What Are Taxpayers Spending for Those ‘Free’ Covid Tests? The Government Won’t Say.

Yves here. Let’s sputter about this free Covid test gimmick. Yes, some free tests are better than none. But 4 per household? When the 2 kits of I got recommended serial testing? Even for a single person, this hardly goes anywhere (unless you are a near hermit like yours truly, and people like me need testing less than everyone else). 28% of US households are solo resident, so the other 72% are getting a bad deal.

Put it another way: One of my mother’s former aides is still working here a bit to get the house sorted out. She and her partner also drive taxis (and wear N95s, refuse passengers who won’t wear masks, and keep the windows in front open. Her partner has had 20 people on both sides of his family die of Covid and she is a cancer survivor, so they aren’t feigning their vigilance). She looked hungrily at my 2 test kits. She and her partner are paying $40 for the same kit of two tests and going through them like candy. She had no idea you could get them free. Even so, 4 tests for the two of them will barely make a dent in their needs.

And that’s before you get to the issue raised below: the refusal to come clean about what the Feds paid for the tests. Gee, if the US had gotten them at a decent price, maybe we could be giving out 4 tests per household every month? Or is another objective not to compete too much with drugstores?

By Christine Spolar. Originally published at Kaiser Health News

The four free covid-19 rapid tests President Joe Biden promised in December for every American household have begun arriving in earnest in mailboxes and on doorsteps.

A surge of covid infections spurred wide demand for over-the-counter antigen tests during the holidays: Clinics were overwhelmed with people seeking tests and the few off-the-shelf brands were nearly impossible to find at pharmacies or even online via Amazon. Prices for some test kits cracked the hundred-dollar mark. And the government vowed that its purchase could provide the tests faster and cheaper so people, by simply swabbing at home, could quell the spread of covid.

The Defense Department organized the bidding and announced in mid-January, after a limited competitive process, that three companies were awarded contracts totaling nearly $2 billion for 380 million over-the-counter antigen tests, all to be delivered by March 14.

The much-touted purchase was the latest tranche in trillions of dollars in public spending in response to the pandemic. How much is the government paying for each test? And what were the terms of the agreements? The government won’t yet say, even though, by law, this information should be available.

The cost — and, more importantly, the rate per test — would help demonstrate who is getting the best deal for protection in these covid times: the consumer or the corporation.

The reluctance to share pricing details flies against basic notions of cost control and accountability — and that’s just quoting from a long-held position by the Justice Department. “The prices in government contracts should not be secret,” according to its website. “Government contracts are ‘public contracts,’ and the taxpayers have a right to know — with very few exceptions —what the government has agreed to buy and at what prices.”

Americans often pay far more than people in other developed countries for tests, drugs, and medical devices, and the pandemic has accentuated those differences. Governments abroad had been buying rapid tests in bulk for over a year, and many national health services distributed free or low-cost tests, for less than $1, to their residents. In the U.S., retailers, companies, schools, hospitals, and everyday shoppers were competing months later to buy swabs in hopes of returning to normalcy. The retail price climbed as high as $25 for a single test in some pharmacies; tales abounded of corporate and wealthy customers hoarding tests for work or holiday use.

U.S. contracts valued at $10,000 or more are required to be routinely posted to sam.gov or the Federal Procurement Data System, known as fpds.gov. But none of the three new rapid-test contracts — awarded to iHealth Labs of California, Roche Diagnostics Corp. of Indiana, and Abbott Rapid Dx North America of Florida — could be found in the online databases.

“We don’t know why that data isn’t showing up in the FPDS database, as it should be visible and searchable. Army Contracting Command is looking into the issue and working to remedy it as quickly as possible,” spokesperson Jessica R. Maxwell said in an email in January. This month, she declined to provide more information about the contracts and referred all questions about the pricing to the Department of Health and Human Services.

Only vague information is available in DOD press releases, dated Jan. 13 and Jan. 14, that note the overall awards in the fixed-price contracts: iHealth Labs for $1.275 billion, Roche Diagnostics for $340 million, and Abbott Rapid Dx North America for $306 million. There were no specifics regarding contract standards or terms of completion — including how many test kits would be provided by each company.

Without knowing the price or how many tests each company agreed to supply, it is impossible to determine whether the U.S. government overpaid or to calculate if more tests could have been provided faster. As variants of the deadly virus continue to emerge, it is unclear if the government will re-up these contracts and under what terms.

To put forth a bid to fill an “urgent” national need, companies had to provide answersto the Defense Department by Dec. 24 about their capacity to scale up manufacturing to produce 500,000 or more tests a week in three months. Among the questions: Had a company already been granted “emergency use authorization” for the test kits, and did a company have “fully manufactured unallocated stock on hand to ship within two weeks of a contract award?”

Based on responses from about 60 companies, the Defense Department said it sent “requests for proposals” directly to the manufacturers. Twenty companies bid. Defense would not release the names of interested companies.

Emails to the three chosen companies to query the terms of the contracts went unanswered by iHealth and Abbott. Roche spokesperson Michelle A. Johnson responded in an email that she was “unable to provide that information to you. We do not share customer contract information.” The customers — listed as the Defense Department and the Army command — did not provide answers about the contract terms.

The Army’s Contracting Command, based in Alabama, initially could not be reached to answer questions. An email address on the command’s website for media bounced back as out-of-date. Six phone numbers listed on the command’s website for public information were unmanned in late January. At the command’s protocol office, the person who answered a phone in late January referred all queries to the Aberdeen Proving Ground offices in Maryland.

“Unfortunately, there is an issue with voicemail,” said Ralph Williams, a representative of the protocol office. “Voicemail is down. I mean, voicemail has been down for months.”

Asked about the bounced email traffic, Williams said he was surprised the address — acc.pao@us.army.mil — was listed on the ACC website. “I’m not sure when that email was last used,” he said. “The army stopped using the email address about eight years ago.”

Williams provided a direct phone number for Aberdeen and apologized for the confusion. “People should have their phone forwarded,” he said. “But I can only do what I can do.”

Joyce Cobb, an Army Contracting Command-Aberdeen Proving Ground spokesperson, reached via phone and email, referred all questions to Defense personnel. Maxwell referred more detailed questions about the contracts to HHS, and emails to HHS went unanswered.

Both the Defense and Army spokespeople, after several emails, said the contracts would have to be reviewed, citing the Freedom of Information Act that protects privacy, before release. Neither explained how knowing the price per test could be a privacy or proprietary concern.

A Defense spokesperson added that the contracts had been fast-tracked “due to the urgent and compelling need” for antigen tests. Defense obtained “approval from the Assistant Secretary of the Army for Acquisition, Logistics, & Technology to contract without providing for full and open competition.”

KHN separately searched for the contracts on the sam.gov website during a phone call with a government representative who assisted with the search. During an extended phone session, the representative called in a supervisor. Neither could locate the contracts, which are updated twice a week. The representative wondered whether the numbers listed in the Defense press release were wrong and offered: “You might want to double-check that.”

On Jan. 25, Defense spokesperson Maxwell, in an email, said that the Army Contracting Command “is working to prepare these contracts for public release and part of that includes proactively readying the contracts for the FOIA redaction.” Three days later, she sent an email stating that “under the limited competition authority … DOD was not required to make the Request for Proposal (RFP) available to the public.”

Maxwell did not respond when KHN pointed out that the contracting provision she cited does not prohibit the release of such information. In a Feb. 2 email, Maxwell said “we have nothing further to provide at this time.”

On sam.gov, the covid spreadsheets include a disclaimer that “due to the tempo of operations” in the pandemic response, the database shows only “a portion of the work that has been awarded to date.”

In other words, it could not vouch for the timeliness or accuracy of its own database.

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  1. Randall Flagg

    The Department of Defense is involved? A crackerjack organization if there ever was when it comes to efficiently procuring, spending and tracking the taxpayer dollar in a transparent manner! ( sarcasm off). That the DoD is involved is all I need to know about how this all goes…

    1. anon y'mouse

      perhaps that’s why we had to sign up, instead of simply mailing some to every residential address the U.S. postal service delivers to.

      they wanted us to fill out forms for some darn reason, and it wasn’t to inform them of how many people need them, which they apparently didn’t care about at all. and it also wasn’t just for showing up Psaki publicly.

  2. ambrit

    Perhaps a look at the “money” behind these companies would be of help. Who is ultimately getting the funds? Then track who in the Government is “friendly” with the private corporation “money” people.
    The “scandal” about procurement for the American Pacific Fleet of recent vintage is a useful primer on just how corrupt this process can get.
    See: https://en.wikipedia.org/wiki/Fat_Leonard_scandal
    The basic takeaway from the DoD’s stonewalling about the contract details is that either they are incompetent, and do not have the details themselves, or are corrupt and are “in on the deal.” My money is on a mix of both. Some crooks lurking in the background with some “useful idiots” acting as fronts.
    If the DoD is this ‘bad’ about a ‘non-kinetic’ domestic problem, inagine how badly they will fail when a real shooting war against a peer group happens.

    1. Michael Ismoe

      How much is secondary to “who’s getting the money.”

      Half the Trump Administration took second jobs as “ventilator suppliers” when they passed the $5 trillion giveaway. I wonder what happened to all those ventilators anyway?

  3. Arizona Slim

    [Slim raises hand, tentatively.]

    Ummm, I have a question: Why is there no over-the-counter equivalent of the pregnancy test? I keep reading about all of these municipal sewer systems that are testing for the presence of a certain virus, so it’s not like people aren’t excreting it.

    Methinks that this same principal could be extended to home tests.

    1. megrim

      Pregnancy tests use urine, but covid tests would need to be the Chinese-style anal swab. Not sure how well that would go down over here.

      1. Jack Parsons

        It takes me years to get around to doing my S̷̷̷H̷̷̷ FIT test for colon cancer that Kaiser keeps sending me. The idea of doing this every day and sending it in the mail makes me fear for the sanitation of the USPS.

        1. anon y'mouse

          yes, wasn’t it just a few years ago that an entire hospital’s pneumatic tubes needed sanitizing from the ebola outbreak and sending samples through it?

          i mean, the USPS is not pneumatic but that matters little.

          this reminds me of that old yarn about how much physical currency is contaminated with cocaine. perhaps we should perform the same testing on common mail for feces.

  4. Rod

    I also wonder what the deal with the USPS might be–maybe DeJoy said they’d deliver for free as a public service.
    Or maybe a little catch-up on getting those pensions pre-paid up–y-know, like the private sector has. ; /
    I’m still waiting for those tests ordered on Day 1 to hit my mailbox.

      1. Arizona Slim

        I got mine too. No need to use them right now, so I’m putting them in storage.

        Oh, BTW, they’re made in China.


  5. Rodger Mitchell

    State and local government spending are funded by state and local taxes, but federal spending is not funded by federal taxes.

    It’s important to understand the differences between federal financing vs. all other financing. The federal government uniquely being Monetarily Sovereign, never can run short of its own sovereign currency, the U.S. dollar. It creates new dollars ad hoc, every time it pays a bill.

    Even if all federal tax collections were $0, the federal government could continue spending forever. Those test kits cost you, the taxpayer, nothing.

    It is sad to read articles equating personal finances with federal finances. Unlike us, the federal government never borrows its own currency. “Wasted” spending costs you nothing.

    The entire article is flawed because it implies that federal dollars are scarce and must be conserved, when in fact, federal dollars are infinite, and the more that are spent, the healthier is the economy.

    At long last, readers should be given that information: The federal government is different.

    The primary purpose of federal taxes is to control the economy. The government taxes what it wishes to stamp down and gives tax breaks to what it wishes to reward. Aside from that, there is no reason for the federal government to collect dollars, either by taxing or borrowing.

    1. Societal Illusions

      I read it differently, in that the information regarding who was awarded the contracts and the contract terms, including total cost thus price per test, as public information, is being denied to the public. How is graft monitored except by a diligent public, as we seeming can no longer rely on the usual journalists to inform?

    2. T_Reg

      “the more that are spent, the healthier is the economy.”? No matter who it goes to? I beg to differ. But if that were so, I think largesse should be showered on actual persons, instead of billions going to corporations.

    3. Jack Parsons

      Gosh, thanks, we never hear about MMT here in this far-off out-of-the-way podunk blog :)

      As to corruption, compare these test kits to road-building: the ROI of building a road is so high and long-lasting that it is ok for the process to be mildly corrupt.

    4. Grayce

      Are you implying, then, that cybercurrency is also unlimited “at the source”? If so, does it mean the one who invents a new currency and issues it therefore has unlimited spending? MMT has a few gaping holes that takes space to explain. Remember, nothing comes from nothing. Even when a buyer pays too much, the exchange is “fair” if agreed by both parties. But, if a government pays a bill with more than zero units, the units must be accounted for unless the receiver nulls to zero or burns the cash. What faith you place in MMT principles without blinking! When the receiver “spends” the units, faith in the legal tendering goes up, but the health of the economy does not.
      You mention inflation as if it is a mystery, or something like the weather, inevitable or unpredictable. Not so. The difference is found by studying absolute capitalism versus debt-based capitalism. In absolute capitalism, the investor actually has value units and backs something that he/she believes will create something new with value added. In debt-based capitalism, the would-be investor does not have the value units to begin with and has a chasm of debt to recover from the investment. The one who borrows with one value unit, in order to invest in something, has to pay back with an inflated value unit, or the whole debt-based profit scheme falls apart. Inflation is no more than society’s payback on unbacked investment. Sovereign dollars that are printed without backing (taxes or Ft. Knox) insert inflated value units into the economy, like non-nutritional food to the body.

  6. Advait

    I’ll offer my usual reminder that, on the national level, taxes do not fund spending. The taxpayer is not paying for anything. Taxpayers pay federal taxes, and their tax payments are destroyed aka zero’d out in an accounting sense. Tax payments, in no way, shape or form, get transferred to some spending account. It is a totally false myth that federal taxes fund federal spending. All federal spending is the creation of new dollars. The fed govt can effortlessly create all the dollars it wants. Only limitations are inflation and limited resources (materials and labor). All federal spending is created by acts of congress and then federal employees typing numbers into spreadsheets. Federal “budgetary” constraints are false and useless self imposed constraints. It’s like deliberately smashing your wrists before a boxing match.

    A balanced fed budget is meaningless and harmful. A balanced green economy (full employment with a federally funded job guarantee) is great for all.

    Remember, in America there is no shortage of socially beneficial jobs and no shortage of money to fully fund those jobs (with full benefits).

    So please remember: “On the federal level, taxes do not fund federal spending. All federal spending is the creation of new dollars.”

    Also remember that how America paid for WW2 is an absolute perfect example of MMT in action.

    1. Randall Flagg

      So even if you and Mr. Mitchell are correct, is the Federal Government than excused from having to account where and how those dollars are spent?
      Well if the answer is yes, how do I get my place at that pig trough? Or what am I missing here?

      1. Jason Boxman

        Resource allocation matters. The unit of account, dollars, is unlimited. How we use them is not. But the debate must be about how we allocate scare resources for the greater social benefit, not whether or not we have enough keystrokes at the Federal Reserve to create the unit of account.

        The whole thing is an intentional smoke screen; and it is believable because neither you nor I can spend dollars we don’t have, so it seems logical it would be true for all entities. Not so for the currency issuer.

      2. Advait

        ” is the Federal Government than excused from having to account where and how those dollars are spent?”

        Not in my book. If I was in charge I would hire lots of good auditors throughout the govt to make sure those newly created dollars are spent wisely as intended. And I would make the books all transparent and open to public inspection.

    2. Anthony G Stegman

      You are missing the inflation component of MMT. The United States does not have an unlimited capacity to create money out of thin air. Doing so seriously threatens the US dollar’s status as a reserve currency. You really don’t want to imagine what will happen if that status is no more.

      1. anon y'mouse

        Of course not. It’s such a bad idea that it’s bound to happen.

        fewer wars, and fewer crap goods circulating all over the world wasting vital resources?

        i say “bring it on” even if it causes us pain.

    3. Brooklin Bridge

      There are other reasons than tax or MMT to request this informtion. One idea is to find out how much the government pays (regardless of where it gets/materializes it) vs. how much we pay if we want to buy COVID tests at retail prices (and then, heaven help us, go through our insuance company to get reimbursed laughed at. I strongly suspect (at about 200 or 300 percent) that the government pays less than we do and it begs the question as to why we don;t buy them directly from the government once we have used up our allotted haha number. The answer, of course, is profit. Why on earth would a company want to sell only to the government at rock bottom prices when for a few quarters it can dazzle a congress critter and his Royal “where am I” Highness to make sure the public pays retail through the nose (I strongly suspect many people won’t have the stomach to go through their insurance each and every time they want a test or if they do, they will loose patience soon and go retail if they can afford it – yet another barrier to the poor).

      Well, that would be one reason, anyway. The difficulty in getting this information is just one more boulder of proof, as if we needed it, that our government is collapsing from the weight of corruption.

  7. Susan the other

    Of course there’s always the possibility that the test kits are just more garbage. That they are, in fact, not accurate. And we consumers have no way of testing the test kits. We won’t know even after they are distributed and used. Covid has made one thing too obvious: we have no effective government; we only have spit balls. We should start considering ‘Effective Government’ as another resource. Like labor or natural resources or “social capital” aka “trust”. All we have is incompetent, ineffective government – which is really no government at all. A captured economy and a corrupt and conflicted political class is all we have. And an antiquated constitution that offers no cure.

    1. Brooklin Bridge

      I think the tests are quite worth while, especially if you see others frequently in situations where the potential for contagion is high or high risk. Even if they fail once in a while, you are still protecting others far more times than you are exposing them to harm. Obviously price and other factors enter in. That said, they are still a nuisance (unless they’ve gotten easier recently). I don’t like swabbing the back of my throat, at all. I certainly wouldn’t take the test just to go to the supermarket where I’m very well masked up with excellent n95s that I finally got to consistently not fog glasses and to give that reassuring light tug when you breath in. Also, where I don’t talk to anyone other than a thank you to the cashier or a rare request to someone for help. Hate to have to shave every time, but oh well.

      Also, if we find out “they do nothing” (famous line in the Simpsons by cartoon rendition of Arnold Schwarzenegger), which I doubt, it won’t be for lack of careing – rather the misplaced assumption that even our hopeless twisted government and it’s ever more slimy spawn, such as the CDC, wouldn’t, couldn’t, possibly, stoop, THAT, low.

  8. Rume

    In our family’s experience the tests work. They become positive once you have symptoms, mostly a runny nose. They do work exactly like a pregnancy test. How the swab is taken seems to affect sensitivity. We were visiting family in Switzerland at the beginning of the year. They had tests available in all the pharmacies for about $5 each. Not free but reasonable and available.

  9. truly

    An organization that cant keep their phonemail working, cant keep their websites up to date with useable email addresses, and cant reliably provide simple information about procurement costs is considering starting a war with Russia?
    Yowsers. Are there betting sites for this kind of thing?
    I think I might need to watch “Idiocracy” again.

    1. Objective Ace

      There’s a difference between cant and wont. While either is obviously an issue — they arent necessarily the same issue

    2. megrim

      It’s mildly concerning just because the military is just about the only govt institution that isn’t underfunded. And they can’t even bother to fix the procurement dept’s voicemail? Sad.

  10. Kelly in Texas

    I have the two promised boxes of tests (two tests per box). I noticed that they are made in China. So I guess the USG has to get hundreds of millions of them shipped all the way here, like everything else I guess. From a company out of Calif. called iHealth.
    It says on the box, if you have COVID symptoms you should use two tests. So if you have symptoms you really only got two testings.
    It also says on the box they are not FDA “cleared or approved” but authorized under an FDA emergency use authorization.

    1. Mikel

      “I noticed that they are made in China…”

      And with all that saber rattling regarding China.

      The establishment is full of clowns…and more and more like the Pennywise/John Wayne Gacy version of clown….

    2. Anthony G Stegman

      Don’t be surprised if these iHealth tests don’t work. The company (based in Sunnyvale, CA) has awful online reviews regarding its products.

  11. Jason Boxman

    The whole thing is a disaster. From an employee at one company I know of:

    I will also note there is only one receipt field per form. When I pointed out how this is problematic to the [insurer] rep, she told me to file a separate form per receipt per person. I tend to buy them in 5 2-pk boxes at a time (5 boxes is the per customer limit for the place I order them from, when they are in stock.) Because only 4 2-pk boxes can be claimed on the form per person, it basically requires 2 forms per person – only one covered plan member can be on one form – and I have to have the same receipt on multiple forms ([insurer] rep assured me they read the forms carefully and won’t get confused and mess this up and deny the claim because I’m “double-counting” the same receipt, but I’ve got a feeling….)

    (bold mine)

    Only liberal Democrats would think such a system is a good idea. I guess this is what they teach at those Ivy league schools?

    1. anon y'mouse

      sounds like another form of Means Testing.

      even if you can bother with all of that rigmarole, who is going to? and if you can, are you of the economic class that actually needs to?

      Means testing: making sure the poor and disenfranchised, the overworked, the underpaid, the elderly and the disabled are automatically opting out of the benefits because the hoop-jumping is just too insane.

  12. shinola

    From the article: “…three companies were awarded contracts totaling nearly $2 billion for 380 million over-the-counter antigen tests, all to be delivered by March 14.”

    Doesn’t that imply that the DoD is paying an average of about $5.26 per test? Did I miss, misunderstand or miscalculate something?

    1. T_Reg

      Makes sense to me. I used the same arithmetic to come up with the $2,500 cost for Regeneron’s monoclonal antibodies (based on a memo at Regeneron’s web site with contract details), and $709 per course for Molnupiravir.

  13. Nowhuffo

    People in Fairfield county OH have been able to pick up free tests from the library since before Thanksgiving of last year. Staff said it was paid for by the state. Don’t know the current status but seemed like a good idea at the time.

  14. Anthony G Stegman

    Today I happened to be at a local drugstore (CVS) and noticed signs on the doors and at various locations indoors stating that “free” N95 masks were out of stock. Another phony government program designed to fail from the start.

  15. sharron

    Your mothers’ caregiver should check into the tests offered on the COSTCO.com site. They are a bundle of 25 tests for 199.00. It’s about 8.00 per test.

  16. VietnamVet

    The antigen COVID tests are a great example of the degree of separation between reality and the western ruling cult’s hallucination that only money has value. Neoliberal government has no purpose except to dispense money to favored corporations. CEOs are no longer are jailed for their crimes. All responsibility is left to individuals. If one has money, one can to do something about it like calling a Concierge doctor and getting treated with antibodies and anti-virals if the test is positive. If infected, there is no mention of staying home to stop transmission of the virus. Providing sick leave for the ill, or instituting healthcare for all is ignored. Protecting others is an individual choice. There is absolutely no thought of the consequences. Tests are being left in mailboxes in the middle of winter. Energy, humans and resources are being used as if they are infinite. Western rulers have no concept of limitations. There is no planning for the future. Too many truckers dead, sick, staying home caring for others, or protesting to deliver goods causes shortages and inflation.

    Nothing is more horrific than the inciting a European War between nuclear powers to make a profit.

  17. Bill Carson

    My mother sent me a bizarre text tonight—

    “So did USA just buy billions of COVID tests from China, who created the virus? How twisted is that!!”

    It’s not like her to text right wing political stuff, so I can only conclude that my stepfather has had the TV on one of the right wing news channels and it’s managed to upset them both. Sigh.

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