HHS Awards $3.14M to Kwell Laboratories for OTC COVID-19 Tests

Contract Overview

Contract Amount: $31,384,584 ($31.4M)

Contractor: Kwell Laboratories Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-20

End Date: 2025-03-19

Contract Duration: 546 days

Daily Burn Rate: $57.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: OVER THE COUNTER (OTC) COVID-19 TESTS

Place of Performance

Location: RANCHO CUCAMONGA, SAN BERNARDINO County, CALIFORNIA, 91730

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.4 million to KWELL LABORATORIES INC for work described as: OVER THE COUNTER (OTC) COVID-19 TESTS Key points: 1. Contract awarded to Kwell Laboratories Inc. for Over-the-Counter (OTC) COVID-19 Tests. 2. The contract value is $3,138,458. 3. The contract was awarded by the Department of Health and Human Services (HHS). 4. The period of performance is from September 20, 2023, to March 19, 2025. 5. The product service code is not specified, but the North American Industry Classification System code is 325413 (In-Vitro Diagnostic Substance Manufacturing).

Value Assessment

Rating: fair

The contract value of $3.14M for OTC COVID-19 tests appears reasonable given the duration and the nature of the product. Benchmarking against similar large-scale procurements of diagnostic supplies would provide a clearer picture of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs than if multiple vendors had competed.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these COVID-19 tests.

Public Impact

Ensures availability of OTC COVID-19 tests for public health needs. Supports domestic manufacturing capabilities in the diagnostic sector. Potential for increased costs due to non-competitive award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment

Positive Signals

Ensures supply of critical health product
Supports domestic industry

Sector Analysis

The procurement falls within the Healthcare sector, specifically in the manufacturing of in-vitro diagnostic substances. Spending benchmarks for similar diagnostic supply contracts can vary widely based on volume, complexity, and market conditions.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. Future procurements could explore opportunities for small business participation in the supply chain.

Oversight & Accountability

The Department of Health and Human Services, through the Office of Assistant Secretary for Preparedness and Response, is responsible for this contract. Oversight should focus on ensuring the quality and timely delivery of the tests, as well as justifying the sole-source award.

Related Government Programs

In-Vitro Diagnostic Substance Manufacturing
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Sole-source award limits competition and potentially increases cost.
Lack of transparency on per-unit pricing makes value assessment difficult.
Potential for overpayment due to non-competitive nature.
Need for robust oversight to ensure product quality and delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.4 million to KWELL LABORATORIES INC. OVER THE COUNTER (OTC) COVID-19 TESTS

Who is the contractor on this award?

The obligated recipient is KWELL LABORATORIES INC.

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 $31.4 million.

What is the period of performance?

Start: 2023-09-20. End: 2025-03-19.

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

The justification for a sole-source award typically involves circumstances where only one responsible source is available or capable of meeting the government's needs. This could be due to proprietary technology, unique capabilities, or urgent and compelling requirements where competition is not feasible. A detailed review of the contract file would reveal the specific rationale provided by the agency.

What is the projected cost per test under this contract?

The provided data does not include the per-unit cost of the COVID-19 tests. To assess the value and taxpayer impact, a breakdown of the total contract value by the number of units procured is necessary. Without this, it's difficult to benchmark pricing against market rates or other government contracts.

How will the government ensure the quality and efficacy of these OTC COVID-19 tests?

The government typically ensures quality and efficacy through stringent contract terms, requiring adherence to FDA regulations and manufacturing standards. This includes potential site visits, quality assurance checks, and performance monitoring throughout the contract period. The Office of Assistant Secretary for Preparedness and Response would likely have specific protocols in place for monitoring the supplier.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75A50223C00042

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11149 ARROW ROUTE, RANCHO CUCAMONGA, CA, 91730

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,384,584

Exercised Options: $31,384,584

Current Obligation: $31,384,584

Actual Outlays: $31,384,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline