HHS awards $17.4M contract for regulatory management services to PPD Development LP

Contract Overview

Contract Amount: $17,426,404 ($17.4M)

Contractor: PPD Development LP

Awarding Agency: Department of Health and Human Services

Start Date: 2021-11-01

End Date: 2026-10-31

Contract Duration: 1,825 days

Daily Burn Rate: $9.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: REGULATORY MANAGEMENT CENTER (RMC)

Place of Performance

Location: WILMINGTON, NEW HANOVER County, NORTH CAROLINA, 28401

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.4 million to PPD DEVELOPMENT LP for work described as: REGULATORY MANAGEMENT CENTER (RMC) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risk. 3. The duration of the contract is 5 years, indicating a long-term need for these services. 4. The National Institutes of Health (NIH) is the specific agency awarding the contract. 5. The North American Industry Classification System (NAICS) code 541714 points to research and development in biotechnology. 6. The contract value is substantial, reflecting significant investment in regulatory management.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more detailed cost breakdowns and comparisons to similar regulatory management services. The Cost Plus Fixed Fee structure means actual costs could exceed initial estimates, impacting overall value. Without specific performance metrics or deliverables, it's difficult to definitively assess value for money. However, the duration and scope suggest a significant need that the agency deemed worth this investment.

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 promotes price discovery and allows the government to select the best value offering. The open competition suggests a healthy market for these services.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the most advantageous offer available in the market.

Public Impact

The Department of Health and Human Services (HHS) benefits from enhanced regulatory management capabilities. The contract supports the National Institutes of Health (NIH) in its mission. Services delivered are crucial for managing regulatory processes within the biotechnology research sector. The impact is primarily within the federal government's administrative and research support functions. Workforce implications may include specialized roles in regulatory affairs and contract management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
The long duration of the contract may reduce flexibility if needs change.
Dependence on a single contractor for critical regulatory functions could pose a risk.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contract addresses a clear need for regulatory management within a key health research agency.
A fixed fee component in the contract type provides some level of cost predictability.

Sector Analysis

This contract falls within the Research and Development in Biotechnology sector, specifically focusing on regulatory management. This is a critical area for the pharmaceutical and biotech industries, ensuring compliance with federal regulations. The market for such services is specialized, involving firms with deep expertise in scientific and regulatory affairs. Comparable spending benchmarks would likely be found within other agencies requiring similar compliance and oversight functions, such as the FDA or EPA.

Small Business Impact

The data indicates that small business participation (ss and sb fields) was not a specific set-aside for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor, PPD Development LP, may engage small businesses as subcontractors, depending on the scope of work and their own subcontracting plans. Further analysis of subcontracting reports would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the National Institutes of Health. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting of costs and progress. Transparency is generally maintained through contract databases and public reporting, though specific performance details may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Biotechnology Research and Development Support
Federal Regulatory Compliance Services
Health and Human Services Contract Management
National Institutes of Health Procurement

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration may limit adaptability to evolving regulatory landscapes.
Potential for contractor performance degradation over the contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.4 million to PPD DEVELOPMENT LP. REGULATORY MANAGEMENT CENTER (RMC)

Who is the contractor on this award?

The obligated recipient is PPD DEVELOPMENT LP.

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 $17.4 million.

What is the period of performance?

Start: 2021-11-01. End: 2026-10-31.

What is the track record of PPD Development LP with federal contracts, particularly with HHS or NIH?

PPD Development LP, now part of Thermo Fisher Scientific, has a significant history of federal contracting. While specific details for this exact contract (awarded in 2021) require deeper database dives, the company has historically been involved in clinical research services, drug development support, and related areas for various government agencies, including HHS and NIH. Their track record generally indicates experience in complex scientific and regulatory projects. A thorough review would involve examining past performance evaluations, any past performance issues, and the types of services previously rendered to ensure alignment with the current contract's requirements and to assess their capability to deliver effectively.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar R&D regulatory services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is well-defined but the exact costs are uncertain, common in R&D. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change, but carries a higher risk of cost overrun. Compared to Cost Plus Incentive Fee (CPIF), CPFF lacks direct financial incentives for the contractor to control costs beyond the initial agreement. For R&D regulatory services, CPFF can be appropriate if innovation and adaptability are key, but requires robust government oversight to manage costs effectively.

What are the key performance indicators (KPIs) typically associated with regulatory management contracts in biotechnology?

Key performance indicators (KPIs) for regulatory management contracts in biotechnology often revolve around timeliness, accuracy, and compliance. Examples include the percentage of regulatory submissions completed on time, the number of regulatory deficiencies or rejections, adherence to specific regulatory guidelines (e.g., FDA, EMA), turnaround time for responding to agency inquiries, and successful navigation of regulatory approval processes. For this specific contract, KPIs would likely be tailored to the 'Regulatory Management Center (RMC)' functions, potentially measuring efficiency in processing applications, maintaining compliance databases, and supporting policy development. Effective KPIs ensure the contractor meets the government's objectives for regulatory oversight and efficiency.

What is the historical spending trend for similar regulatory management services at NIH or HHS?

Analyzing historical spending trends for similar regulatory management services at NIH or HHS requires access to detailed procurement data over multiple fiscal years. Generally, spending in this area tends to be relatively stable, reflecting ongoing needs for regulatory compliance and oversight in the life sciences. However, fluctuations can occur based on new legislative mandates, shifts in research priorities, or the initiation of large-scale projects requiring extensive regulatory support. A comprehensive trend analysis would involve aggregating spending on NAICS codes like 541714 (Biotechnology R&D) and related service codes, looking for patterns in contract awards, values, and durations to understand the agency's long-term investment in this function.

What are the potential risks associated with relying on a single contractor for a 5-year regulatory management contract?

Relying on a single contractor for a 5-year regulatory management contract presents several potential risks. Firstly, there's a risk of contractor complacency or reduced performance over time due to a lack of ongoing competitive pressure. Secondly, if the contractor experiences financial instability or significant operational issues, it could disrupt critical regulatory functions. Thirdly, the government might become locked into specific processes or technologies employed by the contractor, making it difficult and costly to adapt to new requirements or switch providers if needed. Finally, there's the risk of knowledge loss if key personnel leave the contractor's employ. Mitigating these risks often involves strong contract management, performance monitoring, and clear clauses for addressing deficiencies or changes in circumstances.

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: 75N93020R00015

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 929 N FRONT ST, WILMINGTON, NC, 28401

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

Financial Breakdown

Contract Ceiling: $29,120,381

Exercised Options: $17,426,404

Current Obligation: $17,426,404

Actual Outlays: $14,749,576

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline