Mar 24 2009
USAID -- which has distributed an estimated 10 billion U.S.-manufactured condoms worldwide -- is switching to less-expensive condoms made overseas, the Kansas City Star reports.
The decision is expected to result in the loss of 300 U.S.-based jobs. In addition, the switch to condoms made overseas "comes despite implied assurances over the years that the agency would continue to buy American whenever possible," the Star reports. "Of course we considered how many U.S. jobs would be affected by this move," an unnamed USAID official said, adding that the reasons for the change include lower costs and the fact that Congress dropped "buy American language" in a recent appropriations bill.
In addition, the USAID official said that the sole U.S. condom supplier, the Alabama-based company Alatech, previously had delivery issues. According to the Star, the government is close to accepting condoms from the South Korea-based Unidus and the China-based Qingdao Double Butterfly Group.
Alatech formally protested the USAID contract going to an overseas company, but the Government Accountability Office earlier this month rejected the complaint, saying that it does not have jurisdiction in the case. The government hired a Massachusetts-based company to act as a middleman in the matter, which protected the government from a bid protest because USAID was no longer the "prime contractor," according to the Star.
Alatech President Larry Povlacs said that he believes USAID deliberately acted to remove the company from the bidding process. However, USAID officials deny the claim, saying that the Massachusetts company was hired for other reasons. According to Povlacs, Alatech spent millions of dollars updating its manufacturing process and enhancing its ability to deliver under the contract -- actions based in part on "implied assurances from the agency that it would continue to seek American manufacturers," the Star reports. The company plans to appeal its case to federal officials and potentially file a lawsuit.
According to USAID officials, tests have shown that the Chinese-made condoms are equivalent to those made in the U.S. and elsewhere. However, some condom experts do not agree, according to the Star. Bill Howe, president of PolyTech Synergies who had consulted for Alatech, said that China is "learning" to produce better condoms but that some products are "notoriously suspect" (McGraw, Kansas City Star, 3/22).
 This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.
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