NIH Awards $20.5M to Crestone for CRS0540 Compound Development
Contract Overview
Contract Amount: $20,477,990 ($20.5M)
Contractor: Crestone, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2020-07-01
End Date: 2026-08-19
Contract Duration: 2,240 days
Daily Burn Rate: $9.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 12
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: TO ADVANCE A PROMISING, SMALL-MOLECULE COMPOUND CRS0540 TO IND FILING AND THROUGH PHASE I CLINICAL STUDIES.
Place of Performance
Location: BOULDER, BOULDER County, COLORADO, 80301
State: Colorado Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $20.5 million to CRESTONE, INC. for work described as: TO ADVANCE A PROMISING, SMALL-MOLECULE COMPOUND CRS0540 TO IND FILING AND THROUGH PHASE I CLINICAL STUDIES. Key points: 1. Focus on advancing a small-molecule compound (CRS0540) through Phase I clinical studies. 2. Contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 3. Competition was full and open, suggesting a competitive bidding process. 4. Small business status is not applicable for this award.
Value Assessment
Rating: fair
The award amount of $20.5M for a Phase I clinical study is within a reasonable range for drug development. However, the Cost Plus Fixed Fee structure requires careful monitoring to ensure costs do not escalate beyond initial projections.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better price discovery and value for the government. The fixed fee component provides some cost control, but the cost-plus nature still carries inherent risk.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for research funding. However, the Cost Plus Fixed Fee structure necessitates robust oversight to prevent unnecessary expenditures.
Public Impact
Potential for a new therapeutic compound to reach clinical trials. Funding supports early-stage drug development, a high-risk, high-reward area. NIH's investment in novel research contributes to public health advancements. The success of CRS0540 could lead to future treatments for specific diseases.
Waste & Efficiency Indicators
Waste Risk Score: 91 / 10
Warning Flags
- Cost Plus Fixed Fee structure can lead to cost overruns.
- Long contract duration (2240 days) increases exposure to changing market conditions.
- No small business participation noted.
Positive Signals
- Full and open competition ensures a competitive bidding process.
- Focus on a promising small-molecule compound.
- Clear objectives for IND filing and Phase I studies.
Sector Analysis
This award falls under Research and Development in the Physical, Engineering, and Life Sciences sector. Spending in this area is crucial for innovation but often involves high uncertainty and long development timelines, making cost management and oversight critical.
Small Business Impact
The data indicates that this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were excluded or if the nature of the work did not lend itself to small business participation.
Oversight & Accountability
The Cost Plus Fixed Fee contract type requires diligent oversight from the National Institutes of Health to ensure that costs are reasonable and allocable, and that the fixed fee is justified. Regular reviews of progress and expenditures are essential for accountability.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Health and Human Services Contracting
- National Institutes of Health Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Long contract duration.
- No small business participation.
- High inherent risk in early-stage drug development.
Tags
research-and-development-in-the-physical, department-of-health-and-human-services, co, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $20.5 million to CRESTONE, INC.. TO ADVANCE A PROMISING, SMALL-MOLECULE COMPOUND CRS0540 TO IND FILING AND THROUGH PHASE I CLINICAL STUDIES.
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 $20.5 million.
What is the period of performance?
Start: 2020-07-01. End: 2026-08-19.
What is the projected cost per milestone for advancing CRS0540 to IND filing and through Phase I clinical studies?
The contract does not explicitly break down costs per milestone. The total award is $20.5M, with a fixed fee component. Detailed financial reporting and progress tracking by NIH will be crucial to assess cost-effectiveness at each stage of development, from IND filing to the completion of Phase I studies.
What are the primary risks associated with the Cost Plus Fixed Fee structure in this contract, and how are they being mitigated?
The primary risk is that the 'cost plus' element could incentivize higher spending, potentially exceeding the anticipated budget, even with a fixed fee. Mitigation relies on robust NIH oversight, including regular audits, performance reviews, and strict adherence to the contract's cost principles to ensure all expenditures are necessary and reasonable.
How effective is the full and open competition in ensuring value for money for this specific R&D contract?
Full and open competition is generally effective in driving value by allowing multiple qualified entities to bid, fostering a competitive environment. For this R&D contract, it likely ensured that Crestone, Inc. was selected based on its capabilities and proposed approach at a competitive price point, maximizing the government's return on investment for the research funding.
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: HHS-NIH-NIAID-BAA2019-1
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: $25,499,035
Exercised Options: $20,477,990
Current Obligation: $20,477,990
Actual Outlays: $15,277,934
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-07-01
Current End Date: 2026-08-19
Potential End Date: 2026-08-19 00:00:00
Last Modified: 2026-01-07
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