HHS awards $155M contract for next-gen Ebola rapid test development to Orasure Technologies

Contract Overview

Contract Amount: $15,504,106 ($15.5M)

Contractor: Orasure Technologies Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2023-01-03

End Date: 2027-06-30

Contract Duration: 1,639 days

Daily Burn Rate: $9.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE OBJECTIVE OF THIS CONTRACT IS TO DEVELOP A SECOND-GENERATION ASSAY FOR THE ORAQUICK EBOLA RAPID ANTIGEN TEST AS A SUSTAINABLE, ENHANCED TEST INCLUDING ALTERNATIVE REAGENTS (ANTIBODY AND ANTIGEN) WITH CONTINUED AVAILABILITY, EXTENDED SHELF-LIFE, A

Place of Performance

Location: BETHLEHEM, NORTHAMPTON County, PENNSYLVANIA, 18015

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $15.5 million to ORASURE TECHNOLOGIES INC for work described as: THE OBJECTIVE OF THIS CONTRACT IS TO DEVELOP A SECOND-GENERATION ASSAY FOR THE ORAQUICK EBOLA RAPID ANTIGEN TEST AS A SUSTAINABLE, ENHANCED TEST INCLUDING ALTERNATIVE REAGENTS (ANTIBODY AND ANTIGEN) WITH CONTINUED AVAILABILITY, EXTENDED SHELF-LIFE, A Key points: 1. Contract focuses on enhancing an existing Ebola rapid antigen test with improved sustainability and shelf-life. 2. Development includes exploring alternative reagents for both antibodies and antigens. 3. The contract is a definitive contract type, indicating a long-term commitment. 4. Research and Development in Biotechnology is the primary NAICS code, highlighting a focus on scientific advancement. 5. The contract is not competed, raising questions about potential cost efficiencies and market engagement. 6. Orasure Technologies Inc. is the sole awardee, suggesting specialized capabilities or a sole-source justification. 7. The contract duration extends over four years, from January 2023 to June 2027.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specific R&D nature and lack of competition. The cost-plus-fixed-fee structure means costs are reimbursed plus a fixed fee, which can incentivize cost overruns if not carefully managed. Without competitive bids, it's difficult to assess if the fixed fee represents a fair profit margin or if the overall cost is optimized. Further analysis of the fixed fee and projected costs against similar R&D efforts would be needed for a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competed scenario.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government relies on the contractor's proposed costs and the negotiated fixed fee as the primary cost control mechanisms.

Public Impact

The primary beneficiaries are public health organizations and potentially individuals requiring rapid Ebola testing. The contract aims to deliver an enhanced, sustainable, and longer-lasting rapid diagnostic test for Ebola. Geographic impact is likely global, given the nature of infectious disease outbreaks. Workforce implications may include specialized roles in biotechnology research, development, and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may limit innovation and potentially increase costs.
Cost-plus-fixed-fee contracts can carry inherent risks of cost escalation if not rigorously monitored.
The sustainability and extended shelf-life claims require validation through performance metrics.

Positive Signals

Focus on developing a critical public health tool for a dangerous disease.
Orasure Technologies' existing expertise in diagnostic tests may lead to successful development.
The extended shelf-life could significantly improve logistical capabilities for deployment in remote or resource-limited settings.

Sector Analysis

This contract falls within the Biotechnology Research and Development sector, a subset of the broader healthcare and life sciences industry. This sector is characterized by high innovation, significant R&D investment, and often long development cycles. The market for rapid diagnostic tests is competitive, driven by the need for quick and accurate disease detection, particularly for emerging infectious diseases like Ebola. Government funding plays a crucial role in advancing such technologies, often supporting early-stage development that the private sector may deem too risky.

Small Business Impact

This contract was not competed and does not indicate any small business set-aside provisions. Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award. The focus is on the prime contractor's capabilities. Any involvement of small businesses would likely be at the discretion of Orasure Technologies Inc. as a subcontractor.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). As a cost-plus-fixed-fee contract, rigorous financial oversight and performance monitoring will be critical to ensure funds are used effectively and milestones are met. Transparency will depend on HHS's reporting practices and any public disclosures made by the agency or contractor regarding progress and outcomes.

