HHS awarded $349M to Sanofi Pasteur for vaccine production, raising questions about competition and value

Contract Overview

Contract Amount: $348,888,718 ($348.9M)

Contractor: Sanofi Pasteur Biologics, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2002-03-05

End Date: 2004-11-20

Contract Duration: 991 days

Daily Burn Rate: $352.1K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TAS::75 0140::TAS ACAMBIS, 200-2002-00004

Place of Performance

Location: TUCKER, DEKALB County, GEORGIA, 30084

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $348.9 million to SANOFI PASTEUR BIOLOGICS, LLC for work described as: TAS::75 0140::TAS ACAMBIS, 200-2002-00004 Key points: 1. The contract's value of $349 million represents a significant investment in vaccine manufacturing capabilities. 2. The non-competitive nature of this award warrants scrutiny regarding potential price inflation and limited market exploration. 3. Performance risks are moderate, given the critical nature of vaccine supply chains and the contractor's role. 4. This contract positions Sanofi Pasteur as a key player in the government's biodefense and public health preparedness efforts. 5. The fixed-price contract type aims to control costs, but the lack of competition may undermine this objective. 6. The duration of the contract, nearly two years, suggests a substantial and ongoing need for the services.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its non-competitive nature and the specific nature of vaccine production. Without comparable bids, it's difficult to definitively assess if the $349 million represents a fair market price. The fixed-price structure provides some cost control, but the absence of competition limits the government's ability to negotiate the best possible terms. Further analysis would require understanding the specific deliverables and market conditions for these vaccines.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that the government did not solicit bids from multiple sources. This approach is typically used when only one source can fulfill the requirement, or in urgent situations. The lack of a competitive bidding process means there were no other companies vying for this contract, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct price competition.

Public Impact

The primary beneficiaries are the public, through enhanced vaccine availability for public health initiatives. The services delivered likely involve the manufacturing and supply of specific vaccines critical for disease prevention. The geographic impact is national, ensuring a supply of essential medical countermeasures. This contract supports the biopharmaceutical industry workforce involved in vaccine production and quality control.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competitively awarded contract.
The sole-source nature limits transparency into the pricing structure and justification.
Potential for contractor lock-in, making future procurements difficult to compete.

Positive Signals

Ensures a critical supply of vaccines, contributing to national biodefense and public health.
The fixed-price contract type offers some cost predictability.
The contractor is a known entity in vaccine production, potentially reducing technical risk.

Sector Analysis

This contract falls within the broader healthcare and biopharmaceutical sector, specifically focusing on vaccine manufacturing. The market for government vaccine procurement is often influenced by national security, public health emergencies, and specific disease threats. Comparable spending benchmarks would involve looking at other large-scale vaccine production contracts awarded by agencies like HHS, DoD, or BARDA, though direct comparisons are difficult due to the specialized nature of vaccine development and production.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the specialized nature of vaccine manufacturing and the large dollar value, it is unlikely that small businesses were primary awardees. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services, likely managed by the Centers for Disease Control and Prevention (CDC). Accountability measures would be tied to the contract's performance clauses and delivery schedules. Transparency is limited by the non-competitive award, but contract modifications and performance reports would be subject to agency review and potentially Inspector General oversight.

Related Government Programs

Biodefense and Pandemic Preparedness Programs
Strategic National Stockpile
Vaccine Research and Development Contracts
Public Health Emergency Response

Risk Flags

Non-competitive award
Lack of price transparency
Potential for inflated costs
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $348.9 million to SANOFI PASTEUR BIOLOGICS, LLC. TAS::75 0140::TAS ACAMBIS, 200-2002-00004

Who is the contractor on this award?

The obligated recipient is SANOFI PASTEUR BIOLOGICS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $348.9 million.

What is the period of performance?

Start: 2002-03-05. End: 2004-11-20.

What specific vaccines or biological products was Sanofi Pasteur contracted to produce?

The provided data does not specify the exact vaccines or biological products covered under this contract. However, given the awarding agency (CDC) and the context of biodefense and public health, it is highly probable that the contract pertains to vaccines critical for national health security, such as those for emerging infectious diseases, bioterrorism agents, or pandemic influenza. Further investigation into the contract details or related public health initiatives would be necessary to identify the specific products.

What was the justification for awarding this contract on a non-competitive basis?

The data indicates this was a 'NON-COMPETITIVE DELIVERY ORDER.' Justifications for non-competitive awards typically include situations where only one responsible source can provide the required supplies or services, or when there is a compelling urgency that makes a competitive solicitation impractical. For vaccine production, this could stem from proprietary manufacturing processes, unique capabilities held by a single manufacturer, or urgent national security/public health needs where delays associated with competition are unacceptable. The specific justification would be documented within the contract file by the agency.

How does the $349 million award compare to typical government spending on vaccine production?

The $349 million award is substantial and falls within the range of large-scale government procurements for critical medical countermeasures. Government spending on vaccine production can vary significantly based on the type of vaccine, the quantity ordered, and whether it's for routine immunization programs, stockpiling for emergencies, or research and development. Contracts of this magnitude are often associated with pandemic preparedness or biodefense initiatives, where significant investment is required to ensure supply chain security and availability of essential vaccines. Without knowing the specific product, direct comparison is difficult, but it signifies a major commitment.

What are the potential risks associated with a sole-source contract for vaccine manufacturing?

Sole-source contracts for vaccine manufacturing carry several risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive process, meaning taxpayers may overpay. It also reduces transparency in pricing and cost justification. Furthermore, it can create a dependency on a single supplier, potentially limiting future flexibility and innovation. If the sole-source contractor experiences production issues or fails to meet delivery schedules, the government has limited alternative options, potentially jeopardizing public health or national security objectives.

What is Sanofi Pasteur Biologics, LLC's track record with government vaccine contracts?

Sanofi Pasteur Biologics, LLC (now Sanofi Pasteur Inc.) has a significant history of contracting with the U.S. government for vaccine production and supply. They are a major global vaccine manufacturer and have been a key supplier for various public health programs, including influenza vaccines, routine childhood immunizations, and potentially vaccines for emerging threats. Their track record generally involves large-scale manufacturing capabilities and experience navigating government procurement processes. Specific details on past performance, including any past issues or successes, would require a deeper dive into contract databases and performance reports.

What oversight mechanisms are in place for this type of contract?

Oversight for this contract would be managed by the contracting agency, in this case, the Department of Health and Human Services (HHS), specifically the Centers for Disease Control and Prevention (CDC). Oversight typically involves contract officers, technical monitors, and quality assurance specialists who ensure the contractor meets the terms and conditions of the contract, including delivery schedules, quality standards, and reporting requirements. For critical supplies like vaccines, there is often heightened oversight due to public health implications. The HHS Office of Inspector General (OIG) may also conduct audits or investigations related to contract performance and financial management.

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2002N00004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sanofi Pasteur Vaxdesign Corp (UEI: 739980787)

Address: 38 SIDNEY ST, CAMBRIDGE, MA, 02139

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

Financial Breakdown

Contract Ceiling: $348,888,718

Exercised Options: $348,888,718

Current Obligation: $348,888,718

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200200004I

IDV Type: IDC

Timeline