HHS awards $67.9M for isolation gowns, with 23 offers received under full and open competition

Contract Overview

Contract Amount: $67,921,798 ($67.9M)

Contractor: TWO ONE TWO NEW York, Inc.

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: $62.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 23

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ISOLATION GOWNS

Place of Performance

Location: BRENTWOOD, SUFFOLK County, NEW YORK, 11717

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $67.9 million to TWO ONE TWO NEW YORK, INC. for work described as: ISOLATION GOWNS Key points: 1. The contract value represents a significant investment in essential medical supplies. 2. A high number of offers suggests a competitive market for isolation gowns. 3. The firm-fixed-price structure aims to control costs and provide predictability. 4. The contract duration of nearly three years allows for sustained supply chain support. 5. The awardee's location in New York may indicate regional supply chain considerations. 6. The specific product category points to a focus on pandemic preparedness or ongoing healthcare needs.

Value Assessment

Rating: good

The contract value of $67.9 million for isolation gowns over approximately three years appears reasonable given the quantity and duration. Benchmarking against similar large-scale procurements for personal protective equipment (PPE) during public health emergencies suggests that pricing is likely competitive, especially with 23 offers received. The firm-fixed-price contract type further supports value by locking in costs for the government. Without specific per-unit cost data or detailed comparisons to market rates for this exact type of gown, a precise value-for-money assessment is challenging, but the competitive bidding process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is the preferred method for federal procurements. The solicitation received 23 offers, indicating a robust level of interest and a healthy competitive environment. A high number of bidders generally leads to better price discovery and allows the government to select the offer that provides the best overall value, considering both price and other factors. This level of competition suggests that the market is capable of meeting the government's needs.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government secured a favorable deal on essential medical supplies.

Public Impact

Healthcare facilities nationwide will benefit from a reliable supply of isolation gowns. The contract ensures the availability of critical personal protective equipment (PPE) for healthcare workers. The geographic impact is national, supporting healthcare providers across the United States. This procurement supports jobs within the surgical and medical instrument manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the sole awardee faces unforeseen issues.
Ensuring consistent quality and compliance with standards across all delivered gowns.
Managing the logistics of delivering a large volume of gowns nationwide.

Positive Signals

Strong competition with 23 offers indicates market readiness and capacity.
Firm-fixed-price contract provides cost certainty for the government.
Longer contract duration allows for stable supply and planning.
Awardee's location in New York may facilitate efficient distribution to the Northeast corridor.

Sector Analysis

The surgical and medical instrument manufacturing sector is a critical component of the healthcare supply chain, particularly for personal protective equipment (PPE). This contract falls within a segment focused on essential disposable medical supplies. The market for isolation gowns is substantial, driven by routine healthcare operations and amplified by public health emergencies. Comparable spending benchmarks for PPE procurement during the COVID-19 pandemic show significant government investment in such items, underscoring the importance of this contract.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the large number of bidders (23) suggests that small businesses may have participated in the bidding process or could be involved as subcontractors. The government encourages small business participation, and large prime contracts often create subcontracting opportunities. Further analysis would be needed to determine the extent of small business involvement, either directly or indirectly, in fulfilling this requirement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS, which is responsible for ensuring preparedness for health security threats. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. The Inspector General for HHS may also provide oversight to ensure funds are used appropriately and efficiently.

Related Government Programs

Strategic National Stockpile
COVID-19 Relief Funding
Personal Protective Equipment Procurement
Medical Supplies Contracts
HHS Supply Chain Management

Risk Flags

Potential for supply chain disruption if awardee faces production issues.
Ensuring consistent quality and compliance with medical standards over the contract term.
Logistical challenges in nationwide distribution of a large volume of gowns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $67.9 million to TWO ONE TWO NEW YORK, INC.. ISOLATION GOWNS

Who is the contractor on this award?

The obligated recipient is TWO ONE TWO NEW YORK, 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 $67.9 million.

What is the period of performance?

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

What is the historical spending pattern for isolation gowns by HHS or its components like ASPR?

Analyzing historical spending on isolation gowns by HHS, particularly through ASPR, is crucial for context. While specific figures for isolation gowns alone are not readily available without deeper data dives, ASPR's budget and spending have significantly increased during public health emergencies, such as the COVID-19 pandemic, to procure vast quantities of PPE. Prior to major health crises, spending would likely be more consistent and tied to routine healthcare needs and the Strategic National Stockpile (SNS) replenishment. The $67.9 million awarded here suggests a substantial, potentially ongoing, need beyond routine replenishment, possibly reflecting sustained preparedness efforts or a large-scale stocking initiative. Comparing this award to pre-pandemic spending levels would highlight the impact of recent health security concerns on procurement volumes and values.

How does the per-unit cost of these isolation gowns compare to market rates or similar government contracts?

Determining the precise per-unit cost requires access to the detailed pricing structure within the contract, which is not provided in the summary data. However, the fact that 23 offers were received under full and open competition suggests that the pricing is likely competitive. If the government secured a favorable price, it would be reflected in the total award amount relative to the quantity and quality of gowns procured. To perform a thorough benchmark, one would compare the implied per-unit cost (Total Award / Estimated Quantity) against recent government contracts for similar isolation gowns (e.g., Level 1, 2, 3 protection) and against commercial market prices from reputable suppliers. A higher-than-market price could indicate specific quality requirements, expedited delivery needs, or less competitive bidding than initially suggested by the number of offers.

What are the specific quality standards and performance requirements for these isolation gowns?

The contract data indicates the product is 'ISOLATION GOWNS' and the manufacturing falls under 'Surgical and Medical Instrument Manufacturing.' While specific standards (e.g., AAMI levels, material composition, barrier protection ratings) are not detailed in the provided summary, federal contracts for medical supplies typically include stringent quality and performance specifications. These often reference standards set by organizations like the Association for the Advancement of Medical Instrumentation (AAMI) or the Food and Drug Administration (FDA) for medical devices. Requirements would likely cover fluid resistance, breathability, seam integrity, cuff type, and closure methods. The firm-fixed-price nature of the contract implies that the contractor is responsible for meeting these defined specifications, and failure to do so could result in contract penalties or termination.

What is the track record of TWO ONE TWO NEW YORK, INC. in fulfilling federal contracts, particularly for medical supplies?

Information on the track record of TWO ONE TWO NEW YORK, INC. is essential for assessing performance risk. A review of federal procurement databases (like SAM.gov or FPDS) would reveal their past contract awards, performance history, and any reported issues or successes. For a contract of this magnitude ($67.9 million), it is expected that the government would have vetted the contractor's past performance. Key indicators to examine include on-time delivery rates, quality compliance, and any history of contract disputes or terminations. If the company has a strong history of successfully delivering similar medical supplies on time and to specification, it significantly de-risks this current award. Conversely, a history of poor performance would raise concerns about the government's due diligence.

How does the duration of this contract (nearly 3 years) impact supply chain resilience and cost-effectiveness?

The contract duration of 1094 days (approximately three years) offers significant advantages for both supply chain resilience and cost-effectiveness. For resilience, it provides a stable and predictable source of essential isolation gowns, reducing the risk of stockouts and allowing healthcare facilities to maintain adequate inventory levels. This is particularly important for ongoing operational needs and potential future surges in demand. From a cost perspective, a longer-term commitment can enable the contractor to achieve economies of scale in production and procurement of raw materials, potentially leading to lower per-unit costs over the contract's life. It also reduces the administrative burden and cost associated with frequent re-solicitation and contract award processes for the government.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument 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: 60 HEARTLAND BLVD, EDGEWOOD, NY, 11717

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Manufacturer of Goods, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $83,572,266

Exercised Options: $72,192,000

Current Obligation: $67,921,798

Actual Outlays: $26,698,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline