HHS awards $31.9M contract for biotechnology R&D, with 12 offers received

Contract Overview

Contract Amount: $31,943,633 ($31.9M)

Contractor: Crestone, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2019-09-09

End Date: 2026-05-31

Contract Duration: 2,456 days

Daily Burn Rate: $13.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TO MAKE AN AWARD UNDER HHS-NIH-NIAID-BAA2018

Place of Performance

Location: BOULDER, BOULDER County, COLORADO, 80301

State: Colorado Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.9 million to CRESTONE, INC. for work described as: TO MAKE AN AWARD UNDER HHS-NIH-NIAID-BAA2018 Key points: 1. Contract value of $31.9 million over its period of performance. 2. Full and open competition indicates a potentially robust bidding process. 3. Research and Development in Biotechnology (except Nanobiotechnology) is the primary focus. 4. The contract is a Cost Plus Fixed Fee type, common for R&D projects. 5. Performance period spans from September 2019 to May 2026. 6. Contractor is CRESTONE, INC., with a presence in Colorado. 7. No small business set-aside was utilized for this award.

Value Assessment

Rating: good

The contract value of $31.9 million for a period of nearly 7 years suggests a moderate annual spend for specialized biotechnology research. Benchmarking against similar R&D contracts would require more granular data on the specific research scope. However, the Cost Plus Fixed Fee structure is typical for research where exact costs are difficult to predict, aiming to balance contractor incentive with cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award was made under full and open competition, with 12 offers received. This high number of bidders suggests a competitive environment for this research and development requirement. A robust competition typically leads to better price discovery and potentially more innovative solutions, as contractors vie for the award.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down costs and encouraged a wider range of technical approaches to be considered.

Public Impact

Benefits the National Institutes of Health (NIH) in advancing biotechnology research. Supports research and development activities in the field of biotechnology. Geographic impact is primarily linked to the contractor's location in Colorado. Workforce implications include employment for researchers and support staff at CRESTONE, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed carefully.
The long performance period (nearly 7 years) requires sustained oversight to ensure continued alignment with research goals.

Positive Signals

Full and open competition with 12 offers indicates a healthy market and potential for value.
The contract is for a critical R&D area within the National Institutes of Health.
The contractor, CRESTONE, INC., is based in Colorado, potentially supporting regional economic activity.

Sector Analysis

This contract falls within the Research and Development in Biotechnology sector, a rapidly evolving field critical for medical advancements and scientific discovery. The market for biotechnology R&D services is substantial, with significant government investment driven by agencies like NIH. This specific contract likely supports NIAID's mission to conduct and support basic and applied research to develop better diagnostics, vaccines, and therapeutics.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The focus was on full and open competition, which may limit direct opportunities for small businesses unless they are prime contractors or subcontractors to larger entities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and specifically the National Institutes of Health (NIH). As a Cost Plus Fixed Fee contract, rigorous financial and programmatic oversight is crucial to monitor expenditures and ensure research milestones are met. Transparency would be facilitated through contract reporting mechanisms and potentially through public disclosures related to the research outcomes.

Related Government Programs

HHS Research and Development Contracts
NIH Biotechnology Research Grants
Biotechnology Research and Development Services
Cost-Reimbursement Research Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring.
Long contract duration necessitates sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.9 million to CRESTONE, INC.. TO MAKE AN AWARD UNDER HHS-NIH-NIAID-BAA2018

Who is the contractor on this award?

The obligated recipient is CRESTONE, INC..

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 $31.9 million.

What is the period of performance?

Start: 2019-09-09. End: 2026-05-31.

What is the track record of CRESTONE, INC. in performing similar federal research and development contracts?

Information regarding CRESTONE, INC.'s specific track record on federal R&D contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on prior government awards. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would be the primary sources for this information. Without this data, it's difficult to definitively assess their experience and reliability for this specific biotechnology R&D effort.

How does the $31.9 million contract value compare to other biotechnology R&D contracts awarded by NIH or other agencies?

The $31.9 million contract value over approximately 6.7 years represents an average annual spend of roughly $4.76 million. This figure is moderate for a significant R&D effort within biotechnology, especially for an agency like NIH which manages large research portfolios. Comparable contracts can vary widely based on scope, duration, and specific research focus (e.g., drug development vs. basic science). To provide a precise comparison, one would need to analyze the average value of similar NIAID or NIH contracts for biotechnology R&D, considering factors like the number of bidders and contract type. However, this value suggests a substantial, but not exceptionally large, investment in this research area.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for biotechnology R&D?

The primary risks associated with a CPFF contract for biotechnology R&D include potential cost overruns if the fixed fee becomes disproportionately small compared to the actual effort required, or if the contractor lacks sufficient incentive to control costs beyond achieving the fixed fee. For the government, there's a risk of paying more than necessary if the contractor's efficiency is low. For the contractor, the risk lies in underestimating the effort and having the fixed fee not adequately compensate them. Effective management and oversight are crucial to mitigate these risks by closely monitoring costs, progress, and ensuring the fixed fee remains fair and reasonable relative to the work performed and the contractor's performance.

How effective is the 'full and open competition' strategy in ensuring value for money in R&D contracts like this one?

Full and open competition is generally considered the most effective strategy for ensuring value for money in R&D contracts, as it allows the widest possible pool of qualified contractors to bid. The fact that 12 offers were received suggests a robust market response, increasing the likelihood that the government secured competitive pricing and innovative technical solutions. This broad competition helps drive down costs through market forces and allows the agency to select the offer that provides the best overall value, balancing technical merit, past performance, and price. However, the ultimate effectiveness also depends on the clarity of the solicitation and the rigor of the evaluation process.

What are the historical spending patterns for biotechnology R&D at HHS or NIH?

HHS, particularly through NIH, is a major funder of biotechnology R&D, with annual spending often in the tens of billions of dollars across various institutes and centers. NIAID, specifically, funds a significant amount of research related to infectious diseases, immunology, and related biotechnology. Historical spending patterns show a consistent and often increasing investment in this sector due to its critical role in public health and scientific advancement. This $31.9 million contract represents a small fraction of the overall NIH R&D budget but is indicative of the agency's ongoing commitment to advancing biotechnology through contract awards.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HHSNIHNIAIDBAA2018

Offers Received: 12

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6075 LONGBOW DR STE 130, BOULDER, CO, 80301

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,943,633

Exercised Options: $31,943,633

Current Obligation: $31,943,633

Actual Outlays: $21,372,755

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline