DoD contract awards $84M to United Safety Technology for glove production capacity, aiming for 216M gloves/month

Contract Overview

Contract Amount: $84,027,406 ($84.0M)

Contractor: United Safety Technology Inc

Awarding Agency: Department of Defense

Start Date: 2021-06-21

End Date: 2023-12-26

Contract Duration: 918 days

Daily Burn Rate: $91.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COVID-19 DHHS CAPACITY EXPANSION TO INCREASE CONUS PRODUCTION OF GLOVES - ACTION AWARDED UNDER CSO FA8119-21-S-C001. CONTRACT WILL RESULT IN CAPACITY TO PRODUCE 216 MILLION GLOVES PER MONTH.

Place of Performance

Location: LA VERNE, LOS ANGELES County, CALIFORNIA, 91750

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $84.0 million to UNITED SAFETY TECHNOLOGY INC for work described as: COVID-19 DHHS CAPACITY EXPANSION TO INCREASE CONUS PRODUCTION OF GLOVES - ACTION AWARDED UNDER CSO FA8119-21-S-C001. CONTRACT WILL RESULT IN CAPACITY TO PRODUCE 216 MILLION GLOVES PER MONTH. Key points: 1. Contract aims to bolster domestic production of essential medical supplies. 2. Significant investment in manufacturing capacity suggests a strategic focus on supply chain resilience. 3. The fixed-price contract structure provides cost certainty for the government. 4. Awarded under a specific CSO (FA8119-21-S-C001), indicating a targeted procurement approach. 5. The duration of the contract suggests a long-term commitment to sustained production. 6. Focus on CONUS production highlights a trend towards onshoring critical manufacturing.

Value Assessment

Rating: good

The contract value of $84 million for establishing a capacity to produce 216 million gloves per month appears reasonable, considering the significant upfront investment required for manufacturing infrastructure and technology. Benchmarking against similar capacity expansion contracts in the medical supply sector would provide a more precise value-for-money assessment. However, the fixed-price nature of the award offers predictability in government expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This competitive process is expected to drive favorable pricing and innovation. The specific number of bidders is not provided, but the open competition is a positive indicator for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality goods and services.

Public Impact

The primary beneficiaries are the Department of Defense and potentially other federal agencies requiring medical gloves, ensuring a more stable domestic supply. The contract will result in the establishment of manufacturing capacity for 216 million gloves per month. The geographic impact is primarily within CONUS (Continental United States), supporting domestic manufacturing and job creation. Workforce implications include potential job growth in manufacturing, engineering, and quality control within the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single contractor for critical supply chain needs if United Safety Technology becomes the sole major domestic producer.
Risk of production delays or quality control issues impacting the timely availability of gloves.
The long-term sustainability of the expanded capacity beyond the contract period needs consideration.

Positive Signals

Addresses a critical need for domestic production of medical supplies, enhancing national security and supply chain resilience.
The investment in manufacturing capacity can stimulate economic activity and create jobs within the US.
The fixed-price contract provides cost certainty for the government, mitigating budget overruns.

Sector Analysis

This contract falls within the broader medical device and supplies manufacturing sector, specifically focusing on surgical gloves. The market for personal protective equipment (PPE) saw significant fluctuations and increased demand during and after the COVID-19 pandemic. Establishing domestic capacity is a strategic move to reduce reliance on foreign supply chains, a trend observed across various critical industries. Comparable spending benchmarks would involve analyzing investments in other domestic manufacturing capacity expansions for essential goods.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. However, the prime contractor, United Safety Technology Inc., may engage small businesses as subcontractors for materials, logistics, or other support services as part of their operational needs, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Air Force. Accountability measures are embedded in the contract terms, including performance requirements and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

COVID-19 Relief Funding
Medical Supply Chain Resilience Initiatives
Domestic Manufacturing Expansion Programs
Department of Health and Human Services (DHHS) Capacity Expansion

Risk Flags

Supply Chain Dependency
Manufacturing Capacity Risk
Long-term Demand Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $84.0 million to UNITED SAFETY TECHNOLOGY INC. COVID-19 DHHS CAPACITY EXPANSION TO INCREASE CONUS PRODUCTION OF GLOVES - ACTION AWARDED UNDER CSO FA8119-21-S-C001. CONTRACT WILL RESULT IN CAPACITY TO PRODUCE 216 MILLION GLOVES PER MONTH.

Who is the contractor on this award?

The obligated recipient is UNITED SAFETY TECHNOLOGY INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $84.0 million.

What is the period of performance?

Start: 2021-06-21. End: 2023-12-26.

What is the track record of United Safety Technology Inc. in fulfilling large-scale manufacturing contracts, particularly for medical supplies?

Information regarding United Safety Technology Inc.'s specific track record in fulfilling large-scale manufacturing contracts, especially for medical supplies, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance on similar government or commercial contracts, including on-time delivery, quality adherence, and overall client satisfaction. Analyzing their financial stability and manufacturing capabilities would also be crucial to gauge their ability to meet the demands of this significant capacity expansion project. Without this historical performance data, it is difficult to definitively assess their reliability for this specific contract.

How does the per-unit cost of gloves produced under this contract compare to market rates or other government procurements?

The provided data does not include the per-unit cost of gloves. The contract value of $84 million is for establishing production capacity, not for the direct purchase of a specific quantity of gloves at a set per-unit price. To assess the per-unit cost, one would need to know the projected output over the contract's life and divide the total cost by the number of gloves produced. Benchmarking this against other government contracts for gloves or prevailing market rates would be necessary for a value-for-money analysis. The current data focuses on capacity building rather than unit economics.

What are the primary risks associated with establishing new manufacturing capacity for medical gloves, and how are they mitigated?

Key risks in establishing new manufacturing capacity include potential construction delays, equipment procurement issues, supply chain disruptions for raw materials, and challenges in achieving desired production quality and volume. For this contract, the Department of Defense likely mitigated these risks through thorough planning, selecting a reputable contractor, and potentially including performance milestones and penalties in the contract. The fixed-price nature of the award shifts some financial risk to the contractor. Furthermore, the focus on CONUS production may reduce risks associated with international shipping and geopolitical instability.

What is the projected impact of this contract on the overall domestic supply of medical gloves?

This contract is projected to significantly impact the domestic supply of medical gloves by establishing a new capacity to produce 216 million gloves per month. This substantial increase in domestic production aims to reduce reliance on foreign sources, thereby enhancing the resilience of the U.S. medical supply chain. The added capacity could stabilize prices, ensure availability during surges in demand (like pandemics), and provide a strategic buffer against global supply chain disruptions. The long-term effect will depend on the sustained operation of this capacity beyond the initial contract period.

How does this contract align with broader federal strategies for strengthening domestic manufacturing and supply chains?

This contract directly aligns with broader federal strategies aimed at strengthening domestic manufacturing and bolstering critical supply chains, particularly in the healthcare sector. Initiatives like the CHIPS and Science Act and various executive orders emphasize the importance of onshoring production for essential goods and reducing dependence on foreign adversaries. By investing in the capacity to produce millions of gloves domestically, this contract supports national security objectives, promotes economic growth through job creation, and ensures greater self-sufficiency in times of crisis. It represents a tangible step towards de-risking the supply chain for vital medical equipment.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA853321R0008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2053 PUDDINGSTONE DR, LA VERNE, CA, 91750

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $84,027,406

Exercised Options: $84,027,406

Current Obligation: $84,027,406

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline