Sonoma County’s Labcon lands $59M federal contract for test supplies as pandemic depletes supply

Responding to a short supply of critical medical testing equipment in a prolonged battle with COVID-19, a Petaluma company that specializes in laboratory materials announced Thursday it received a $59.3 million contract with the federal government to make disposable test tubes and tips called “pipettes.”

Over the next six to 10 years, Labcon plans to ramp up production on test tubes and pipette tips that are used as covers on devices that draw liquid in a lab setting. Production of the tips will expand from 100 million to 236 million tips per month. For test tubes, the capacity will more than double to 58 million units by October 2025, the company reported.

All in all, the product lines are expected to double their 6 million units a day for the contract with the U.S. Department of Defense over three phases, President Jim Happ told the Business Journal.

The DOD is working in coordination with the U.S. Department of Health and Human Services to combat the pandemic under the auspices of the 1950 Defense Production Act U.S. President Joe Biden implemented in February. The federal law is used as a civil defense and war mobilization measure that calls on manufacturers to mass-produce critical tools used in the fight.

“No one can make enough of them,” Happ said, adding that 15 U.S. companies and about 40 around the globe currently design and manufacture the items. His company, Labcon — which stands for “laboratory convenience” — is one of them.

The Lakeville Highway company formed in 1959 will dedicate a majority of its operation to the effort in two existing production facilities and an upcoming structure to be built on an adjacent lot.

The tips measuring one-quarter inch to 5 inches in size and are used as a plunger onto devices are in short supply. The test tubes start at one-half inch in size. Scientists in labs conducting tests use the pipette tips to examine how the vaccine reacts under different chemist-related scenarios without the threat of contamination.

While small, the medical testing devices are crucial to the vaccine effort. Many were coming from China, but the global supply chain crisis with ships left waiting off from ports couldn’t meet the demand, Happ explained. So the feds called on domestic producers to meet the capacity of today’s demands.

“We try to make it convenient for scientists to do their work,” Happ, 68, said in summary of the company’s mission.

The business operations executive added his firm is growing substantially (by 50% since the pandemic emerged) but declined to provide financials on the privately held company, which employs 300 people. It will add another 100 staffers to get its 1,000 products designed and out the door.

Labcon works with 20 distributors supplying 800 clients dotted across the planet in 57 countries. Among them is Pfizer, one of three vaccine providers.

The test tube shortage spans the globe, with the BBC reporting last month that England pledged to ramp up production by 20%.

The U.S. shortage prompted the College of American Pathologists to publish recommendations in June for medical professionals to work around the problem until supplies resume to normal.

The U.S. Department of Health failed to respond to inquiries by the Business Journal as of press time.

Susan Wood covers law, cannabis, production, biotech, energy, transportation, agriculture as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times, now a part of the Union Tribune in San Diego County, along with the Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com