HHS Awards $26.5M Contract for OTC COVID-19 Tests to Atlantic Trading LLC

Contract Overview

Contract Amount: $26,510,400 ($26.5M)

Contractor: Atlantic Trading LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-05

End Date: 2025-04-02

Contract Duration: 209 days

Daily Burn Rate: $126.8K/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 - GAO CORRECTIVE ACTION

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $26.5 million to ATLANTIC TRADING LLC for work described as: OVER THE COUNTER (OTC) COVID-19 TESTS - GAO CORRECTIVE ACTION Key points: 1. Contract awarded to a single vendor, raising questions about competition. 2. The contract value is substantial for a single-source award. 3. Potential risks include limited price discovery and vendor lock-in. 4. The sector is healthcare, specifically diagnostic substance manufacturing.

Value Assessment

Rating: questionable

The contract value of $26.5 million for OTC COVID-19 tests appears high for a sole-source award without clear justification. Benchmarking against similar contracts is difficult due to the limited competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may not ensure the government receives the best value.

Taxpayer Impact: Taxpayers may be overpaying due to the lack of competitive bidding, potentially diverting funds from other critical health initiatives.

Public Impact

Ensures availability of essential COVID-19 testing supplies. Lack of competition could lead to higher costs for taxpayers. Potential for reduced innovation if other vendors are excluded.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Ensures supply of critical medical items
Contract awarded to a US-based company

Sector Analysis

This contract falls within the healthcare sector, specifically in the manufacturing of in-vitro diagnostic substances. Spending in this area is critical for public health preparedness, but competitive procurement is usually preferred to ensure cost-effectiveness.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, which could be a missed opportunity for economic inclusion.

Oversight & Accountability

The GAO's involvement suggests prior issues or scrutiny, highlighting the need for robust oversight to ensure fair and competitive contracting practices.

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 lacks transparency.
Potential for inflated pricing.
Limited market competition.
No small business participation evident.
GAO corrective action implies prior issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $26.5 million to ATLANTIC TRADING LLC. OVER THE COUNTER (OTC) COVID-19 TESTS - GAO CORRECTIVE ACTION

Who is the contractor on this award?

The obligated recipient is ATLANTIC TRADING 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 $26.5 million.

What is the period of performance?

Start: 2024-09-05. End: 2025-04-02.

What is the justification for awarding this contract sole-source?

The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are used when only one vendor can meet the requirement, there's an urgent need, or for specific research and development purposes. Without this information, it's difficult to assess the necessity and potential value.

What is the risk of price inflation with this sole-source contract?

The risk of price inflation is significant with sole-source contracts. Without competitive pressure, the awarded vendor may not be incentivized to offer the lowest possible price. This can lead to taxpayers potentially overpaying for the goods or services received, especially for high-volume items like COVID-19 tests.

How effective will this contract be in meeting the nation's testing needs?

The effectiveness hinges on the vendor's ability to deliver the specified quantity and quality of OTC COVID-19 tests within the contract period. While the contract aims to ensure supply, the lack of competition raises concerns about long-term cost-effectiveness and the potential for suboptimal resource allocation.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75A50424C00006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5900 BALCONES DR STE 4031, AUSTIN, TX, 78731

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $26,510,400

Exercised Options: $26,510,400

Current Obligation: $26,510,400

Actual Outlays: $12,544,721

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline