NIH awards $143M for AIDS research, with PPD Development LP securing a significant portion over a decade

Contract Overview

Contract Amount: $143,391,005 ($143.4M)

Contractor: PPD Development LP

Awarding Agency: Department of Health and Human Services

Start Date: 2000-06-22

End Date: 2010-01-31

Contract Duration: 3,510 days

Daily Burn Rate: $40.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: AIDS RESEARCH (BASIC)

Place of Performance

Location: WILMINGTON, NEW HANOVER County, NORTH CAROLINA, 28412

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $143.4 million to PPD DEVELOPMENT LP for work described as: AIDS RESEARCH (BASIC) Key points: 1. Value for money appears fair given the long-term nature of the contract and the critical research area. 2. Competition dynamics indicate a full and open competition, suggesting a potentially competitive pricing environment. 3. Risk indicators are moderate, typical for long-term research grants where outcomes are inherently uncertain. 4. Performance context is within the scope of basic scientific research, with outcomes measured by research progress. 5. Sector positioning is within the Health and Human Services sector, specifically focusing on critical medical research.

Value Assessment

Rating: fair

The contract value of $143.4 million over approximately 10 years for AIDS research suggests a substantial investment. Benchmarking this against similar long-term, complex research grants is challenging due to the unique nature of scientific discovery. However, the Cost Plus Fixed Fee (CPFF) contract type implies that costs are reimbursed, with a fixed fee for profit, which can be a reasonable approach for research where exact costs are difficult to predict. The total award amount of $40.8 million is a significant portion of the overall contract value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. While the number of bidders is not explicitly stated, this method generally fosters a competitive environment, which can lead to better pricing and innovation. The agency sought proposals from a wide range of potential contractors.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through a competitive bidding process, potentially driving down costs and improving service quality.

Public Impact

The primary beneficiaries are individuals affected by AIDS and the broader public health community through advancements in research. Services delivered include critical basic research aimed at understanding and combating the AIDS virus. The geographic impact is national, supporting research efforts across the United States. Workforce implications include employment for researchers, technicians, and administrative staff involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPFF contract type can incentivize cost overruns if not closely monitored, as the contractor is reimbursed for costs incurred.
Long-term research contracts carry inherent uncertainty in outcomes, making it difficult to guarantee a specific return on investment.
The duration of the contract (over 10 years) requires sustained oversight to ensure continued relevance and effectiveness.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
The contract supports critical public health research in a vital area.
The long-term nature of the award provides stability for sustained research efforts.

Sector Analysis

This contract falls within the Health and Human Services sector, specifically focusing on biomedical research. The market for such specialized research is driven by government funding and academic institutions. Comparable spending benchmarks would involve looking at other large-scale, multi-year research grants awarded by agencies like the NIH for complex diseases. The total award of $40.8 million represents a significant investment in this specific research area.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus was on securing the best research capabilities through open competition. There is no explicit information on subcontracting plans with small businesses, but it is possible that PPD Development LP may engage small businesses as subcontractors depending on project needs.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Institutes of Health (NIH), a component of HHS. Mechanisms would include regular progress reports, financial reviews, and potentially site visits. Accountability is ensured through contract terms and performance metrics related to research milestones. Transparency is generally maintained through public reporting of research findings, although specific contract details might be less accessible.

Related Government Programs

National Institutes of Health Research Grants
AIDS/HIV Research Funding
Biomedical Research Contracts
Department of Health and Human Services Contracts

Risk Flags

Long contract duration requires sustained oversight.
CPFF contract type necessitates careful cost monitoring.
Research outcomes are inherently uncertain.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $143.4 million to PPD DEVELOPMENT LP. AIDS RESEARCH (BASIC)

Who is the contractor on this award?

The obligated recipient is PPD DEVELOPMENT LP.

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 $143.4 million.

What is the period of performance?

Start: 2000-06-22. End: 2010-01-31.

What is the track record of PPD Development LP in securing and managing large federal research contracts, particularly in the health sector?

PPD Development LP, now part of Thermo Fisher Scientific, has a significant history of engaging with federal agencies, including the NIH, on various research and development projects. Their expertise often lies in clinical research services, drug development, and laboratory testing. Securing a contract of this magnitude from the NIH suggests a strong proposal and a demonstrated capability to handle complex, long-term research initiatives. While specific details on past performance metrics for this exact contract are not provided, PPD's general profile indicates they are a major player in the life sciences services industry, accustomed to rigorous federal oversight and scientific standards. Their ability to manage such a substantial award over a decade points to a robust organizational structure and project management capabilities.

How does the total award amount of $40.8 million compare to the overall contract value of $143.4 million, and what does this imply about the contract's structure?

The total award amount of $40.8 million represents the actual funds disbursed or obligated at a specific point in time, likely as of the data extraction. The overall contract value of $143.4 million signifies the maximum potential value over the contract's entire duration (June 22, 2000, to January 31, 2010). This substantial difference implies that the contract was structured as a multi-year award with phased funding. The agency likely obligated funds incrementally as the contract progressed and research milestones were met. This phased approach is common for long-term research projects, allowing for flexibility and ensuring funds are available for ongoing work without committing the entire sum upfront, thereby managing financial risk and adapting to research progress.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for basic research, and how might they be mitigated?

The primary risk with a CPFF contract, especially for basic research, is the potential for cost overruns. Since the contractor is reimbursed for all allowable costs plus a fixed fee, there can be less incentive to control expenses compared to fixed-price contracts. In basic research, outcomes are inherently uncertain, making it difficult to define precise cost parameters upfront. Mitigation strategies include rigorous cost monitoring by the government, clear definition of allowable costs, regular audits, and performance-based incentives tied to research progress rather than just cost containment. The fixed fee itself, if set appropriately, provides a defined profit margin, and the government's oversight plays a crucial role in ensuring efficiency and preventing unnecessary expenditures.

What does the 'NC' in the 'st' (state) field signify, and does it impact the contract's geographic scope or performance?

The 'NC' in the 'st' field likely stands for North Carolina. This indicates the primary location or headquarters of the contractor, PPD Development LP, or a significant operational site relevant to this contract. While the contract supports AIDS research, which has a national and global impact, the 'NC' designation points to the state where a substantial portion of the contract's administrative or research activities may be based. It does not necessarily limit the geographic scope of the research itself, as research collaborations and data collection can occur nationwide or even internationally. However, it does provide a specific geographic anchor for the contractor's involvement.

Given the contract's duration (2000-2010), how does its spending pattern compare to current federal investments in AIDS research?

This contract, spanning from 2000 to 2010, represents a significant investment during a period of intense focus on HIV/AIDS research. Federal spending on HIV/AIDS research has evolved considerably since then, with increased emphasis on treatment, prevention (like PrEP), and vaccine development. While $143.4 million is substantial, current annual federal outlays for HIV/AIDS research, primarily through NIH and CDC, are often in the billions of dollars. For instance, NIH's National Institute of Allergy and Infectious Diseases (NIAID) alone receives substantial funding dedicated to HIV/AIDS research annually. Therefore, while this contract was a major undertaking for its time, current federal investment levels in this area are considerably higher, reflecting advancements in scientific understanding and public health priorities.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jaguar Holding Company II (UEI: 078391342)

Address: 3151 17TH STREET EXTENSION, WILMINGTON, NC, 07

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $143,391,005

Exercised Options: $143,391,005

Current Obligation: $143,391,005

Timeline