HHS awards $79.9M contract for pharmaceutical preparation manufacturing to Elusys Therapeutics Inc

Contract Overview

Contract Amount: $79,947,200 ($79.9M)

Contractor: Elusys Therapeutics Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2021-08-06

End Date: 2023-09-30

Contract Duration: 785 days

Daily Burn Rate: $101.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANTHIM LETTER CONTRACT

Place of Performance

Location: PARSIPPANY, MORRIS County, NEW JERSEY, 07054

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $79.9 million to ELUSYS THERAPEUTICS INC for work described as: ANTHIM LETTER CONTRACT Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 785 days suggests a significant, ongoing need for the specified pharmaceutical preparations. 3. The fixed-price contract type provides cost certainty for the government but may limit flexibility. 4. The award to a single vendor raises questions about market competition and potential for alternative solutions. 5. The geographic location of the contractor in New Jersey may have implications for supply chain resilience. 6. The absence of small business participation raises concerns about equitable distribution of federal dollars.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of competitive bidding. The firm fixed-price structure offers predictability, but without comparison to other offers or market rates, it's difficult to definitively assess if the $79.9 million represents optimal value for money. The duration of the contract suggests a substantial requirement, and the pricing should be scrutinized against any available historical data for similar pharmaceutical preparations or against industry benchmarks for manufacturing services.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or is the sole provider of a critical good or service. The lack of competition means there was no opportunity for price negotiation based on multiple bids, which can lead to higher costs for the government compared to a competitively awarded contract.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in taxpayers paying a premium for goods or services.

Public Impact

The primary beneficiaries are likely government agencies requiring pharmaceutical preparations for public health initiatives or emergency preparedness. The contract supports the manufacturing and supply of essential pharmaceutical products. The geographic impact is primarily centered around the contractor's operations in New Jersey. Workforce implications may include job creation or retention within the pharmaceutical manufacturing sector at Elusys Therapeutics Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for small businesses.
Potential for vendor lock-in due to specialized nature of pharmaceutical manufacturing.

Positive Signals

Ensures a dedicated supply of critical pharmaceutical preparations.
Firm fixed-price contract provides budget certainty.
Contract supports a specific vendor's manufacturing capabilities.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a critical component of the healthcare and defense industrial base, involving the production of drugs, vaccines, and other medical supplies. This contract falls within the broader life sciences and advanced manufacturing industries. Spending in this sector is often driven by public health needs, national security requirements, and research and development initiatives. Benchmarking this specific award against overall federal spending in pharmaceutical manufacturing requires detailed analysis of similar sole-source or competitively awarded contracts for comparable products.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award inherently limits opportunities for small businesses to participate in this specific contract. This could represent a missed opportunity to foster small business growth within the pharmaceutical manufacturing supply chain and to leverage their agility and innovation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and its respective contracting officers and program managers. Transparency is limited due to the sole-source nature of the award. Accountability measures would be defined within the contract terms and conditions, focusing on delivery schedules, quality standards, and adherence to specifications. The Inspector General's office within HHS may conduct audits or investigations as deemed necessary.

Related Government Programs

Biologics and Pharmaceuticals
Medical Materiel
Public Health Preparedness
Emergency Pharmaceutical Stockpiles

Risk Flags

Sole-source award
Lack of competition
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $79.9 million to ELUSYS THERAPEUTICS INC. ANTHIM LETTER CONTRACT

Who is the contractor on this award?

The obligated recipient is ELUSYS THERAPEUTICS INC.

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 $79.9 million.

What is the period of performance?

Start: 2021-08-06. End: 2023-09-30.

What is the historical spending pattern for Elusys Therapeutics Inc. with the federal government, particularly for similar pharmaceutical preparations?

Analyzing the historical spending patterns for Elusys Therapeutics Inc. is crucial for understanding their track record and the government's past reliance on their services. Without access to a comprehensive federal procurement database or specific contract details beyond this award, it's difficult to provide precise historical figures. However, a review of federal contract databases would reveal if this $79.9 million award represents a significant increase or continuation of previous engagements. If Elusys has a history of receiving sole-source contracts for specialized pharmaceutical preparations, it might indicate a unique capability or a long-standing relationship. Conversely, a sudden large award after a period of minimal federal contracting could warrant further investigation into the justification for the sole-source designation and the pricing structure.

How does the pricing of this contract compare to similar pharmaceutical preparation contracts awarded competitively?

Comparing the pricing of this sole-source contract to competitively awarded contracts for similar pharmaceutical preparations is essential for assessing value for money. Since this contract was not competed, there is no direct benchmark from this award itself. To perform a meaningful comparison, one would need to identify other federal contracts for comparable pharmaceutical products, ideally those awarded within a similar timeframe and to different manufacturers through a competitive bidding process. Factors such as the specific type of pharmaceutical preparation, quantity, purity standards, manufacturing complexity, and delivery timelines would need to be matched as closely as possible. If competitively sourced contracts for similar items show significantly lower per-unit costs or overall contract values, it would suggest that this sole-source award may be less cost-effective for the government.

What are the specific risks associated with a sole-source award for pharmaceutical preparation manufacturing?

A primary risk associated with sole-source awards in pharmaceutical preparation manufacturing is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the most favorable price. Another significant risk is vendor lock-in; if Elusys Therapeutics Inc. is the sole provider of a critical product, the government becomes dependent on them, potentially limiting future options or leverage. Furthermore, sole-source contracts can reduce transparency and accountability, as the justification for awarding to a single vendor might not always be fully transparent to the public or other potential suppliers. This can also stifle innovation, as there is less incentive for alternative suppliers to develop competing products or processes if the market is effectively closed off.

What is the assessed effectiveness of Elusys Therapeutics Inc. in fulfilling previous government contracts, if any?

Assessing the effectiveness of Elusys Therapeutics Inc. in fulfilling previous government contracts is critical for understanding their reliability and performance history. This information is typically available through federal contract performance databases (e.g., CPARS - Contractor Performance Assessment Reporting System), although access may be restricted. A review of these records would indicate past performance ratings, any instances of contract non-compliance, delivery delays, quality issues, or disputes. If Elusys has a strong record of successful contract completion with positive performance assessments, it would lend confidence to the current award. Conversely, a history of poor performance or unresolved issues would raise significant concerns about their ability to meet the requirements of this $79.9 million contract, especially given its sole-source nature.

What is the strategic importance of this contract within the broader context of HHS's mission and public health preparedness?

The strategic importance of this contract likely lies in ensuring the availability of specific pharmaceutical preparations critical for public health initiatives or emergency preparedness, aligning with HHS's core mission. The Office of the Assistant Secretary for Preparedness and Response (ASPR) specifically focuses on preparing the nation for the health effects of public health emergencies, which often involves stockpiling or ensuring the rapid availability of medical countermeasures, including pharmaceuticals. If the preparations manufactured under this contract are designated as essential for pandemic response, bioterrorism threats, or other national health security concerns, then securing a reliable supply chain, even through a sole-source award, could be deemed strategically vital. The contract's value and duration suggest a significant role in maintaining national health security readiness.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 6/28/2021

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nighthawk Biosciences, Inc.

Address: 4 CENTURY DR STE 260, PARSIPPANY, NJ, 07054

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

Financial Breakdown

Contract Ceiling: $79,947,200

Exercised Options: $79,947,200

Current Obligation: $79,947,200

Actual Outlays: $36,294,860

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline