOVES Key points: 1. The contract value of $237 million represents a substantial commitment to securing essential medical equipment. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 3. A fixed-price contract type suggests cost predictability, but the absence of competition may obscure true market value. 4. The duration of one year for this large award indicates a focused, short-term need for these supplies. 5. The contract falls under the Surgical and Medical Instrument Manufacturing sector, a critical area for public health. 6. The award to a single entity raises questions about the resilience of the supply chain and potential single points of failure.

Value Assessment

Rating: questionable

The total award of $237 million for nitrile gloves over one year is a significant sum. Without competitive bidding, it is difficult to benchmark the value for money. The contract's fixed-price nature provides cost certainty for the government, but the lack of competition means there was no pressure to offer the lowest possible price. The per-unit cost, if calculable, would be a key metric to compare against market rates for similar bulk purchases, especially given the scale of this award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or in cases of urgent and compelling need. The lack of competition limits the government's ability to explore a wider range of suppliers, potentially leading to higher prices than if multiple bids were considered. It also bypasses the opportunity to foster broader market participation.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the selected contractor faces no direct price competition. This can also limit opportunities for other businesses to secure government contracts.

Public Impact

The primary beneficiaries are healthcare providers and facilities requiring a consistent supply of nitrile gloves for patient care and safety. The services delivered include the provision of essential personal protective equipment (PPE) crucial during public health emergencies. The geographic impact is national, ensuring availability of supplies across various healthcare settings within the United States. Workforce implications include supporting jobs within the medical supply manufacturing and distribution sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Lack of competition raises concerns about supply chain resilience and dependence on a single provider.
The large dollar amount awarded without competition warrants detailed justification and oversight.
Absence of multiple bidders may indicate barriers to entry or insufficient market outreach by the agency.

Positive Signals

The contract ensures a critical supply of personal protective equipment, vital for public health.
A fixed-price contract provides cost certainty for the government over the contract period.
The award addresses a specific, likely urgent, need for nitrile gloves.

Sector Analysis

The contract falls within the broader healthcare and medical supplies sector, specifically the manufacturing of surgical and medical instruments. This sector is critical for national health security, particularly in light of recent global health events. The market for nitrile gloves is substantial, with numerous domestic and international manufacturers. However, during periods of high demand or crisis, supply chain vulnerabilities can emerge, leading to sole-source awards to ensure immediate availability.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature further limits opportunities for small businesses to participate in this specific award. The focus was on securing a large volume of a critical item from a single, presumably capable, supplier, potentially overlooking the benefits of engaging the broader small business ecosystem for such a large procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). As a sole-source award, it likely underwent internal justification processes to meet regulatory requirements for non-competitive procurement. Transparency regarding the justification for the sole-source award and the pricing structure would be key areas for oversight. Inspector General involvement would be triggered by any indications of fraud, waste, or abuse.

Related Government Programs

Strategic National Stockpile
COVID-19 Pandemic Response Contracts
Personal Protective Equipment Procurement
Medical Supply Chain Management

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Supply chain concentration risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $236.9 million to AIRBOSS DEFENSE GROUP, LLC. NITRILE GLOVES

Who is the contractor on this award?

The obligated recipient is AIRBOSS DEFENSE GROUP, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $236.9 million.

What is the period of performance?

Start: 2021-03-15. End: 2022-03-14.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded on a 'SOLE-SOURCE' basis. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available or when there is an urgent and compelling need that cannot be satisfied through competitive means. Given the context of medical supplies and the timing (award date in March 2021), it is highly probable that this award was linked to the ongoing COVID-19 pandemic, where rapid procurement of essential items like nitrile gloves was critical to meet unprecedented demand and ensure healthcare worker safety. A formal justification document (e.g., a Justification and Approval, J&A) would detail the specific reasons and market research conducted, if any, to support the sole-source determination.

How does the contract's price compare to market rates for nitrile gloves during the award period?

Benchmarking the price of this $237 million contract against market rates is challenging without the specific per-unit cost and detailed contract terms. However, the period of performance (March 2021 - March 2022) was still within a time of elevated demand and potential supply chain disruptions due to the global pandemic. Prices for PPE, including nitrile gloves, had seen significant fluctuations. A sole-source award, by its nature, bypasses competitive bidding, which is the primary mechanism for ensuring favorable pricing. To assess value, one would need to compare the negotiated price per glove against publicly available data for similar bulk purchases by government agencies or large private sector entities during the same timeframe, considering factors like quality standards, delivery terms, and volume discounts.

What are the potential risks associated with a sole-source award of this magnitude?

A sole-source award of $237 million carries several risks. Firstly, the government may not achieve the best possible price due to the lack of competition, potentially leading to overspending. Secondly, it concentrates supply chain risk with a single vendor; if Airboss Defense Group faced production issues, delivery delays, or quality control problems, the government would have limited immediate alternatives. Thirdly, it can stifle innovation and market entry for other potential suppliers who might offer competitive pricing or superior products. Finally, without the transparency of a competitive process, there's a heightened need for robust government oversight to ensure the contractor meets all obligations and that the award remains justified.

What is the track record of Airboss Defense Group in supplying medical equipment to the government?

Airboss Defense Group, a subsidiary of Airboss Limited Partnership, has a history of supplying defense and safety equipment. While specific details on their track record for supplying nitrile gloves to HHS under this particular contract are not fully detailed in the provided data, the company is known for its manufacturing capabilities in areas like protective suits and other defense-related gear. Their ability to secure a large, sole-source contract for nitrile gloves suggests they possess the necessary production capacity and potentially existing relationships or qualifications deemed essential by HHS at the time of the award. Further investigation into their past performance on similar government contracts, including quality, delivery timeliness, and compliance, would provide a more comprehensive view of their track record.

How does this spending compare to overall federal spending on nitrile gloves or PPE?

This $237 million award represents a significant portion of federal spending on nitrile gloves, particularly for a single-year contract. Federal spending on PPE, including gloves, surged dramatically during the COVID-19 pandemic. Comparing this single contract to the total federal expenditure on gloves requires analyzing broader spending data from agencies like HHS, FEMA, and the Department of Defense during the pandemic years. It's likely that this award is part of a larger, multi-agency effort to build and maintain strategic reserves and meet immediate operational needs. Understanding the context of overall pandemic-related procurement is crucial to evaluating the scale and necessity of this specific contract.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75A50121C00027

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Airboss of America Corp (UEI: 247865264)

Address: 3341 75TH AVE STE GG, HYATTSVILLE, MD, 20785

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $236,917,637

Exercised Options: $236,917,637

Current Obligation: $236,917,637

Actual Outlays: $236,917,637

Contract Characteristics

Commercial Item: SUPPLIES OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Timeline