NIH's $28.9M contract with St. Jude Children's Research Hospital for research services spans over a decade

Contract Overview

Contract Amount: $28,916,915 ($28.9M)

Contractor: ST Jude Children's Research Hospital Inc

Awarding Agency: Department of Health and Human Services

Start Date: 1999-01-15

End Date: 2010-04-30

Contract Duration: 4,123 days

Daily Burn Rate: $7.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Healthcare

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38105

State: Tennessee Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $28.9 million to ST JUDE CHILDREN'S RESEARCH HOSPITAL INC for work described as: Key points: 1. Contract awarded for research services, indicating a long-term commitment to a specific area of study. 2. The 'Cost No Fee' contract type suggests the government is reimbursing the contractor for allowable costs without an additional profit margin. 3. A duration of over 4000 days points to a significant, ongoing research project. 4. The contract's extensive timeline may indicate a need for sustained effort in a complex research area. 5. Sole-source award suggests a unique capability or relationship with the contractor, warranting scrutiny of the procurement process. 6. The absence of a specific Product or Service Code (PSC) might indicate a highly specialized or unique research requirement.

Value Assessment

Rating: questionable

The 'Cost No Fee' contract structure is unusual and typically reserved for specific circumstances, often involving non-profit research institutions where profit is not the primary driver. Without knowing the specific research objectives and the unique capabilities of St. Jude Children's Research Hospital, it's difficult to benchmark the value. However, the lack of a fee or profit margin could indicate a favorable arrangement for the government if the costs are well-managed and the research outcomes are valuable. The extended duration and significant total obligation warrant a closer look at the cost efficiency over the life of the contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when a single source is uniquely qualified to perform the work, often due to specialized expertise, proprietary technology, or an existing relationship. The lack of competition means there was no opportunity for other potential contractors to bid, which can sometimes lead to higher prices or less innovative solutions. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate and in the government's best interest.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down costs and ensure the best value for taxpayers. It is crucial that the justification for not competing this contract is robust to ensure public funds are used efficiently.

Public Impact

Beneficiaries include patients and families affected by the diseases being researched at St. Jude Children's Research Hospital. The services delivered are critical research activities aimed at understanding and treating complex medical conditions. The geographic impact is primarily centered around St. Jude Children's Research Hospital's facilities in Memphis, Tennessee, but the research findings have global implications. The contract supports a highly specialized scientific workforce, including researchers, clinicians, and support staff at the institution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings through competition.
The 'Cost No Fee' structure, while potentially beneficial, requires rigorous oversight to ensure cost control and prevent inefficiencies.
The extended duration of the contract (over 11 years) necessitates continuous monitoring to ensure the research remains aligned with evolving scientific priorities and government objectives.
Lack of detailed information on the specific research outcomes makes it challenging to assess the return on investment.
The absence of a specific Product or Service Code (PSC) could indicate a lack of standardization or a highly niche service, making comparisons difficult.

Positive Signals

Award to a renowned research institution like St. Jude Children's Research Hospital suggests a focus on high-impact, critical research.
The 'Cost No Fee' arrangement, if managed effectively, can ensure that funds are directly applied to research activities rather than profit margins.
The long-term nature of the contract indicates a sustained commitment to addressing significant health challenges.
The contract supports a vital mission in medical research, potentially leading to significant advancements in healthcare.

Sector Analysis

This contract falls within the Healthcare and Research & Development sectors, specifically focusing on biomedical research. St. Jude Children's Research Hospital is a leading institution in pediatric research. Benchmarking this contract is challenging due to its sole-source nature and specialized 'Cost No Fee' structure. However, federal spending in biomedical research is substantial, with agencies like NIH investing billions annually to advance medical knowledge and develop new treatments. The long duration suggests a significant investment in a particular research area.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded directly to a large, established research institution. There is no indication of subcontracting requirements for small businesses within the provided data. The focus is on the direct research capabilities of the primary awardee.

Oversight & Accountability

Oversight for this contract would primarily reside with the National Institutes of Health (NIH), a division of the Department of Health and Human Services. Given the 'Cost No Fee' structure and long duration, rigorous financial oversight and programmatic review are essential. This would involve monitoring expenditures to ensure they are allowable and reasonable, as well as assessing the progress and impact of the research. Transparency would be enhanced through regular reporting from the contractor and potentially through public dissemination of research findings, subject to any necessary confidentiality or intellectual property considerations.

Related Government Programs

National Institutes of Health Research Grants
Department of Health and Human Services Research Programs
Pediatric Medical Research Initiatives
Biomedical Research and Development Contracts

Risk Flags

Sole-source award requires justification for lack of competition.
Long contract duration necessitates ongoing performance monitoring.
'Cost No Fee' structure requires diligent cost oversight.
Lack of specific service code may indicate unique or specialized services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $28.9 million to ST JUDE CHILDREN'S RESEARCH HOSPITAL INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ST JUDE CHILDREN'S RESEARCH HOSPITAL INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $28.9 million.

What is the period of performance?

Start: 1999-01-15. End: 2010-04-30.

What is the specific research area funded by this contract, and what are the expected outcomes?

The provided data does not specify the exact research area or expected outcomes for this $28.9 million contract awarded to St. Jude Children's Research Hospital by the National Institutes of Health (NIH). However, St. Jude is renowned for its research into catastrophic diseases in children, including cancer, sickle cell disease, and other genetic disorders. Contracts of this magnitude and duration typically fund large-scale, long-term research projects aimed at understanding disease mechanisms, developing novel therapies, and improving patient outcomes. The 'Cost No Fee' structure suggests a focus on direct research costs without a profit motive, aligning with the hospital's mission. Further details would likely be found in the contract's statement of work and associated NIH research program documentation, which are not publicly available in this dataset.

Why was this contract awarded on a sole-source basis, and what is the justification for not competing it?

The contract was awarded on a sole-source basis because St. Jude Children's Research Hospital likely possesses unique capabilities, specialized facilities, or proprietary research expertise that are essential for the specific research objectives outlined by the National Institutes of Health (NIH). Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For research institutions, this could stem from established long-term research programs, unique patient populations for clinical studies, or highly specialized scientific equipment and personnel. The NIH would have a formal justification document detailing why competition was not feasible or advantageous for this particular contract, citing factors such as the need for continuity in ongoing research, the unique qualifications of St. Jude, or the absence of other entities capable of performing the work to the required standard.

How does the 'Cost No Fee' contract type impact the government's oversight and the contractor's incentives?

A 'Cost No Fee' (CNF) contract means the government reimburses the contractor for all allowable costs incurred in performing the contract, but the contractor does not receive any additional profit or fee. This structure is often used with non-profit organizations, particularly in research settings, where the primary goal is the advancement of knowledge rather than profit generation. For the government, this necessitates robust oversight to ensure that costs are reasonable, allocable, and allowable, as there is no profit incentive to drive efficiency. The contractor's incentive shifts from profit maximization to fulfilling the research objectives effectively and efficiently, as their primary compensation is the recovery of incurred costs. This requires strong financial management and programmatic monitoring by the contracting agency.

What is the significance of the contract's duration (over 11 years) in the context of federal research spending?

The duration of this contract, spanning from January 15, 1999, to April 30, 2010 (over 11 years), is highly significant for federal research spending. It indicates a long-term commitment to a specific research endeavor, suggesting that the project is complex, requires sustained effort, and is expected to yield results over an extended period. Federal agencies like NIH often fund multi-year research projects because scientific discovery is rarely a short-term process. Such long-term investments allow for in-depth investigation, follow-up studies, and the development of robust scientific understanding. This contrasts with shorter-term, task-order contracts that might focus on specific, immediate needs. The extended timeline also implies a stable funding stream for the research, which is crucial for maintaining scientific momentum and retaining specialized research personnel.

How does this contract compare to other federal spending on similar research services or institutions?

Comparing this specific contract is challenging due to its sole-source nature and unique 'Cost No Fee' structure. However, the total obligation of approximately $28.9 million over more than 11 years averages around $2.6 million per year. This figure is substantial but falls within the range of significant research grants and contracts awarded by agencies like NIH to major research institutions. NIH's overall budget is in the tens of billions of dollars annually, funding a vast array of research projects. While direct comparisons are difficult without knowing the specific research scope, this contract represents a considerable investment in a particular area of biomedical research, consistent with NIH's mission to support cutting-edge scientific inquiry at leading institutions.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST NO FEE (S)

Contractor Details

Address: 332 N LAUDERDALE ST, MEMPHIS, TN, 38105

Business Categories: Category Business, Hospital, Nonprofit Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $127,959,459

Exercised Options: $64,805,246

Current Obligation: $28,916,915

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline