USAID's $28.6M Condom Contract with ALATECH Healthcare Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $28,595,559 ($28.6M)

Contractor: Alatech Healthcare, L.L.C.

Awarding Agency: Agency for International Development

Start Date: 2005-09-23

End Date: 2010-03-31

Contract Duration: 1,650 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRH/CSL - ALATECH (CONDOMS) NXT YR OPTION PART YR OP

Place of Performance

Location: DOTHAN, GENEVA County, ALABAMA, 36301

State: Alabama Government Spending

Plain-Language Summary

Agency for International Development obligated $28.6 million to ALATECH HEALTHCARE, L.L.C. for work described as: PRH/CSL - ALATECH (CONDOMS) NXT YR OPTION PART YR OP Key points: 1. The contract awarded to ALATECH HEALTHCARE, L.L.C. for condoms represents a significant expenditure. 2. Competition details are unclear, raising questions about price discovery and potential value. 3. The long duration and fixed-price nature could pose risks if market conditions change. 4. Manufacturing falls under 'All Other Miscellaneous Manufacturing,' a broad category.

Value Assessment

Rating: questionable

The contract's value of $28.6 million over its extended period needs further benchmarking against similar procurements for condoms and related health supplies. Without clear cost breakdowns or competitive bids, assessing the fairness of the pricing is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While listed as 'FULL AND OPEN COMPETITION,' the specifics of how this competition was conducted and how it influenced price discovery are not detailed. The long duration of the contract (2005-2010) may have limited the impact of ongoing market competition.

Taxpayer Impact: The substantial value of this contract means taxpayers are directly funding the procurement. Ensuring competitive pricing is crucial to maximize the value of these funds for public health initiatives.

Public Impact

Ensures supply of essential health products (condoms) for international aid programs. Potential for cost savings if competitive bidding was robust and effectively managed. Long-term contract may provide supply chain stability for critical items. Lack of transparency in competition could lead to suboptimal pricing for taxpayers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed competition justification
Long contract duration without clear performance reviews
Potential for price escalation over contract life

Positive Signals

Procurement of essential health commodity
Use of a definitive contract for a long-term need

Sector Analysis

This contract falls within the broader 'Miscellaneous Manufacturing' sector, specifically related to health products. Benchmarking spending in this niche requires comparison with other government procurements of similar medical supplies and personal protective equipment.

Small Business Impact

The data indicates the awardee is ALATECH HEALTHCARE, L.L.C. Further analysis is needed to determine if this entity qualifies as a small business and if small business participation was a consideration in the contract.

Oversight & Accountability

Oversight of this contract would involve monitoring ALATECH's performance, ensuring delivery of quality products, and verifying that the pricing remains fair throughout the contract's extended term. Agency for International Development's internal controls are key.

Related Government Programs

All Other Miscellaneous Manufacturing
Agency for International Development Contracting
Agency for International Development Programs

Risk Flags

Lack of detailed competition justification
Long contract duration without clear performance reviews
Potential for price escalation over contract life
Insufficient data to benchmark unit cost

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $28.6 million to ALATECH HEALTHCARE, L.L.C.. PRH/CSL - ALATECH (CONDOMS) NXT YR OPTION PART YR OP

Who is the contractor on this award?

The obligated recipient is ALATECH HEALTHCARE, L.L.C..

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2005-09-23. End: 2010-03-31.

What was the specific mechanism of the 'full and open competition' used for this contract, and what were the key bidding outcomes?

The provided data states 'FULL AND OPEN COMPETITION' but lacks specifics on the bidding process, number of bidders, or the evaluation criteria used. Understanding these details is crucial to assess if the competition effectively drove down prices and ensured the best value for the government. Without this, the claim of full and open competition's effectiveness remains unsubstantiated.

How does the unit cost of these condoms compare to market rates or similar government contracts awarded around the same period?

The provided data does not include unit cost information or allow for direct comparison with market rates or other government contracts. To assess value, a detailed analysis of the per-unit cost, factoring in quantity, specifications, and delivery terms, would be necessary. This comparison is essential to determine if the $28.6 million expenditure represents a fair price.

Given the contract's duration (2005-2010), what mechanisms were in place to ensure continued value and prevent price creep?

The long duration of the contract (over 4 years) necessitates robust mechanisms for ensuring continued value. This would typically include periodic price reviews, potential for contract renegotiation based on market shifts, and clear performance metrics. The absence of specific details on these mechanisms raises concerns about potential price creep and whether the government secured the best possible terms throughout the contract's life.

Industry Classification

NAICS: Manufacturing › Other Miscellaneous Manufacturing › All Other Miscellaneous Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M/OAA/GH-04-2808

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 595 E LAWRENCE-HARRIS HWY, SLOCOMB, AL, 36375

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $1,363,789,775

Exercised Options: $276,294,083

Current Obligation: $28,595,559

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline