NIH awards $51.2M contract for in-vitro diagnostic substance manufacturing to Roche Diagnostics Corp

Contract Overview

Contract Amount: $51,167 ($51.2K)

Contractor: Roche Diagnostics Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2018-07-17

End Date: 2022-07-16

Contract Duration: 1,460 days

Daily Burn Rate: $35/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ROCHE DIAGNOSTICS CORP:1106277 [18-011404]

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $51,166.7 to ROCHE DIAGNOSTICS CORPORATION for work described as: ROCHE DIAGNOSTICS CORP:1106277 [18-011404] Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1460 days (4 years) indicates a long-term need for these substances. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. The awardee, Roche Diagnostics Corporation, is a significant player in the diagnostics market. 5. The contract falls under the National Institutes of Health's procurement activities, supporting medical research. 6. The specific product service code (PSC) is not provided, limiting detailed analysis of the goods/services. 7. The contract value is substantial, reflecting the importance of diagnostic substances in research.

Value Assessment

Rating: good

The contract value of $51.2 million over four years for in-vitro diagnostic substances appears reasonable given the supplier's market position and the nature of specialized medical supplies. Benchmarking against similar long-term supply agreements for diagnostic reagents would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests an effort to control costs. Without specific unit pricing or detailed product specifications, a definitive comparison to market rates is challenging, but the award to a known entity in the field implies a degree of expected quality and reliability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified in the provided data, which is crucial for a complete understanding of the competition dynamics. However, the designation implies that the government sought the best possible offer through a broad solicitation process, which generally promotes price discovery and encourages competitive pricing.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it increases the likelihood of obtaining goods and services at competitive prices by allowing a wide range of potential suppliers to bid.

Public Impact

The primary beneficiaries are researchers and scientists within the National Institutes of Health (NIH) who rely on these diagnostic substances for their studies. The services delivered involve the manufacturing and supply of critical in-vitro diagnostic substances essential for various medical and biological research applications. The geographic impact is primarily focused on NIH facilities, likely located in Maryland (ST: MD, SN: MARYLAND), where the research and development activities take place. The contract supports the workforce within Roche Diagnostics Corporation and potentially its suppliers, contributing to employment in the biotechnology and manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific unit pricing makes it difficult to assess cost-effectiveness over the contract's lifespan.
Limited information on the number of bidders restricts a full assessment of competitive pressure.
The provided data does not detail the specific types of diagnostic substances, hindering a granular analysis of their necessity and market alternatives.
The contract's duration could lead to potential price increases if market conditions change significantly over the four years, despite the fixed-price nature.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type provides budget certainty for the government.
Awardee is a reputable company in the diagnostics field, implying quality and reliability.
Contract supports critical research activities at the NIH, a leading medical research institution.

Sector Analysis

The contract falls within the broader healthcare and life sciences sector, specifically focusing on the manufacturing of diagnostic substances. This is a critical sub-sector that supports medical research, clinical diagnostics, and pharmaceutical development. The market for in-vitro diagnostics is substantial and growing, driven by advancements in personalized medicine, disease detection, and an aging global population. Roche Diagnostics Corporation is a major global player in this market, competing with other large diagnostic companies. This contract represents a significant procurement within the federal government's support for biomedical research.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary awardee is a large corporation, and any subcontracting would likely be at the discretion of Roche Diagnostics Corporation, potentially involving specialized suppliers within their supply chain. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were not prioritized.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the National Institutes of Health (NIH). As a delivery order under a larger contract vehicle (implied by '18-011404'), oversight might also involve the administration of the base contract. Transparency is facilitated by public contract databases, but detailed performance metrics and specific oversight activities are not publicly disclosed. The Department of Health and Human Services (HHS) Office of Inspector General (OIG) would have jurisdiction for audits and investigations if any concerns regarding fraud, waste, or abuse arise.

Related Government Programs

NIH Research and Development Contracts
Medical Supplies and Equipment Procurement
Biotechnology and Life Sciences Research Support
Federal Health IT and Data Services

Risk Flags

Potential for supply chain disruptions
Quality control risks for manufactured substances
Risk of technological obsolescence
Limited transparency on number of bidders
Price fluctuations in raw materials impacting long-term costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $51,166.7 to ROCHE DIAGNOSTICS CORPORATION. ROCHE DIAGNOSTICS CORP:1106277 [18-011404]

Who is the contractor on this award?

The obligated recipient is ROCHE DIAGNOSTICS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $51,166.7.

What is the period of performance?

Start: 2018-07-17. End: 2022-07-16.

What is the track record of Roche Diagnostics Corporation in fulfilling government contracts, particularly for similar diagnostic substances?

Roche Diagnostics Corporation is a well-established global leader in the in-vitro diagnostics market. While specific details on their historical performance for this exact type of federal contract are not provided in the summary data, the company's extensive experience and market presence suggest a strong capability to deliver complex diagnostic products. Government contract databases often contain performance ratings and past performance information, which would be necessary for a comprehensive assessment. However, their consistent presence and significant market share in the healthcare sector indicate a general capacity to meet the demands of large-scale supply contracts. Further investigation into their specific federal contract history, including any past issues or commendations, would be required for a definitive evaluation.

How does the awarded amount of $51.2 million compare to similar federal contracts for in-vitro diagnostic substances?

Comparing the $51.2 million contract value requires access to a broader dataset of similar federal procurements. However, given that this contract spans four years (1460 days) and is for manufacturing specialized diagnostic substances for a major research institution like the NIH, the annual value of approximately $12.8 million appears to be within a reasonable range for such specialized supplies. Large-scale research initiatives often require significant quantities of high-quality reagents and substances. Benchmarking against contracts awarded by other federal agencies (e.g., CDC, VA) or even large academic institutions for comparable materials would provide a more precise comparison. Without such comparative data, it's difficult to definitively state if this represents exceptional value or is on the higher end.

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

Key risks include potential supply chain disruptions for raw materials, quality control issues with the manufactured substances, and the possibility of technological obsolescence if research needs evolve rapidly. Mitigation strategies likely involve robust quality assurance protocols by Roche Diagnostics, contingency planning for supply chain resilience, and clear performance standards outlined in the contract. The firm-fixed-price nature of the contract also mitigates financial risk for the government by capping costs. Furthermore, the NIH's oversight and the potential for contract modifications or termination for default provide further layers of risk management. The long-term nature of the contract also presents a risk of price escalation if market conditions change, though the fixed-price structure aims to prevent this.

How effective is the 'full and open competition' process in ensuring the best value for taxpayers in this specific contract?

The 'full and open competition' process is designed to maximize value for taxpayers by encouraging a wide range of qualified vendors to bid, thereby fostering price competition and innovation. For this contract, its effectiveness hinges on the number of bids received and the quality of proposals submitted. If multiple capable companies competed vigorously, it likely resulted in a competitive price and a high-quality product. However, the provided data does not specify the number of bidders, which is a critical factor. If only a few bids were received, or if the market for these specific substances is limited, the competitive pressure might have been less intense. Nonetheless, the process itself provides a structured framework for achieving value.

What are the historical spending patterns for in-vitro diagnostic substances at the NIH or similar agencies?

Historical spending patterns for in-vitro diagnostic substances at the NIH and similar agencies typically show consistent demand, reflecting the ongoing nature of biomedical research. Agencies like the NIH allocate substantial budgets to research supplies, including reagents and diagnostic substances, which are fundamental to experimental work. Spending can fluctuate based on specific research priorities, the scale of ongoing studies, and the introduction of new technologies or diagnostic methods. Analyzing past contract awards for similar items would reveal trends in contract values, durations, and the primary suppliers. This specific $51.2 million award over four years suggests a sustained and significant investment in this area, aligning with the NIH's mission.

What is the potential impact of this contract on the broader market for in-vitro diagnostic substances?

This contract, awarded to a major player like Roche Diagnostics, can influence the market by validating demand for specific types of diagnostic substances and potentially setting pricing benchmarks. It signals the federal government's commitment to supporting research that relies on these materials. For other suppliers, it highlights the importance of the federal sector as a customer. Depending on the scale and specificity of the substances, it could also drive innovation or encourage investment in manufacturing capabilities. However, as Roche is a large, established entity, the impact might be more about reinforcing existing market dynamics rather than fundamentally shifting them, unless the contract specifies novel or highly specialized requirements.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

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

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: 9115 HAGUE RD, INDIANAPOLIS, IN, 46256

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: $51,167

Exercised Options: $51,167

Current Obligation: $51,167

Actual Outlays: $19,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797P5279B

IDV Type: FSS

Timeline