HHS awarded $527M for convalescent plasma, a sole-source contract during the pandemic

Contract Overview

Contract Amount: $526,897,649 ($526.9M)

Contractor: America's Blood Centers

Awarding Agency: Department of Health and Human Services

Start Date: 2020-04-17

End Date: 2021-04-16

Contract Duration: 364 days

Daily Burn Rate: $1.4M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CONVALESCENT PLASMA UNITS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $526.9 million to AMERICA'S BLOOD CENTERS for work described as: CONVALESCENT PLASMA UNITS Key points: 1. The contract's value of $527M for convalescent plasma units represents a significant investment in a novel treatment during a public health emergency. 2. Competition dynamics were limited due to the urgent need and the nature of the product, leading to a sole-source award. 3. Risk indicators include the reliance on a single source and the potential for price volatility in a rapidly evolving market. 4. Performance context is critical, as the contract aimed to secure a vital resource for treating COVID-19 patients. 5. The sector positioning is within healthcare services, specifically focusing on biological products and emergency response. 6. Value for money is difficult to assess definitively given the emergency context, but the scale of the award suggests a high priority.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its emergency nature and the unique product. The $527M award for convalescent plasma units was a substantial commitment. Without comparable large-scale, sole-source procurements of this specific product under similar emergency conditions, a direct price comparison is difficult. However, the sheer volume procured suggests a strategic effort to secure supply, even if the per-unit cost might be higher than in a more competitive, non-emergency scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach was likely driven by the urgent need for convalescent plasma during the COVID-19 pandemic and the specific capabilities or existing relationships of the selected contractor, AMERICA'S BLOOD CENTERS. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a higher price than if multiple vendors had competed.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity for competitive bidding to drive down costs. This can result in a higher overall expenditure for the government compared to a competed contract.

Public Impact

The primary beneficiaries of this contract are COVID-19 patients who received treatment with convalescent plasma. The services delivered include the procurement and distribution of convalescent plasma units. The geographic impact is national, aiming to supply a critical medical resource across the United States. Workforce implications include support for the blood collection and processing industry, ensuring capacity for this vital treatment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award bypasses competitive pricing, potentially increasing costs for taxpayers.
Urgency of pandemic may have led to less rigorous price negotiation.
Effectiveness and long-term value of convalescent plasma as a treatment evolved, impacting the initial justification for the large award.
Reliance on a single entity for a critical resource poses supply chain risks.

Positive Signals

Contract secured a critical, life-saving treatment during an unprecedented public health crisis.
Large-scale procurement demonstrated government's ability to rapidly mobilize resources.
Supported the existing infrastructure of blood centers to meet demand.

Sector Analysis

This contract falls within the healthcare and life sciences sector, specifically concerning biological products and emergency medical countermeasures. The market for convalescent plasma is unique, driven by public health needs rather than routine commercial demand. Comparable spending benchmarks are scarce, as large-scale government procurement of this specific therapeutic agent is largely unprecedented and tied to the unique circumstances of the COVID-19 pandemic.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the nature of the award to AMERICA'S BLOOD CENTERS, a consortium of blood banks, the focus was likely on established infrastructure and capacity rather than direct small business subcontracting opportunities. The impact on the broader small business ecosystem in this specific procurement is likely minimal.

Oversight & Accountability

Oversight for this contract would fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures would involve tracking the delivery and utilization of the plasma units. Transparency is generally maintained through contract databases, though specific performance metrics and detailed spending breakdowns might be subject to public health emergency protocols.

Related Government Programs

COVID-19 Therapeutics
Biologics Procurement
Emergency Health Services
Public Health Response Contracts

Risk Flags

Sole-source award
Emergency procurement
Evolving therapeutic efficacy
High dollar value

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $526.9 million to AMERICA'S BLOOD CENTERS. CONVALESCENT PLASMA UNITS

Who is the contractor on this award?

The obligated recipient is AMERICA'S BLOOD CENTERS.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $526.9 million.

What is the period of performance?

Start: 2020-04-17. End: 2021-04-16.

What was the track record of AMERICA'S BLOOD CENTERS in supplying critical medical resources prior to this contract?

AMERICA'S BLOOD CENTERS (ABC) is a national network representing community-based blood centers. Prior to this contract, ABC has a long-standing history of coordinating blood collection and distribution across the United States, serving as a critical infrastructure for transfusion medicine. They are known for their role in ensuring blood supply for routine medical needs and have experience in managing large-scale blood drives and disaster relief efforts. While their expertise lies in blood products, the large-scale, pandemic-specific procurement of convalescent plasma represented a significant expansion of their role in therapeutic development and supply chain management during an unprecedented health crisis. Their established network and operational capacity were likely key factors in their selection for this sole-source award.

How does the $527M award compare to typical government spending on similar biological products?

Direct comparisons of the $527M award for convalescent plasma to typical government spending on 'similar' biological products are difficult due to the unique nature of convalescent plasma as a therapeutic agent and the emergency context of its procurement. Unlike vaccines or established pharmaceuticals that may have multiple manufacturers and competitive markets, convalescent plasma is derived from recovered individuals and its large-scale collection and processing require specific infrastructure. Government spending on other biologics, such as therapeutic antibodies or blood derivatives, can vary widely. However, a single award of this magnitude for a single product, especially under a sole-source justification, is substantial and indicative of a high-priority, emergency-driven acquisition rather than routine market procurement.

What were the primary risk indicators associated with this sole-source contract?

The primary risk indicators associated with this sole-source contract for convalescent plasma included the lack of price competition, which could lead to inflated costs for taxpayers. Secondly, the reliance on a single entity, AMERICA'S BLOOD CENTERS, created a potential bottleneck or supply chain vulnerability; any disruption to their operations could have significantly impacted the availability of this critical treatment. Furthermore, the therapeutic efficacy and optimal use of convalescent plasma evolved throughout the pandemic, introducing a risk that the large-scale investment might not yield the anticipated clinical benefits across all patient populations or disease stages. Finally, the rapid scale-up required during an emergency could introduce risks related to quality control and logistical challenges in collection, processing, and distribution.

How effective was the convalescent plasma program funded by this contract in treating COVID-19 patients?

The effectiveness of convalescent plasma as a treatment for COVID-19 has been a subject of ongoing research and evolving clinical guidance. Initial studies and anecdotal evidence suggested potential benefits, particularly when administered early in the course of illness to high-risk patients. This led to the large-scale procurement under Emergency Use Authorization (EUA). However, as more robust clinical trials were conducted, the evidence for significant clinical benefit, especially in later stages of the disease or in vaccinated individuals, became less clear. Regulatory bodies, including the FDA, eventually updated their guidance, reflecting a more nuanced understanding of its efficacy. Therefore, while the contract secured a vital resource during a critical period, the overall clinical impact and cost-effectiveness remain subjects of ongoing evaluation and debate within the medical community.

What are the historical spending patterns for convalescent plasma procurement by the federal government?

Historical federal spending patterns for convalescent plasma procurement are virtually non-existent prior to the COVID-19 pandemic. Convalescent plasma, while a known therapeutic concept, was not a routinely procured item by the federal government on a large scale. Its use was typically managed at the institutional or regional level by healthcare providers and blood banks for specific patient needs or during localized outbreaks. The $527 million awarded to AMERICA'S BLOOD CENTERS represents an unprecedented, pandemic-driven expenditure. This contract is an anomaly driven by an emergency public health crisis, rather than a reflection of established, recurring spending patterns for this specific product.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1717 K ST NW STE 900, WASHINGTON, DC, 20006

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

Financial Breakdown

Contract Ceiling: $544,372,649

Exercised Options: $526,897,649

Current Obligation: $526,897,649

Actual Outlays: $525,338,984

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline