HHS awards $60M contract for pharmaceutical preparations to Genentech USA, Inc

Contract Overview

Contract Amount: $60,000,000 ($60.0M)

Contractor: Genentech USA, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-14

End Date: 2025-03-31

Contract Duration: 929 days

Daily Burn Rate: $64.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE PURPOSE AND NEED FOR THIS PROPOSED REQUIREMENT IS TO PROVIDE THE DIVISION OF STRATEGIC NATIONAL STOCKPILE (DSNS), ASSISTANT SECRETARY OF PREPAREDNESS AND RESPONSE (ASPR), WITH A CONTRACTING VEHICLE FOR PRODUCT(S) NEEDED IN ORDER TO SUPPORT "

Place of Performance

Location: SOUTH SAN FRANCISCO, SAN MATEO County, CALIFORNIA, 94080

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $60.0 million to GENENTECH USA, INC for work described as: THE PURPOSE AND NEED FOR THIS PROPOSED REQUIREMENT IS TO PROVIDE THE DIVISION OF STRATEGIC NATIONAL STOCKPILE (DSNS), ASSISTANT SECRETARY OF PREPAREDNESS AND RESPONSE (ASPR), WITH A CONTRACTING VEHICLE FOR PRODUCT(S) NEEDED IN ORDER TO SUPPORT " Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is for pharmaceutical preparations, indicating a need for critical medical supplies. 3. The duration of the contract is approximately 929 days, spanning over two years. 4. The contract type is Firm Fixed Price, which provides cost certainty for the government. 5. The award is a Delivery Order, suggesting it's part of a larger contracting vehicle. 6. The agency involved is the Department of Health and Human Services (HHS), specifically ASPR. 7. The contractor, Genentech USA, Inc., is a known entity in the pharmaceutical sector.

Value Assessment

Rating: good

The contract value of $60 million over approximately 2.5 years for pharmaceutical preparations appears reasonable given the nature of the products and the supplier. Without specific product details or market benchmarks for these particular preparations, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure helps manage cost risks for the government. Comparing this to similar large-scale pharmaceutical supply contracts would provide further context on its competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally fosters price discovery and allows the government to select the most advantageous offer. The open competition suggests a healthy market for these pharmaceutical preparations.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces and ensures the government receives competitive offers, maximizing the value of taxpayer dollars.

Public Impact

The primary beneficiaries are likely the Strategic National Stockpile (SNS) and the broader public health system, ensuring availability of critical pharmaceutical products. The services delivered involve the manufacturing and provision of specific pharmaceutical preparations. The geographic impact is national, supporting the SNS which is a U.S. resource. Workforce implications may include jobs in pharmaceutical manufacturing and logistics related to fulfilling this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw materials impacting long-term cost-effectiveness.
Dependence on a single supplier for critical pharmaceutical preparations could pose supply chain risks.
Ensuring timely delivery and quality control for a large volume of pharmaceutical products.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm Fixed Price contract provides cost certainty.
Contractor is a reputable pharmaceutical company with established manufacturing capabilities.
Supports the critical mission of the Strategic National Stockpile.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a vital part of the healthcare industry, focused on producing essential medicines and medical supplies. This contract fits within the broader context of government efforts to ensure national health security and preparedness by maintaining adequate supplies of critical pharmaceuticals. Spending in this sector is often driven by public health needs, emergency preparedness, and the development of new treatments. Comparable spending benchmarks would depend on the specific types and quantities of pharmaceutical preparations procured.

Small Business Impact

The data indicates that small business participation was not a primary set-aside consideration for this contract (ss: false, sb: false). While Genentech USA, Inc. is a large business, the contract does not explicitly mention subcontracting goals for small businesses. Further analysis would be needed to determine if subcontracting opportunities exist within the performance of this contract and how they might impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified pharmaceutical preparations. Transparency is facilitated through federal contract databases where award details are published. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Strategic National Stockpile (SNS)
Assistant Secretary for Preparedness and Response (ASPR) Contracts
Pharmaceutical Manufacturing Contracts
Department of Health and Human Services Procurement

Risk Flags

Supply Chain Vulnerability
Product Shelf-Life Management
Quality Control Assurance

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $60.0 million to GENENTECH USA, INC. THE PURPOSE AND NEED FOR THIS PROPOSED REQUIREMENT IS TO PROVIDE THE DIVISION OF STRATEGIC NATIONAL STOCKPILE (DSNS), ASSISTANT SECRETARY OF PREPAREDNESS AND RESPONSE (ASPR), WITH A CONTRACTING VEHICLE FOR PRODUCT(S) NEEDED IN ORDER TO SUPPORT "

Who is the contractor on this award?

The obligated recipient is GENENTECH USA, 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 $60.0 million.

What is the period of performance?

Start: 2022-09-14. End: 2025-03-31.

What is the specific nature of the 'pharmaceutical preparations' being procured under this contract?

The provided data does not specify the exact nature of the 'pharmaceutical preparations.' The contract's purpose is broadly stated as providing 'product(s) needed in order to support "'. This suggests the preparations could range from vaccines, therapeutics, antidotes, or other critical medical supplies essential for public health emergencies or strategic stockpiling. A more detailed review of the contract's Statement of Work (SOW) or Performance Work Statement (PWS) would be necessary to identify the precise pharmaceutical products and their intended use within the Division of Strategic National Stockpile (DSNS).

How does the $60 million contract value compare to historical spending on similar pharmaceutical preparations by HHS?

Without specific details on the 'pharmaceutical preparations,' a direct historical spending comparison is difficult. However, the $60 million award over approximately 2.5 years represents a significant investment in maintaining the Strategic National Stockpile. HHS, through ASPR, regularly procures a wide array of medical supplies and pharmaceuticals to ensure national preparedness. Historical data on similar large-scale procurements for emergency use medications or stockpiled biologics would be needed to benchmark this contract's value effectively. Factors such as quantity, shelf-life, and complexity of manufacturing heavily influence pricing in this sector.

What are the key performance indicators (KPIs) and quality assurance measures for this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or quality assurance measures for this contract. However, for pharmaceutical preparations, especially those destined for the Strategic National Stockpile, stringent quality control and performance standards are typically mandated. These would likely include adherence to Good Manufacturing Practices (GMP), precise delivery schedules, product efficacy and stability testing, and robust documentation. The firm-fixed-price nature of the contract implies that the contractor is responsible for meeting all specified performance requirements to receive payment.

What is Genentech USA, Inc.'s track record with HHS and the Strategic National Stockpile?

Genentech USA, Inc. is a well-established biotechnology company with a significant presence in the pharmaceutical industry. While the provided data confirms them as the awardee, their specific track record with HHS and the Strategic National Stockpile (SNS) is not detailed. A comprehensive review of past contracts, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any prior involvement in supplying the SNS would be necessary to fully assess their experience and reliability for this particular requirement. Their general reputation in the pharmaceutical sector suggests a capacity for high-quality production.

What are the potential risks associated with this contract, and how are they being mitigated?

Potential risks include supply chain disruptions for raw materials, manufacturing delays, product quality issues, and the potential for obsolescence of pharmaceutical preparations over time. Mitigation strategies likely involve the firm-fixed-price structure, which incentivizes the contractor to manage costs and timelines effectively. Furthermore, the contract's duration and the nature of the Strategic National Stockpile imply rigorous quality assurance protocols and potentially contingency planning by HHS/ASPR to ensure product availability and efficacy. The full and open competition may also mitigate risks by ensuring multiple potential suppliers exist.

Industry Classification

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

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Roche Holding AG

Address: 1 DNA WAY, SOUTH SAN FRANCISCO, CA, 94080

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

Financial Breakdown

Contract Ceiling: $60,000,000

Exercised Options: $60,000,000

Current Obligation: $60,000,000

Actual Outlays: $60,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: V797D60724

IDV Type: FSS

Timeline