GAO: Agencies awarded $17.8B in COVID-19 contracts through mid-June

As of mid-June, federal agencies had awarded $17.8 billion in contracts for critical goods and services supporting responses to the COVID-19 pandemic, according to a U.S. Government Accountability Office report published on July 29.

Four agencies (the Departments of Health and Human Services, Homeland Security, Defense, and Veterans Affairs) accounted for 85% of the money awarded in contracts. About $5.1 billion (29%) of contract obligations were reported by agency contracting officers as going to small businesses. The authors of the report noted that, to promote small business participation in federal contracting, there is a government-wide goal to award about a quarter of contract obligations to small businesses.

About $11 billion (62%) was awarded in contracts for goods to treat coronavirus patients and protect health care workers. The top five product categories included about $3 billion for ventilators; $1.3 billion for N95 respirators; $1.2 billion for personal protective equipment like surgical gowns, coveralls, and gloves; and $737 million for drugs and biologicals, including COVID-19 treatments and reagents used for administering COVID-19 tests.

In addition to goods, agencies have awarded about $2.1 billion on contracts for advanced, basic, and commercial biomedical research and development for vaccination development, among other things. Agencies have also awarded about $513 million on contracts for financial management support services, which includes $500 million by the Small Business Administration for data analysis and loan recommendation services.

A majority of the government-wide contract obligations, about $11.7 billion, were associated with new contracts, compared with about $6.1 billion on preexisting contracts. While obligations for drugs and biologicals were primarily procured on preexisting contracts, the majority of the remaining obligations for the top five goods were on new contracts in response to the pandemic.

The agencies awarded about $9.4 billion in contracts (53%) without competition, often citing urgency as the reason. While almost two-thirds of government-wide contract obligations have involved contracts for goods, agencies competed these contracts less frequently. For example, about 91%, or about $5.5 billion in contract obligations for medical and surgical equipment, were identified as not competed. Overall, about 39% of obligations for goods were competed compared to about 61% of obligations for services.

"Awarding contracts under the unusual and compelling urgency exception to full and open competition can be necessary in certain circumstances, but our prior work has noted that promoting competition—even in a limited form—increases the potential for quality goods and services at a lower price in urgent

situations," the authors of the report wrote.

Obligations on new contracts were competed less frequently than obligations on preexisting contracts, with about 34% of obligations on newly awarded contracts competed, compared to about 72% of obligations on pre-existing contracts.

"Our prior work has noted that agencies can leverage contracts awarded in advance of a disaster to rapidly and cost-effectively mobilize resources, and that these contracts can help preclude the need to procure critical goods and services noncompetitively," the authors wrote.

Read more: https://www.gao.gov/products/GAO-20-632

Read the full report: https://www.gao.gov/assets/710/708455.pdf