HHS Awards $75M for Pandemic Preparedness Platform to Cepheid

Contract Overview

Contract Amount: $74,983,757 ($75.0M)

Contractor: Cepheid

Awarding Agency: Department of Health and Human Services

Start Date: 2021-07-23

End Date: 2028-12-31

Contract Duration: 2,718 days

Daily Burn Rate: $27.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: OTA - PANDEMIC PREPAREDNESS AND RESPONSE: ESTABLISHING A PLATFORM FOR DIAGNOSIS AND SURVEILLANCE OF EMERGING THREATS

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $75.0 million to CEPHEID for work described as: OTA - PANDEMIC PREPAREDNESS AND RESPONSE: ESTABLISHING A PLATFORM FOR DIAGNOSIS AND SURVEILLANCE OF EMERGING THREATS Key points: 1. Significant investment in critical pandemic preparedness infrastructure. 2. Cepheid is a major player in diagnostic solutions. 3. Potential risk of vendor lock-in for future surveillance needs. 4. Focus on R&D in biotechnology, a rapidly evolving sector.

Value Assessment

Rating: fair

The contract is Cost No Fee, which provides less direct incentive for cost control compared to fixed-price contracts. Benchmarking is difficult without specific cost breakdowns, but the scale suggests a substantial investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive process. However, the specific award type (Definitive Contract) and lack of detailed pricing information make it hard to assess price discovery effectiveness.

Taxpayer Impact: Taxpayers are funding a critical national security capability, but the cost-effectiveness needs ongoing monitoring due to the contract type.

Public Impact

Enhances national capacity to detect and respond to emerging health threats. Supports the development of advanced diagnostic and surveillance technologies. Aims to improve public health outcomes through early detection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost control uncertainty with Cost No Fee contract.
Long contract duration (over 7 years) may not adapt to rapid tech changes.
Limited visibility into specific performance metrics and milestones.

Positive Signals

Addresses a critical national need for pandemic preparedness.
Leverages established company (Cepheid) with relevant expertise.
Competition was sought, indicating an attempt at market fairness.

Sector Analysis

This contract falls under Research and Development in Biotechnology, a sector crucial for public health and national security. Spending in this area is often high due to the complexity and innovation required.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract award.

Oversight & Accountability

Oversight will be crucial to ensure Cepheid meets performance milestones and that the platform effectively contributes to pandemic preparedness goals. Regular reviews of progress and spending are necessary.

Related Government Programs

Research and Development in Biotechnology (except Nanobiotechnology)
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Cost overruns due to 'Cost No Fee' structure.
Technological obsolescence given the long contract duration.
Lack of clear performance metrics for effectiveness.
Potential for vendor lock-in impacting future procurements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $75.0 million to CEPHEID. OTA - PANDEMIC PREPAREDNESS AND RESPONSE: ESTABLISHING A PLATFORM FOR DIAGNOSIS AND SURVEILLANCE OF EMERGING THREATS

Who is the contractor on this award?

The obligated recipient is CEPHEID.

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 $75.0 million.

What is the period of performance?

Start: 2021-07-23. End: 2028-12-31.

How will the effectiveness of the diagnostic and surveillance platform be measured against its objectives?

Effectiveness will likely be measured through key performance indicators (KPIs) related to the platform's ability to accurately detect and track emerging threats, speed of deployment, and integration with existing public health systems. Regular reporting and independent validation studies will be essential to assess its real-world impact and ensure it meets the program's goals.

What are the specific risks associated with a long-term 'Cost No Fee' contract in a rapidly evolving technological field like biotechnology?

A 'Cost No Fee' contract offers less incentive for the contractor to control costs, potentially leading to overspending. In a fast-paced field like biotech, a long duration (over 7 years) risks the technology becoming outdated before completion, requiring costly modifications or rendering the investment less effective. This necessitates robust oversight and clear performance benchmarks.

Beyond initial competition, how will HHS ensure continued value and innovation throughout the contract's lifecycle?

HHS can ensure continued value through phased performance reviews, milestone-based payments (even within a Cost No Fee structure), and incorporating mechanisms for technology refresh or adaptation. Encouraging innovation could involve performance incentives tied to achieving specific technological advancements or successful integration with new detection methods identified during the contract period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: BAA-18-100-SOL-00003

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 904 CARIBBEAN DR, SUNNYVALE, CA, 94089

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $103,577,704

Exercised Options: $74,983,757

Current Obligation: $74,983,757

Actual Outlays: $32,471,242

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline