NIH awards $40.1M contract for autoimmune disease research to RHO Federal Systems Division Inc

Contract Overview

Contract Amount: $40,128,916 ($40.1M)

Contractor: RHO Federal Systems Division Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-02-01

End Date: 2027-01-31

Contract Duration: 1,825 days

Daily Burn Rate: $22.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: AUTOIMMUNE DISEASES STATISTICAL AND CLINICAL COORDINATING CENTER (ADSCCC)

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27713

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $40.1 million to RHO FEDERAL SYSTEMS DIVISION INC for work described as: AUTOIMMUNE DISEASES STATISTICAL AND CLINICAL COORDINATING CENTER (ADSCCC) 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 risk if costs escalate. 3. The duration of 1825 days (5 years) indicates a long-term commitment to this research area. 4. The North American Industry Classification System (NAICS) code 541714 points to specialized biotechnology research. 5. The contract is managed by the National Institutes of Health (NIH), a leading biomedical research agency. 6. The award value of $40.1M is substantial, reflecting the complexity and importance of autoimmune disease research.

Value Assessment

Rating: fair

The contract value of $40.1M over five years averages approximately $8M annually. Benchmarking this against similar large-scale biomedical research contracts managed by NIH is difficult without more specific details on the scope of work. The Cost Plus Fixed Fee (CPFF) contract type means the government reimburses the contractor for allowable costs plus a fixed fee, which can be efficient if costs are well-managed. However, it lacks the cost certainty of a fixed-price contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. With two bids received, the level of competition appears moderate. While competition is generally beneficial for price discovery and innovation, a low number of bidders could suggest barriers to entry or a highly specialized market.

Taxpayer Impact: A competitive bidding process, even with two bidders, is generally favorable for taxpayers as it encourages contractors to offer competitive pricing and terms to secure the award.

Public Impact

This contract directly supports advancements in understanding and treating autoimmune diseases, potentially benefiting millions of patients. The research conducted will contribute to the scientific knowledge base managed by the NIH. The contract is geographically focused on North Carolina, where RHO Federal Systems Division Inc. is located. The contract is expected to support specialized scientific and research personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not closely monitored.
A limited number of bidders (two) may indicate a lack of robust competition, potentially impacting price.
The specific deliverables and performance metrics are not detailed, making it hard to assess value for money upfront.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential bidders.
The contract is with a known entity (RHO Federal Systems Division Inc.) for a critical research area.
The long-term nature of the contract suggests a sustained commitment to addressing autoimmune diseases.

Sector Analysis

This contract falls within the Biotechnology (except Nanobiotechnology) sector, a rapidly evolving field focused on using biological systems and organisms to develop or make products. The federal government, particularly through agencies like NIH, is a significant funder of R&D in this area. Comparable spending benchmarks are difficult to establish without knowing the specific research objectives, but large-scale R&D contracts in biotechnology can range from tens to hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation (ss and sb fields) is false, meaning this contract was not set aside for small businesses and there is no explicit indication of small business subcontracting goals. This suggests the primary awardee is likely a large business, and opportunities for small businesses would depend on their subcontracting plans, which are not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Institutes of Health (NIH), likely through its program officials and contracting officers. The contract's Cost Plus Fixed Fee structure necessitates diligent monitoring of costs and performance to ensure value for money. Transparency would be enhanced through public reporting of contract awards and potentially through research publications stemming from the work.

Related Government Programs

National Institutes of Health Research Grants
Biotechnology Research and Development Programs
Autoimmune Disease Research Initiatives
Federal Biomedical Research Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to prevent cost overruns.
Limited competition (2 bidders) may impact price discovery and potentially lead to higher costs.
Long-term contract duration increases exposure to potential changes in research direction or technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $40.1 million to RHO FEDERAL SYSTEMS DIVISION INC. AUTOIMMUNE DISEASES STATISTICAL AND CLINICAL COORDINATING CENTER (ADSCCC)

Who is the contractor on this award?

The obligated recipient is RHO FEDERAL SYSTEMS DIVISION 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 $40.1 million.

What is the period of performance?

Start: 2022-02-01. End: 2027-01-31.

What is the track record of RHO Federal Systems Division Inc. in managing large federal research contracts, particularly those with a Cost Plus Fixed Fee structure?

Assessing the track record of RHO Federal Systems Division Inc. requires a review of their past performance on federal contracts. Specifically, examining previous Cost Plus Fixed Fee (CPFF) awards would reveal their ability to manage costs effectively, adhere to timelines, and meet performance objectives. Data on contract close-outs, any incurred cost adjustments, and customer satisfaction ratings (if available through sources like the Contractor Performance Assessment Reporting System - CPARS) would provide crucial insights. Without specific historical data on RHO Federal Systems Division Inc.'s performance on similar contracts, it is difficult to definitively assess their capability in managing this $40.1M autoimmune disease research project. However, the fact that they were awarded this contract suggests they met the government's minimum requirements for responsibility and past performance.

How does the $40.1M award value compare to other NIH contracts for autoimmune disease research over the past five years?

To benchmark the $40.1M award value, a comparative analysis of recent NIH contracts for autoimmune disease research is necessary. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for contracts with similar objectives, NAICS codes (e.g., 541714), and keywords related to autoimmune diseases awarded by NIH or its constituent institutes (like NIAID, NIAMS) within the last five years. The analysis should consider contract types (e.g., CPFF, FFP), durations, and total awarded amounts. If the $40.1M falls within the typical range for large-scale, multi-year research efforts in this specialized area, it suggests fair market value. Conversely, if it appears significantly higher or lower than comparable awards, it may warrant further investigation into the scope of work and specific research goals.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for a long-term R&D project like this?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for a long-term R&D project revolve around cost control and potential scope creep. For the government, the main risk is that the contractor may not have sufficient incentive to control costs rigorously, as all allowable expenses are reimbursed, plus a fixed fee. This can lead to the total project cost exceeding initial estimates if not managed diligently. Scope creep is another significant risk; as research progresses, new avenues may emerge, leading to requests for changes in the scope of work. If not managed through formal contract modifications, this can inflate costs and extend timelines beyond the original intent. For the contractor, the risk lies in accurately estimating the fixed fee to cover their overhead and profit while remaining competitive, and ensuring all incurred costs are deemed allowable by the government.

What specific performance metrics or deliverables are expected under this contract to ensure accountability and measure success?

The provided data does not specify the performance metrics or deliverables for this contract. Typically, for a research and development contract of this nature, deliverables would include periodic progress reports, interim research findings, final research reports, data sets, potentially prototypes or methodologies, and publications in peer-reviewed journals. Performance metrics would likely focus on the timely achievement of research milestones, the quality and validity of the scientific findings, adherence to ethical research standards, and effective management of resources. Accountability is usually ensured through contract clauses requiring regular reporting and review by the contracting officer's representative (COR) or program manager, who assesses progress against the statement of work and established milestones.

How has federal spending on autoimmune disease research evolved over the past decade, and where does this contract fit within that trend?

Federal spending on autoimmune disease research has generally trended upwards over the past decade, driven by increasing understanding of disease mechanisms, the growing prevalence of autoimmune conditions, and advancements in research technologies. Agencies like the National Institutes of Health (NIH) are the primary drivers of this spending through grants and contracts. This $40.1M contract represents a significant, albeit single, investment within that broader trend. It signifies a continued commitment by the NIH to fund critical research in this area. To place it precisely within the trend, one would need to analyze aggregate federal R&D spending specifically allocated to autoimmune diseases over multiple years and compare this contract's value as a proportion of that total.

What is the potential impact of this contract on the broader biotechnology R&D sector, particularly concerning innovation and market development?

This contract has the potential to significantly impact the biotechnology R&D sector by fostering innovation in autoimmune disease research. Funding from federal agencies like NIH often supports foundational research that can lead to breakthroughs not typically pursued by private industry due to high risk or long timelines. The insights gained could pave the way for new diagnostic tools, therapeutic targets, and treatment strategies. Furthermore, the contract's success could stimulate further investment in companies and research institutions focused on autoimmune diseases. It may also encourage collaboration between academic researchers and industry partners, accelerating the translation of scientific discoveries into marketable products and services, thereby contributing to market development in the specialized field of immunology and biotechnology.

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: 75N93020R00012

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2635 E NC HIGHWAY 54, DURHAM, NC, 27713

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

Financial Breakdown

Contract Ceiling: $40,128,916

Exercised Options: $40,128,916

Current Obligation: $40,128,916

Actual Outlays: $29,227,534

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline