NIH awards $35.5M contract for pharmaceuticals, highlighting a need for specialized preparation manufacturing

Contract Overview

Contract Amount: $35,550,000 ($35.5M)

Contractor: DLA Troop Support

Awarding Agency: Department of Health and Human Services

Start Date: 2023-05-04

End Date: 2023-09-30

Contract Duration: 149 days

Daily Burn Rate: $238.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACEUTICALS AND RELATED SUPPLIES FOR THE NIH CLINICAL CENTER (CC), PHARMACY DEPARTMENT.

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19111

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $35.5 million to DLA TROOP SUPPORT for work described as: PHARMACEUTICALS AND RELATED SUPPLIES FOR THE NIH CLINICAL CENTER (CC), PHARMACY DEPARTMENT. Key points: 1. The contract value of $35.5 million indicates a significant investment in pharmaceutical supplies for the NIH Clinical Center. 2. Full and open competition suggests a robust market for these specialized pharmaceutical preparations. 3. The relatively short duration of 149 days may point to immediate or urgent needs for these supplies. 4. The contract's focus on pharmaceutical preparation manufacturing aligns with the NIH's research and clinical support functions. 5. The award to a single contractor, despite open competition, warrants further investigation into market dynamics or contractor capabilities.

Value Assessment

Rating: good

The contract value of $35.5 million for a 149-day period appears substantial, suggesting a high demand for these specific pharmaceutical preparations. Benchmarking against similar contracts for specialized pharmaceutical manufacturing is challenging without more granular data on the exact types of preparations. However, the firm fixed-price structure provides cost certainty for the government. The awarded amount is within a reasonable range for such specialized services, considering the critical nature of NIH's clinical research.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. The fact that it resulted in a definitive contract awarded to one entity suggests that either one offer was significantly superior, or the market, while open, may have limited participants with the specific capabilities required for pharmaceutical preparation manufacturing at this scale and complexity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not limited to a single source, potentially leading to better value and a wider range of options.

Public Impact

Patients and researchers at the NIH Clinical Center will benefit from the timely availability of necessary pharmaceuticals for ongoing studies and treatments. The contract supports the critical functions of the NIH Pharmacy Department in preparing and dispensing medications. The geographic impact is primarily focused on the NIH facilities, ensuring a reliable supply chain for their operations. This contract supports jobs within the pharmaceutical preparation manufacturing sector, contributing to the specialized workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited contractor pool despite open competition, raising questions about long-term market health.
Short contract duration might indicate a reactive procurement rather than strategic long-term planning.
Lack of specific details on the pharmaceutical preparations makes it difficult to assess true value for money.

Positive Signals

Awarded under full and open competition, suggesting a fair and transparent process.
Firm fixed-price contract provides cost predictability for the government.
Supports a critical function for a leading medical research institution.

Sector Analysis

The pharmaceutical preparation manufacturing sector is highly specialized, requiring stringent quality control and regulatory compliance. This contract fits within the broader healthcare and life sciences sector, where government agencies like NIH are significant consumers of specialized pharmaceutical products for research and clinical trials. The market size for such niche manufacturing can be substantial, driven by the needs of research institutions, hospitals, and pharmaceutical companies.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as it was not set aside for small businesses and there is no explicit mention of subcontracting goals. This suggests that the specialized nature of pharmaceutical preparation manufacturing may favor larger, more established firms with the necessary infrastructure and certifications. Further analysis would be needed to determine if opportunities exist for small businesses in the supply chain or related support services.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature provides a degree of financial oversight. Transparency is facilitated by the public nature of contract awards. Accountability would be managed through contract performance clauses and potentially through the NIH's internal oversight mechanisms and the Government Accountability Office (GAO) if disputes arise.

Related Government Programs

NIH Clinical Center Pharmacy Operations
Pharmaceutical Manufacturing Contracts
Medical Supplies Procurement
Federal Research Support Contracts

Risk Flags

Short contract duration may limit long-term planning and create transition risks.
Lack of specific product details hinders comprehensive value assessment.
Single award despite open competition warrants scrutiny of market dynamics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $35.5 million to DLA TROOP SUPPORT. PHARMACEUTICALS AND RELATED SUPPLIES FOR THE NIH CLINICAL CENTER (CC), PHARMACY DEPARTMENT.

Who is the contractor on this award?

The obligated recipient is DLA TROOP SUPPORT.

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 $35.5 million.

What is the period of performance?

Start: 2023-05-04. End: 2023-09-30.

What is the specific breakdown of pharmaceutical preparations covered by this contract and their intended use within the NIH Clinical Center?

The provided data does not specify the exact breakdown of pharmaceutical preparations. The contract is broadly categorized under 'Pharmaceutical Preparation Manufacturing' (NAICS 325412) for the NIH Clinical Center's Pharmacy Department. These preparations are likely custom-compounded medications, sterile injectables, or specialized formulations required for ongoing clinical trials and patient treatment protocols at the NIH. The exact use would depend on the specific research protocols and patient needs managed by the Clinical Center's pharmacy, ranging from oncology drugs to rare disease treatments. Further details would typically be found in the contract's statement of work.

How does the awarded amount of $35.5 million compare to historical spending on similar pharmaceutical preparation contracts by the NIH or other federal agencies?

Without specific historical data for this exact category of pharmaceutical preparation manufacturing, a direct comparison is difficult. However, $35.5 million for a 149-day contract suggests a high per-diem cost, which is not unusual for highly specialized, short-term pharmaceutical needs, especially those tied to research. Federal agencies often procure pharmaceuticals through various mechanisms, including large-scale GSA schedules, direct contracts for specialized manufacturing, and group purchasing organizations. The NIH Clinical Center, being a leading research hospital, likely has unique and complex pharmaceutical needs that may command higher prices than standard bulk drug purchases. Benchmarking would require identifying contracts with similar scope, complexity, and duration.

What were the key evaluation criteria used in the full and open competition that led to this specific contractor being awarded the definitive contract?

The provided data does not detail the evaluation criteria for this specific contract. However, in a full and open competition for pharmaceutical preparation manufacturing, typical evaluation factors would include: technical capability (demonstrated expertise in sterile compounding, specific dosage forms, quality control), past performance (track record with similar contracts and clients, including government agencies), price (overall cost-effectiveness of the proposed solution), and adherence to regulatory requirements (FDA, cGMP). The definitive contract award suggests the selected contractor best met the combination of these criteria as outlined in the solicitation's request for proposal (RFP).

Are there any identified risks associated with the contractor's performance or the supply chain for these pharmaceuticals, given the short contract duration?

The short duration (149 days) itself presents a potential risk of supply chain disruption if the contractor faces unforeseen issues, as there is limited time to transition to an alternative source. Risks associated with the contractor's performance are not explicitly detailed in the provided data. However, standard risks in pharmaceutical manufacturing include quality control failures, production delays, and raw material shortages. Given the critical nature of NIH's work, any performance issues could directly impact research timelines and patient care. The firm fixed-price nature mitigates financial risk for the government but places performance risk squarely on the contractor.

What is the projected impact of this contract on the NIH's ability to conduct its clinical research and provide patient care over the contract period?

This contract is crucial for ensuring the uninterrupted supply of necessary pharmaceuticals for the NIH Clinical Center's operations during the specified period (May 4, 2023, to September 30, 2023). By securing these preparations, the contract directly supports ongoing clinical research protocols that rely on specific medications and ensures that patients receiving care at the CC have access to the required treatments. The timely delivery of these pharmaceuticals is essential for maintaining research momentum, adhering to study timelines, and providing continuity of care for patients, thereby underpinning the NIH's mission.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Government of the United States

Address: 700 ROBBINS AVENUE, PHILADELPHIA, PA, 19111

Business Categories: Category Business, Federally Funded Research and Development Corp, Government, U.S. Interstate Government Entity, U.S. National Government, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $35,550,000

Exercised Options: $35,550,000

Current Obligation: $35,550,000

Actual Outlays: $35,550,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline