HHS awards $144.8M contract for industrial base expansion, with a focus on R&D in physical, engineering, and life sciences

Contract Overview

Contract Amount: $144,763,969 ($144.8M)

Contractor: Safesource Direct LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-30

End Date: 2026-06-30

Contract Duration: 1,004 days

Daily Burn Rate: $144.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: INDUSTRIAL BASE EXPANSION OF NBR

Place of Performance

Location: BROUSSARD, LAFAYETTE County, LOUISIANA, 70518

State: Louisiana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $144.8 million to SAFESOURCE DIRECT LLC for work described as: INDUSTRIAL BASE EXPANSION OF NBR Key points: 1. Contract aims to bolster the nation's industrial base, particularly in critical R&D sectors. 2. The firm-fixed-price structure suggests a defined scope and budget, potentially limiting cost overruns. 3. Competition was full and open, indicating a broad market search and potential for competitive pricing. 4. The contract duration of approximately 3 years allows for sustained effort in R&D. 5. Performance is located in Louisiana, potentially creating regional economic and workforce impacts. 6. The specific NAICS code (541715) points to specialized research and development activities.

Value Assessment

Rating: good

The contract value of $144.8 million for a period of roughly three years for industrial base expansion in R&D appears reasonable given the specialized nature of the work. Benchmarking against similar large-scale R&D initiatives is challenging due to the unique focus on industrial base expansion. However, the firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. The award to SAFESOURCE DIRECT LLC warrants further investigation into their specific capabilities in this niche.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The government actively sought proposals from a wide range of qualified sources. The number of bidders is not specified, but the open competition generally promotes price discovery and encourages vendors to offer competitive terms to secure the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider selection of innovative solutions, maximizing the value for public funds.

Public Impact

The primary beneficiaries are likely entities within the targeted R&D sectors, including research institutions and potentially manufacturing firms that can leverage the expanded industrial base. The contract will deliver advancements and strengthening within the physical, engineering, and life sciences research and development landscape. Geographic impact is concentrated in Louisiana, where the contract performance is scheduled. Workforce implications may include job creation and skill development within specialized R&D and industrial sectors in Louisiana.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on performance metrics and deliverables makes it difficult to assess the direct impact of the industrial base expansion.
The long-term sustainability and economic impact of the industrial base expansion beyond the contract period are not yet clear.
Potential for the expanded industrial base to become reliant on government funding without a clear transition to commercial viability.

Positive Signals

The contract's focus on expanding the industrial base addresses a critical national need for robust domestic capabilities in key scientific and engineering fields.
The firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust market engagement and potential for innovation.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically NAICS code 541715, which covers R&D in the Physical, Engineering, and Life Sciences. This sector is crucial for national innovation, economic growth, and maintaining a competitive edge. The contract's objective of expanding the industrial base suggests an effort to strengthen domestic supply chains and manufacturing capabilities within these scientific domains, potentially reducing reliance on foreign sources and fostering domestic technological advancement. Comparable spending benchmarks in this area can vary widely depending on the specific research focus and scale.

Small Business Impact

The provided data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the direct impact on small business participation may be limited unless they are subcontractors to the prime contractor, SAFESOURCE DIRECT LLC. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this industrial base expansion effort.

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). The firm-fixed-price nature of the contract provides a degree of financial oversight by setting a ceiling on costs. Transparency would be enhanced by public reporting of key milestones and outcomes related to the industrial base expansion. The extent of Inspector General (IG) jurisdiction would depend on the specific terms and conditions of the contract and any potential for fraud, waste, or abuse.

Related Government Programs

National Security Industrial Base
Biotechnology and Pharmaceutical Manufacturing
Advanced Materials Research
Defense Industrial Base Modernization
Public Health Preparedness Initiatives

Risk Flags

Potential for scope creep if R&D objectives evolve significantly.
Risk of contractor underperformance if technical challenges are underestimated.
Dependency on contractor's long-term viability and commitment to the expanded base.
Ensuring equitable distribution of benefits from industrial base expansion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $144.8 million to SAFESOURCE DIRECT LLC. INDUSTRIAL BASE EXPANSION OF NBR

Who is the contractor on this award?

The obligated recipient is SAFESOURCE DIRECT LLC.

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 $144.8 million.

What is the period of performance?

Start: 2023-09-30. End: 2026-06-30.

What specific capabilities or technologies does SAFESOURCE DIRECT LLC possess that make them suitable for expanding the industrial base in R&D?

The provided data does not detail the specific capabilities or technologies of SAFESOURCE DIRECT LLC. To assess their suitability, a review of their past performance, technical proposals submitted for this contract, and any relevant certifications or accreditations would be necessary. Given the contract's focus on 'INDUSTRIAL BASE EXPANSION OF NBR' (likely National Biodefense Research), SAFESOURCE DIRECT LLC would ideally have demonstrated experience in areas such as advanced manufacturing, supply chain management for sensitive materials, or supporting research infrastructure development. Without this specific information, their suitability remains an assumption based on them being the awardee.

How does the $144.8 million contract value compare to typical spending on industrial base expansion initiatives in the R&D sector?

Comparing the $144.8 million contract value to typical spending on industrial base expansion in R&D is complex, as such initiatives can vary significantly in scope and objective. Large-scale efforts to bolster national capabilities, especially in areas critical for public health or national security (as suggested by the potential 'NBR' acronym), can command substantial funding. This figure appears substantial for a single contract but might represent a portion of a larger, multi-year strategic investment. Benchmarking would require identifying comparable government programs focused on similar R&D industrial base strengthening, considering factors like duration, specific technological focus, and the number of entities involved.

What are the primary risks associated with a firm-fixed-price contract for R&D industrial base expansion?

A primary risk with firm-fixed-price (FFP) contracts in R&D industrial base expansion is that the fixed price may not adequately account for unforeseen technical challenges or evolving research needs inherent in R&D. If the contractor underestimates the complexity or cost of developing or expanding the industrial base, they may face financial losses, potentially impacting their ability or willingness to complete the work effectively. Conversely, if the price is set too high, taxpayers may overpay. Another risk is that the contractor might cut corners on quality or scope to maintain profitability, especially if unexpected issues arise. The government's ability to adapt the scope or requirements mid-contract is also limited under FFP, which can be a drawback in dynamic R&D environments.

What are the expected performance outcomes and metrics for this 'INDUSTRIAL BASE EXPANSION OF NBR' contract?

The provided data does not specify the expected performance outcomes or metrics for this contract. Typically, for an industrial base expansion contract, outcomes might include metrics related to increased manufacturing capacity, development of new production processes, establishment of secure supply chains for critical materials, or enhanced readiness of research facilities. Specific metrics could involve quantifiable increases in production volume, successful implementation of new technologies, reduced lead times for critical components, or improved cybersecurity of research infrastructure. Without the contract's statement of work or performance work statement, these remain speculative.

What is the historical spending pattern for industrial base expansion contracts awarded by HHS or similar agencies?

The provided data does not offer historical spending patterns for industrial base expansion contracts by HHS or similar agencies. To analyze this, one would need access to historical contract databases to identify previous awards for similar objectives, track spending trends over time, and identify key contractors or R&D areas that have received significant investment. Understanding historical patterns could reveal whether this $144.8 million award represents an increase, decrease, or continuation of previous investment levels in strengthening the industrial base for R&D purposes.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA810122SC001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 200 SAINT NAZAIRE RD, BROUSSARD, LA, 70518

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

Financial Breakdown

Contract Ceiling: $144,763,969

Exercised Options: $144,763,969

Current Obligation: $144,763,969

Actual Outlays: $118,945,659

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline