HHS awards $39.5M contract for biotech R&D staffing, raising questions on competition and value

Contract Overview

Contract Amount: $39,492,903 ($39.5M)

Contractor: Tunnell Consulting Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-07-13

End Date: 2023-07-12

Contract Duration: 364 days

Daily Burn Rate: $108.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: R&D

Official Description: RECRUITMENT AND RETENTION OF ADVANCE PROFESSIONAL SCIENTIFIC SUBJECT MATTER EXPERTISE (SMES) STAFFING SUPPORT SERVICES IN RESEARCH AND DEVELOPMENT (R&D) AND ADVANCED RESEARCH AND DEVELOPMENT (AR&D) OF BIOTECHNOLOGY AND BIOPHARMACEUTICALS TO S

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $39.5 million to TUNNELL CONSULTING INC for work described as: RECRUITMENT AND RETENTION OF ADVANCE PROFESSIONAL SCIENTIFIC SUBJECT MATTER EXPERTISE (SMES) STAFFING SUPPORT SERVICES IN RESEARCH AND DEVELOPMENT (R&D) AND ADVANCED RESEARCH AND DEVELOPMENT (AR&D) OF BIOTECHNOLOGY AND BIOPHARMACEUTICALS TO S Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Significant portion of the contract value allocated to staffing support for specialized scientific expertise. 3. Performance period of one year with a total value of $39.5 million. 4. Contract type is Time and Materials, which can pose cost control challenges. 5. Focus on R&D and AR&D in biotechnology and biopharmaceuticals indicates a critical, specialized need. 6. The contract's value per day is approximately $108,500, requiring careful monitoring of labor hours and rates.

Value Assessment

Rating: fair

The contract's value of $39.5 million for one year of staffing support for specialized scientific expertise appears high, especially given the Time and Materials pricing structure. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The daily burn rate of approximately $108,500 necessitates close scrutiny of the hours billed and the rates charged to ensure value for money.

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 specialized capabilities or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that a competitive process could have provided.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium compared to what could have been achieved through a competitive solicitation. Without competing offers, it's harder to ensure the most cost-effective solution was secured.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) and its various research arms, which gain access to specialized scientific expertise. The contract supports critical research and development activities in biotechnology and biopharmaceuticals, potentially leading to advancements in public health. Services delivered include recruitment and retention of advanced professional scientific subject matter experts. The geographic impact is centered in Maryland, where the contractor is located, but the research supported could have national or global implications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Time and Materials contract type can lead to cost overruns if not managed tightly.
High daily burn rate requires diligent oversight to ensure efficient use of funds.

Positive Signals

Addresses a critical need for specialized scientific expertise in a vital sector.
Supports advanced research and development with potential public health benefits.

Sector Analysis

The contract falls within the Research and Development in Biotechnology sector, a rapidly growing and critical area for public health and economic development. The market for specialized scientific staffing in this niche is highly competitive, with a demand for deep expertise. This contract's value is significant for a single-year staffing support service, reflecting the high cost of specialized scientific talent in biotechnology and biopharmaceuticals.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. Given the specialized nature of the scientific expertise required, it is possible that larger, more specialized firms are better positioned to meet these needs, potentially limiting opportunities for small businesses in this specific award.

Oversight & Accountability

Oversight of this contract would primarily fall under the Department of Health and Human Services (HHS) contracting officers and program managers. Given the Time and Materials structure and sole-source award, robust monitoring of labor hours, rates, and deliverables is crucial to ensure accountability and prevent cost overruns. Transparency would be enhanced by public reporting of performance metrics and expenditures.

Related Government Programs

Biotechnology Research and Development Contracts
Scientific Staffing Support Services
Advanced Research and Development Contracts
Biopharmaceutical Industry Support

Risk Flags

Sole-source award
Time and Materials pricing
High contract value for one-year duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $39.5 million to TUNNELL CONSULTING INC. RECRUITMENT AND RETENTION OF ADVANCE PROFESSIONAL SCIENTIFIC SUBJECT MATTER EXPERTISE (SMES) STAFFING SUPPORT SERVICES IN RESEARCH AND DEVELOPMENT (R&D) AND ADVANCED RESEARCH AND DEVELOPMENT (AR&D) OF BIOTECHNOLOGY AND BIOPHARMACEUTICALS TO S

Who is the contractor on this award?

The obligated recipient is TUNNELL CONSULTING 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 $39.5 million.

What is the period of performance?

Start: 2022-07-13. End: 2023-07-12.

What is the specific expertise provided by Tunnell Consulting Inc. under this contract, and how does it align with HHS's R&D priorities?

The contract specifies "RECRUITMENT AND RETENTION OF ADVANCE PROFESSIONAL SCIENTIFIC SUBJECT MATTER EXPERTISE (SMES) STAFFING SUPPORT SERVICES IN RESEARCH AND DEVELOPMENT (R&D) AND ADVANCED RESEARCH AND DEVELOPMENT (AR&D) OF BIOTECHNOLOGY AND BIOPHARMACEUTICALS." This indicates that Tunnell Consulting is responsible for sourcing, vetting, and retaining highly specialized scientific personnel crucial for HHS's cutting-edge work in these fields. The alignment with HHS's R&D priorities would be in supporting the agency's mission to advance scientific understanding and develop new medical countermeasures or therapies within the biotechnology and biopharmaceutical domains. The specific SMEs could range from molecular biologists and geneticists to pharmacologists and bioinformaticians, depending on the precise research projects being supported.

How does the $39.5 million contract value compare to similar sole-source contracts for scientific staffing support in the biotech R&D sector?

Benchmarking this sole-source contract is challenging due to the lack of competitive data. However, $39.5 million for one year of specialized scientific staffing support is a substantial amount. Similar contracts, if competitively bid, might yield lower prices due to market forces. Sole-source awards often carry a premium. To assess value, HHS would need to compare the rates and services provided against internal benchmarks or publicly available data on similar, albeit potentially differently procured, staffing services within the federal government or large research institutions. The daily burn rate of approximately $108,500 suggests a significant number of high-cost, specialized personnel are being engaged.

What are the primary risks associated with a sole-source, Time and Materials contract for critical scientific expertise?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature means the government did not leverage competitive bidding, potentially leading to a higher price than could have been achieved otherwise. There's a risk of paying a premium without a clear justification based on market competition. Secondly, the Time and Materials (T&M) pricing model carries inherent risks of cost escalation. Without strict oversight and defined ceilings, the contractor could incur significant labor hours and material costs, driving up the total expenditure beyond initial projections. This model requires diligent monitoring of hours worked and rates charged to ensure efficiency and prevent overspending, especially for specialized, high-demand expertise.

What performance metrics or deliverables are likely being tracked to ensure the effectiveness of the recruited SMEs?

While specific deliverables are not detailed in the provided data, for a contract focused on recruiting and retaining Subject Matter Experts (SMEs) in R&D, performance metrics would likely revolve around the quality and timeliness of placements, the retention rates of the placed SMEs, and their subsequent contributions to research projects. HHS would likely track the number of qualified candidates identified and presented, the time-to-fill for critical positions, and potentially feedback from research leads on the performance and impact of the SMEs. Retention rates are crucial, as high turnover would negate the value of recruitment efforts. Ultimately, the effectiveness is tied to the progress and success of the R&D projects these SMEs support.

How does this contract fit into HHS's broader strategy for advancing biotechnology and biopharmaceutical research?

This contract is a tactical component of HHS's broader strategic objective to foster innovation and leadership in biotechnology and biopharmaceuticals. By ensuring access to top-tier scientific talent, HHS can accelerate its research initiatives, develop new medical countermeasures, and respond effectively to public health threats. The recruitment and retention of specialized SMEs are critical enablers for ambitious R&D programs. This contract allows HHS to augment its internal scientific workforce with external expertise, filling critical skill gaps and bringing in specialized knowledge that may not be readily available in-house, thereby supporting the agency's mission-critical research endeavors.

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 › N – Health R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tunnell Consulting Inc

Address: 6701 DEMOCRACY BLVD STE 405, BETHESDA, MD, 20817

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,492,903

Exercised Options: $39,492,903

Current Obligation: $39,492,903

Actual Outlays: $32,305,006

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline