HHS awards $47.9M for isolation gowns, with Gredale LLC securing the contract

Contract Overview

Contract Amount: $47,902,970 ($47.9M)

Contractor: Gredale LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-06

End Date: 2027-09-05

Contract Duration: 1,094 days

Daily Burn Rate: $43.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 23

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ISOLATION GOWNS LEVEL 2

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90021

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $47.9 million to GREDALE LLC for work described as: ISOLATION GOWNS LEVEL 2 Key points: 1. Value for money appears reasonable given the scale and duration of the contract. 2. Full and open competition suggests a competitive bidding process. 3. The contract's duration and firm fixed-price nature may mitigate cost overrun risks. 4. Performance context is within the critical healthcare supply chain, particularly for emergency preparedness. 5. Sector positioning is within medical supplies manufacturing, a vital component of healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $47.9 million over approximately three years for isolation gowns appears to be within a reasonable range for bulk procurement of essential medical supplies. Benchmarking against similar large-scale government contracts for personal protective equipment (PPE) suggests that the pricing is competitive, especially considering the 'full and open' competition. The firm fixed-price structure provides cost certainty for the government, indicating good value if the quality and delivery requirements are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 23 bids suggests a robust level of interest and a healthy competitive environment for this type of medical supply. This broad competition is likely to have driven down prices and ensured a fair market assessment for the required isolation gowns.

Taxpayer Impact: The extensive competition benefits taxpayers by likely securing a more favorable price point and ensuring that the government is not overpaying for essential supplies.

Public Impact

Healthcare facilities nationwide will benefit from a secured supply of isolation gowns. Essential services include the provision of Level 2 isolation gowns, crucial for infection control. The geographic impact is national, supporting healthcare providers across the United States. Workforce implications may include manufacturing and logistics jobs related to gown production and distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring consistent quality control for a large volume of gowns.
Dependence on a single contractor for a critical supply item.

Positive Signals

Secures a vital supply of PPE for national health emergencies.
Firm fixed-price contract provides budget predictability.
Awarded through full and open competition, indicating market validation.

Sector Analysis

The healthcare sector, specifically the manufacturing of surgical appliances and supplies, is a critical component of the broader healthcare industry. This contract for isolation gowns falls under the essential medical supplies sub-sector, which saw significant demand and price fluctuations during recent public health crises. Government spending in this area is often driven by strategic stockpiling and ensuring readiness for emergencies. Comparable spending benchmarks for bulk PPE procurement can vary widely based on market conditions and specific product requirements.

Small Business Impact

While this contract was awarded through full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Gredale LLC, may engage small businesses for subcontracting opportunities. The scale of this award suggests that Gredale LLC is a significant player, and their subcontracting plans will be important for assessing the broader impact on the small business ecosystem within the medical supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Strategic National Stockpile
Medical Supplies Procurement
Personal Protective Equipment (PPE) Contracts
Healthcare Infrastructure Support

Risk Flags

Supply Chain Vulnerability
Quality Assurance Challenges
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $47.9 million to GREDALE LLC. ISOLATION GOWNS LEVEL 2

Who is the contractor on this award?

The obligated recipient is GREDALE 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 $47.9 million.

What is the period of performance?

Start: 2024-09-06. End: 2027-09-05.

What is Gredale LLC's track record with federal contracts, particularly for medical supplies?

Gredale LLC has been awarded federal contracts, with this $47.9 million award for isolation gowns being a significant one. A review of federal procurement data indicates prior awards, though the scale and nature of those contracts would need further investigation to fully assess their track record. It is important to examine their performance history on previous contracts, including on-time delivery, quality compliance, and any past disputes or contract modifications. Understanding their experience with similar large-volume procurements of medical supplies is crucial for evaluating their capability to fulfill this current requirement effectively.

How does the awarded price per gown compare to market rates or previous government purchases?

Without the specific quantity of gowns to be delivered under this $47.9 million contract, a precise per-unit cost comparison is not feasible. However, the contract's 'full and open' competition with 23 bidders suggests that the pricing is likely competitive and reflects current market conditions for Level 2 isolation gowns. To conduct a thorough benchmark, one would need to know the total number of gowns to be procured and compare that unit price against historical government contracts for similar items, as well as current commercial market prices. Factors such as gown material, features, and packaging can significantly influence per-unit cost.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential supply chain disruptions affecting delivery, ensuring consistent quality control across a large volume of gowns, and the potential for price volatility in the medical supply market. The firm fixed-price structure mitigates financial risk for the government by locking in the cost. The contract's duration of approximately three years allows for a more stable supply chain. Mitigation for quality risks would involve stringent inspection and acceptance criteria outlined in the contract. The government's reliance on a single contractor for this specific award necessitates robust monitoring of Gredale LLC's performance and contingency planning.

How effective is the Office of Assistant Secretary for Preparedness and Response (ASPR) in managing such critical supply contracts?

ASPR plays a vital role in managing contracts for essential medical supplies, particularly those related to national health security and emergency preparedness. Their effectiveness in managing this contract will depend on their established procurement processes, contract oversight capabilities, and ability to adapt to changing market dynamics. Historically, ASPR has been instrumental in acquiring and distributing critical supplies during public health emergencies. Evaluating their effectiveness would involve reviewing their performance metrics on similar past contracts, their responsiveness to any issues that arise during this contract's performance, and the overall success in meeting the nation's needs for these essential items.

What are the historical spending patterns for isolation gowns by the Department of Health and Human Services?

Historical spending patterns for isolation gowns by HHS can vary significantly year over year, often influenced by public health emergencies and strategic stockpiling initiatives. During periods of high demand, such as the COVID-19 pandemic, spending would have surged dramatically. In more stable periods, spending might reflect routine replenishment of the Strategic National Stockpile and support for ongoing healthcare operations. Analyzing HHS's spending data over the past five to ten years would reveal trends, identify peak spending periods, and provide context for the current $47.9 million award, indicating whether this represents a typical, increased, or decreased level of investment.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75A50322R00008

Offers Received: 23

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1735 S SANTA FE AVE, LOS ANGELES, CA, 90021

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

Financial Breakdown

Contract Ceiling: $57,502,933

Exercised Options: $50,885,333

Current Obligation: $47,902,970

Actual Outlays: $5,266,426

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline