A net total of $1.97 billion has been obligated to federal contractors in response to Covid-19 between February 4 and April 5. Over the course of March, daily transactions grew from one or two each day to well over a hundred.
Research and Development is the largest category of spending at nearly 42 percent, but represents less than three percent of contract transactions. Most transactions go to personal protective equipment (PPE), medical equipment and supplies, IT support and telework, and janitorial work.
One interesting acquisition was for N95 masks. The contract Request for Information went out February 26. The Request for Proposals went out on March 4 with a response date of March 18. The solicitation was seeking 500,000 masks, but the contract award and obligation on March 25 went for nearly $173 million, suggesting a much larger order of N95 masks.
In this emergency, it took HHS a month to compete the N95 mask contract. That’s moving pretty fast for a federal contract, especially considering there were 59 companies bidding on the contract! If Covid-19 were truly an emergency, and 59 companies were eager enough to submit bids, then why didn’t the HHS just split the $173 million into 59 equal parts and provide them contracts using the simplified commercial item approach? All companies could have been engaged much faster and more effectively. The government can then ramp up the suppliers performing the best.
By the way, 3M won that N95 mask contract, which is the second largest transaction for Covid-19 (federal non-defense). 3M has been wrestling with the administration, which wants to stop the company from exporting N95 masks to other countries including Canada.
Below is a video of Covid-19 federal non-defense contract obligations (blue bubbles) vs. Covid-19 cases (orange bars). It starts March 1, 2020 and runs through April 5.
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