HHS awards $34M for COVID-19 saliva test, a sole-source contract for analytical instruments

Contract Overview

Contract Amount: $34,016,056 ($34.0M)

Contractor: Standard Biotools Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-07-30

End Date: 2021-12-30

Contract Duration: 518 days

Daily Burn Rate: $65.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RADX PROGRAM: TECH PROJECT NO 6114 FLUIDIGM ADVANTA DX SARS-COV-2 RT-PCR ASSAY FOR SALIVA

Place of Performance

Location: SOUTH SAN FRANCISCO, SAN MATEO County, CALIFORNIA, 94080

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $34.0 million to STANDARD BIOTOOLS INC for work described as: RADX PROGRAM: TECH PROJECT NO 6114 FLUIDIGM ADVANTA DX SARS-COV-2 RT-PCR ASSAY FOR SALIVA Key points: 1. Contract awarded to Standard BioTools Inc. for a definitive contract. 2. The contract duration is 518 days, ending December 30, 2021. 3. The product is the Fluidigm Advanta DX SARS-CoV-2 RT-PCR Assay for Saliva. 4. This contract falls under the NAICS code 334516 for Analytical Laboratory Instrument Manufacturing. 5. The contract was not available for competition, indicating a sole-source award. 6. The contract type is Firm Fixed Price, which sets a ceiling on costs. 7. The award was made by the National Institutes of Health (NIH) within HHS. 8. The contract value is approximately $34 million.

Value Assessment

Rating: questionable

The contract value of $34 million for a specific COVID-19 assay kit and associated instruments appears high, especially considering the sole-source nature of the award. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition raises concerns about whether the government secured the best possible value for this significant expenditure. Further analysis would be needed to compare the per-unit cost of tests or instrument components to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The data indicates it was 'NOT AVAILABLE FOR COMPETITION'. This suggests that only one vendor, Standard BioTools Inc., was deemed capable of fulfilling the requirement, or that circumstances did not permit a competitive process. The lack of multiple bidders means there was no price discovery through market forces, potentially leading to a higher price than if multiple companies had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competition. Without a competitive process, there is less assurance that the price reflects the lowest cost achievable for the required goods and services.

Public Impact

The primary beneficiaries are likely public health laboratories and research institutions requiring rapid diagnostic testing for SARS-CoV-2. The contract delivers a specific RT-PCR assay for saliva samples, enabling COVID-19 detection. The geographic impact is primarily within the United States, supporting the national response to the pandemic. Workforce implications include the need for trained personnel to operate the analytical instruments and conduct the tests.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Contract duration and value warrant scrutiny for potential cost overruns or inefficiencies.
Dependence on a single supplier for critical diagnostic components.

Positive Signals

Addresses a critical public health need during the COVID-19 pandemic.
Utilizes a specific assay (Fluidigm Advanta DX) for saliva-based testing, potentially offering advantages.
Awarded to a company with expertise in analytical laboratory instruments.
Firm Fixed Price contract provides cost certainty for the government.

Sector Analysis

The contract falls within the Analytical Laboratory Instrument Manufacturing sector (NAICS 334516). This sector is crucial for scientific research, diagnostics, and quality control across various industries, including healthcare and biotechnology. The market for diagnostic testing, particularly for infectious diseases like COVID-19, experienced significant growth and demand during the pandemic. This contract represents a specific procurement within that larger market, focused on enabling molecular diagnostic testing capabilities.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions or subcontracting requirements. Given the specialized nature of the product and the sole-source award, it is unlikely that small businesses were directly involved as primary awardees. Further investigation would be needed to determine if any subcontracting opportunities for small businesses were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the National Institutes of Health (NIH) and the Department of Health and Human Services (HHS). Mechanisms would include contract administration, performance monitoring, and potentially reviews by the HHS Office of Inspector General (OIG) if concerns arise regarding fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but reporting requirements for federal contracts would still apply.

Related Government Programs

RADX Program
COVID-19 Testing Contracts
NIH Research and Development Contracts
Diagnostic Assay Procurements
Analytical Instrument Purchases

Risk Flags

Sole-source award raises concerns about price competition.
Lack of transparency regarding justification for sole-sourcing.
High contract value warrants scrutiny for value for money.
Potential for vendor lock-in with a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $34.0 million to STANDARD BIOTOOLS INC. RADX PROGRAM: TECH PROJECT NO 6114 FLUIDIGM ADVANTA DX SARS-COV-2 RT-PCR ASSAY FOR SALIVA

Who is the contractor on this award?

The obligated recipient is STANDARD BIOTOOLS INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $34.0 million.

What is the period of performance?

Start: 2020-07-30. End: 2021-12-30.

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

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. Typically, sole-source justifications are based on factors such as the urgency of the requirement, the unavailability of other sources, or the unique capabilities of a single contractor. For a critical need like COVID-19 testing during a pandemic, agencies might justify sole-sourcing if only one vendor could rapidly supply the necessary technology or if proprietary technology was involved. However, without the official justification document, the precise reasons remain speculative. This lack of transparency is a common concern with sole-source awards, as it limits the public's understanding of why competitive processes were bypassed.

How does the $34 million contract value compare to similar COVID-19 diagnostic assay procurements?

Directly comparing the $34 million value is challenging without knowing the exact quantity of assays and instruments procured, as well as the specific performance characteristics. However, during the height of the pandemic, federal agencies awarded billions of dollars for various COVID-19 testing solutions, including PCR assays, antigen tests, and related equipment. Large-scale procurements for high-throughput PCR systems and reagents could easily reach tens of millions of dollars. The sole-source nature of this award, however, raises questions about whether this represented a competitive market price or a premium paid due to lack of competition. Benchmarking against other sole-source awards for similar technologies would be necessary for a more precise value assessment.

What are the potential risks associated with a sole-source award for critical health technology?

The primary risk of a sole-source award for critical health technology is the potential for inflated costs due to the absence of competitive bidding. Without competing offers, the government may not achieve the best possible price or value. Another risk is vendor lock-in, where the agency becomes dependent on a single supplier, potentially limiting future flexibility or access to alternative solutions. Furthermore, sole-source awards can sometimes indicate a lack of market readiness or insufficient planning to engage multiple potential suppliers. This dependence can also pose supply chain risks if the sole provider experiences production issues or goes out of business.

What is the track record of Standard BioTools Inc. in supplying federal agencies with similar diagnostic equipment?

Standard BioTools Inc. (formerly Fluidigm Corporation) has a history of providing tools for life science research and clinical diagnostics. While specific details of their past federal contracts are not provided in this data snippet, the company is known for its microfluidic-based systems and assays. Federal agencies, particularly NIH and other research institutions, have procured instruments and consumables from companies in this space for various research applications. Assessing their track record would involve reviewing their performance on previous government contracts, including delivery timeliness, product quality, and adherence to specifications. Their established presence in the life sciences suggests a degree of capability, but specific performance data on prior federal awards would be needed for a comprehensive evaluation.

How does the duration of the contract (518 days) align with the typical lifecycle of diagnostic assay procurements?

A contract duration of 518 days (approximately 17 months) for a definitive contract involving diagnostic assays and instruments is not unusual, especially for a project with a defined scope and end date. Diagnostic technologies, particularly in response to a rapidly evolving pandemic, often require timely deployment but also involve integration, training, and validation phases. This duration suggests the contract covered not just the initial supply but potentially ongoing support, consumables, or related services over a significant period. Shorter durations might be typical for simple supply orders, while longer ones could indicate complex system implementation or multi-year service agreements. The 518-day term appears reasonable for establishing and utilizing a specific diagnostic capability.

What is the significance of the NAICS code 334516 (Analytical Laboratory Instrument Manufacturing) in the context of this award?

The NAICS code 334516 signifies that the primary business activity of the contractor, or the nature of the goods/services procured, relates to the manufacturing of analytical and scientific laboratory instruments. This includes equipment used for testing, measuring, and controlling the quality of materials, as well as instruments for laboratory analysis. In the context of this award for a SARS-CoV-2 RT-PCR assay, this code is highly relevant as it encompasses the instruments (e.g., PCR machines, fluidic systems) required to run the assay, and potentially the assay kits themselves if manufactured by the same entity. It places the procurement within the broader industrial and technological sector supporting scientific and medical diagnostics.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2 TOWER PL STE 2000, SOUTH SAN FRANCISCO, CA, 94080

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

Financial Breakdown

Contract Ceiling: $34,016,056

Exercised Options: $34,016,056

Current Obligation: $34,016,056

Actual Outlays: $34,016,056

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline