Analysis of HHS COVID-19 Contract Spending to Date

Key Takeaways:

• To date, HHS has spent $6.6B on contracts related to COVID-19 response.
• Most of the HHS contract spending to date has stemmed from the Office of Acquisition Management and Policy ($4.5B).
• $5B of HHS’ COVID-19 contract spending has been for medical and scientific equipment, specifically for medical and surgical equipment and supplies ($3B).

It’s been six weeks since I looked at HHS COVID-19 spending and in that time period spending has climbed from $1.2B to $6.6B. Federal COVID-19 stimulus funding from four different bills, provides HHS with nearly $250B to respond to the pandemic. The Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (CARES Act) alone allocates $150B in resources to HHS. According to Federal Procurement Data System (FPDS) contract spending data, HHS shows $20.3B in total contract spending to date for FY 2020.  Of that, $6.6B or 32%, is related to contract spending for the COVID-19 pandemic.

Federal contracting personnel have the ability to code contract spending as a specific national interest action which in this case includes COVID-19. Due to data entry and data coding limitations, it is likely that even more HHS contract spending may be related to COVID-19 response efforts.

The charts and data below include contract spending and actions that are specifically coded as a national interest action for COVID-19 for HHS:

The HHS Office of Acquisition Management and Policy shows the highest contract spending on COVID-19 goods and services at nearly $4.5B for FY 2020 to date.

Most of the contract spending to date would fall into the category of medical and scientific equipment, at $5B for the fiscal year.

To break HHS spending down a little deeper, top spending has been for product service codes for medical and surgical equipment and supplies; hospital and surgical clothing; and drugs and biologicals. 

Top contractors for HHS COVID-19 spending include Philips Electronics, Janssen Pharmaceuticals, and Hamilton Medical. Philip’s contract actions are for supplying ventilators. Janssen’s contract actions show requirements for vaccine, antiviral and therapeutic assets for COVID-19. Contract requirements with Hamilton Medical are also for ventilators.

For the most part, contract vehicles for HHS COVID-19 purchases are not specified in the contract data.  Over $6.3B in spending does not fall under a GWAC or named contract vehicle. However, for the spending that does specify a contract vehicle, GSA schedules for transportation, delivery and relocation show the most spending.  In fact, all four contract actions under this schedule are directed to UPS, ABF Freight and FedEx for transportation-related services in response to the COVID-19 pandemic. The majority of the spending on GSA’s professional services schedule group is obligated to the Boston Consulting Group for consulting services to assist HHS in accelerating and scaling a cross-agency and cross-government response to the COVID-19 crisis.

HHS will continue to need contractor support to respond to the COVID-19 pandemic.  Agency needs run the gamut, and include PPE, medical supplies and equipment, pharmaceuticals, health care staffing, information technology, medical surveillance, biomedical research, and cleaning services.