Related Government Programs

Ebola Virus Disease Research
Diagnostic Test Development
Biotechnology Research and Development
Public Health Emergency Preparedness
Rapid Diagnostic Assays

Risk Flags

Sole-source award lacks competitive pricing pressure.
Cost-plus-fixed-fee contracts require diligent oversight to manage costs.
Development of novel reagents and extended shelf-life carries inherent technical risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $15.5 million to ORASURE TECHNOLOGIES INC. THE OBJECTIVE OF THIS CONTRACT IS TO DEVELOP A SECOND-GENERATION ASSAY FOR THE ORAQUICK EBOLA RAPID ANTIGEN TEST AS A SUSTAINABLE, ENHANCED TEST INCLUDING ALTERNATIVE REAGENTS (ANTIBODY AND ANTIGEN) WITH CONTINUED AVAILABILITY, EXTENDED SHELF-LIFE, A

Who is the contractor on this award?

The obligated recipient is ORASURE TECHNOLOGIES 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 $15.5 million.

What is the period of performance?

Start: 2023-01-03. End: 2027-06-30.

What is Orasure Technologies Inc.'s track record with government contracts, particularly in developing diagnostic tools?

Orasure Technologies Inc. has a history of working with government agencies, including the Department of Defense and HHS, on diagnostic solutions. They are known for developing point-of-care diagnostic tests. While specific details on past R&D contracts for Ebola diagnostics would require deeper data mining, their general experience in developing and manufacturing diagnostic devices suggests a foundational capability. However, the success of this specific contract will depend on their ability to innovate and meet the advanced requirements for a second-generation assay, including extended shelf-life and alternative reagents, which may represent new challenges even for an experienced contractor.

How does the $155 million cost compare to similar R&D contracts for diagnostic test development?

Directly comparing the $155 million cost to similar R&D contracts for diagnostic test development is complex without access to a comprehensive database of R&D contract values and specific project scopes. However, for a multi-year project (over 4 years) focused on developing a sophisticated diagnostic assay for a high-consequence pathogen like Ebola, involving novel reagent exploration and aiming for enhanced shelf-life, this figure is within a plausible range for significant R&D investment. The cost-plus-fixed-fee structure means the total expenditure could fluctuate based on actual costs incurred, but the initial award indicates a substantial commitment. Benchmarking would ideally involve comparing the cost per research year or cost per development milestone against comparable government-funded biotechnology R&D efforts.

What are the primary risks associated with developing a 'second-generation' assay, and how are they mitigated in this contract?

The primary risks in developing a second-generation assay include technical feasibility (can the enhanced features be reliably achieved?), performance degradation (will the new reagents or extended shelf-life compromise accuracy or sensitivity?), manufacturing scalability, and regulatory approval hurdles. Mitigation strategies within this contract likely involve the cost-plus-fixed-fee structure, which allows for reimbursement of necessary R&D expenses, and the defined performance objectives. The contract's duration also provides a timeframe for iterative development and testing. However, the specific technical risks related to alternative reagents and extended shelf-life require close monitoring by the government contracting officer and technical representatives to ensure the project stays on track and meets its intended goals.

What is the expected effectiveness of the new Ebola rapid antigen test compared to existing ones?

The contract aims to develop a 'sustainable, enhanced test including alternative reagents (antibody and antigen) with continued availability, extended shelf-life.' This implies the second-generation assay is expected to be more effective in terms of logistical usability (longer shelf-life reduces waste and improves deployment readiness) and potentially in performance characteristics, although the latter is not explicitly detailed beyond 'enhanced.' The goal is likely to maintain or improve diagnostic accuracy while addressing the practical challenges of deploying and storing current tests, especially in resource-limited or challenging environments where Ebola outbreaks occur. Effectiveness will be measured against predefined performance metrics during the contract's R&D phases.

How has federal spending on Ebola preparedness and response evolved, and where does this contract fit in?

Federal spending on Ebola preparedness and response has seen significant peaks, particularly following major outbreaks like the 2014-2016 West Africa epidemic. This spending typically targets surveillance, vaccine development, therapeutic research, and diagnostic capabilities. This $155 million contract fits into the ongoing strategy of maintaining and advancing diagnostic tools, ensuring the U.S. and its partners have reliable and improved methods for detecting Ebola. It represents a proactive investment in preparedness, aiming to enhance existing capabilities rather than responding to an immediate crisis, reflecting a long-term commitment to mitigating the threat of future outbreaks.

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

Solicitation ID: 75A50122R00024

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 220 E 1ST ST, BETHLEHEM, PA, 18015

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

Financial Breakdown

Contract Ceiling: $15,504,106

Exercised Options: $15,504,106

Current Obligation: $15,504,106

Actual Outlays: $3,517,157

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline