HHS awards $820M to Walgreens for COVID-19 testing via public-private partnership

Contract Overview

Contract Amount: $820,106,447 ($820.1M)

Contractor: Walgreen CO.

Awarding Agency: Department of Health and Human Services

Start Date: 2020-04-05

End Date: 2021-09-30

Contract Duration: 543 days

Daily Burn Rate: $1.5M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP

Place of Performance

Location: DEERFIELD, LAKE County, ILLINOIS, 60015

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $820.1 million to WALGREEN CO. for work described as: COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP Key points: 1. Significant investment in COVID-19 testing infrastructure. 2. Sole-source award to a major retail pharmacy chain. 3. Potential for rapid deployment but limited competition. 4. Focus on point-of-care and self-swab testing.

Value Assessment

Rating: fair

The contract value of $820 million is substantial for testing services. Benchmarking against similar large-scale public health initiatives or private sector testing contracts is difficult due to the unique nature and urgency of the COVID-19 pandemic response.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach may have expedited procurement during an emergency but likely bypassed potential cost savings and innovation that could have resulted from a competitive process.

Taxpayer Impact: Taxpayer funds were used to secure critical testing capabilities, with the value reflecting the scale of the public health need and the partner's capacity.

Public Impact

Increased access to COVID-19 testing for the public. Leveraged existing retail pharmacy infrastructure for distribution. Supported public health response efforts during the pandemic.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to higher costs.
Contract duration and value are significant.
Reliance on a single provider for a critical service.

Positive Signals

Rapid deployment of testing capabilities.
Partnership leveraged private sector infrastructure.
Addressed urgent public health need.

Sector Analysis

The healthcare sector, particularly diagnostic services, saw massive investment during the pandemic. This contract falls under medical laboratories (NAICS 621511), with significant government spending focused on testing and treatment solutions.

Small Business Impact

This contract was awarded to Walgreens, a large corporation, and does not appear to have specific provisions or subcontracts allocated to small businesses based on the provided data.

Oversight & Accountability

The Department of Health and Human Services (HHS) managed this contract. Oversight would focus on ensuring the delivery of testing services, adherence to public health guidelines, and proper utilization of funds.

Related Government Programs

Medical Laboratories
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Sole-source award limits price competition.
Significant contract value warrants close scrutiny.
Potential for scope creep or unfulfilled deliverables.
Reliance on a single entity for a critical public health service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $820.1 million to WALGREEN CO.. COVID-19 SELF-SWAB AND POINT-OF-CARE TESTING PUBLIC-PRIVATE PARTNERSHIP

Who is the contractor on this award?

The obligated recipient is WALGREEN CO..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $820.1 million.

What is the period of performance?

Start: 2020-04-05. End: 2021-09-30.

What was the rationale for awarding this contract as sole-source instead of competing it?

The sole-source award was likely driven by the urgent need to rapidly scale up COVID-19 testing capabilities during the early stages of the pandemic. A competitive procurement process could have introduced delays, hindering the immediate response required to address the public health crisis.

How did the public-private partnership model impact the cost-effectiveness of the testing program?

The public-private partnership allowed the government to leverage Walgreens' existing infrastructure and supply chains, potentially accelerating deployment. However, the lack of competition in a sole-source award raises questions about whether the government secured the most cost-effective solution compared to a fully competed contract.

What measures were in place to ensure the quality and accessibility of the testing services provided under this contract?

While specific quality assurance measures are not detailed, contracts of this nature typically require adherence to FDA guidelines, CLIA certifications for labs, and reporting of results to public health authorities. Accessibility would be monitored through the distribution network established by Walgreens.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Crescent Healthcare Inc (UEI: 079608595)

Address: 200 WILMOT RD, DEERFIELD, IL, 60015

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

Financial Breakdown

Contract Ceiling: $820,106,447

Exercised Options: $820,106,447

Current Obligation: $820,106,447

Actual Outlays: $820,106,447

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline