HHS awarded $18.6M for flu vaccines, highlighting a non-competitive delivery order for biological product manufacturing

Contract Overview

Contract Amount: $18,600,000 ($18.6M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2004-08-30

End Date: 2004-12-17

Contract Duration: 109 days

Daily Burn Rate: $170.6K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Healthcare

Official Description: FLU 2004

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $18.6 million to SANOFI VACCINES US INC. for work described as: FLU 2004 Key points: 1. The contract value of $18.6 million represents a significant investment in public health preparedness. 2. A non-competitive award suggests potential urgency or a lack of readily available alternatives at the time of procurement. 3. The fixed-price contract type aims to control costs and provide predictability for the government. 4. The short duration of 109 days indicates a specific, time-sensitive need for the biological product. 5. The award to Sanofi Vaccines US Inc. points to a reliance on established suppliers for critical health resources. 6. The contract falls under the Biological Product (except Diagnostic) Manufacturing NAICS code, indicating specialized industry involvement.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without comparable contract data for the same product and timeframe. However, $18.6 million for a large quantity of flu vaccines is within a plausible range for public health procurement. The fixed-price nature of the award suggests an attempt to manage costs, but the non-competitive aspect means a direct comparison to market rates achieved through competition is not possible.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that the agency likely identified a specific need that could not be met through a competitive bidding process. This could be due to urgency, a lack of available suppliers, or a pre-existing relationship. The absence of competition limits the government's ability to leverage market forces to achieve the lowest possible price.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the lack of competition. This type of award can sometimes lead to higher costs compared to fully competed contracts.

Public Impact

The primary beneficiaries are the public, who receive essential flu vaccinations to prevent widespread illness. The service delivered is the provision of biological products, specifically flu vaccines, crucial for seasonal health. The geographic impact is likely national, as the Centers for Disease Control and Prevention (CDC) procures vaccines for public health initiatives across the United States. The contract supports the pharmaceutical manufacturing sector and its workforce involved in vaccine production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award raises questions about potential price inflation and missed opportunities for cost savings through competition.
Limited duration may indicate a reactive procurement rather than strategic long-term planning, potentially leading to higher per-unit costs.
Reliance on a single supplier for critical health products could pose supply chain risks if that supplier faces production issues.

Positive Signals

Award to a known entity (Sanofi Vaccines) suggests a degree of confidence in their ability to deliver a critical public health product.
Fixed-price contract provides cost certainty for the government, mitigating risks associated with cost overruns.
The contract addresses a clear public health need, aligning with the agency's mission to protect population health.

Sector Analysis

The pharmaceutical and biotechnology sector is characterized by high research and development costs, stringent regulatory requirements, and significant market concentration among a few major players. Federal spending in this area often focuses on public health initiatives, defense medical readiness, and research grants. This contract for flu vaccines fits within the broader landscape of government procurement of essential medicines and biological products to ensure public health and national security.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to a large pharmaceutical company like Sanofi suggests that the primary focus was on securing a specific product rather than promoting small business participation. There is no explicit information on subcontracting opportunities for small businesses within this delivery order.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a delivery order under a larger contract vehicle, its execution would be monitored by the contracting officer and program managers. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Influenza Vaccine Procurement
Public Health Emergency Preparedness
Biological Product Manufacturing Contracts
Department of Health and Human Services Contracts
Centers for Disease Control and Prevention Acquisitions

Risk Flags

Non-competitive award
Potential for higher cost due to lack of competition
Supply chain risk associated with single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $18.6 million to SANOFI VACCINES US INC.. FLU 2004

Who is the contractor on this award?

The obligated recipient is SANOFI VACCINES US INC..

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 $18.6 million.

What is the period of performance?

Start: 2004-08-30. End: 2004-12-17.

What is the historical spending pattern for influenza vaccines by the CDC?

Historical spending on influenza vaccines by the CDC has been substantial and generally consistent, reflecting the annual need for vaccination campaigns. While specific dollar amounts fluctuate year-to-year based on vaccine prices, quantities ordered, and public health priorities, the CDC consistently allocates significant funds to procure vaccines to protect the U.S. population. This spending is often distributed across multiple contracts and suppliers to ensure a robust and reliable supply chain. Analyzing past data reveals trends in average per-unit costs, the number of suppliers engaged, and the total volume procured, providing a benchmark against which current and future awards can be assessed for value and efficiency.

How does the price of this flu vaccine delivery order compare to market rates for similar products in 2004?

Determining the precise market rate for flu vaccines in 2004 and comparing it to this $18.6 million delivery order is complex without access to detailed pricing data and volume discounts. However, general trends in vaccine pricing suggest that large-volume procurements by government agencies often secure favorable pricing due to economies of scale. The non-competitive nature of this award, however, means that the price may not reflect the lowest possible rate achievable through a competitive bidding process. To conduct a thorough comparison, one would need to analyze publicly available pricing information from vaccine manufacturers for that period and consider factors like the specific vaccine formulation and the quantity purchased.

What are the primary risks associated with a non-competitive award for critical biological products like vaccines?

Non-competitive awards for critical biological products, such as vaccines, carry several inherent risks. Foremost among these is the potential for inflated pricing, as the absence of competition removes the downward pressure that multiple bids typically exert on costs. This can lead to taxpayers bearing a higher financial burden than necessary. Another significant risk is a reduced incentive for the sole-source provider to innovate or improve efficiency, as they face less market pressure. Furthermore, over-reliance on a single supplier can create supply chain vulnerabilities; if the awarded contractor experiences production issues, delays, or quality control problems, the availability of essential vaccines could be jeopardized, potentially impacting public health initiatives and national security.

What is Sanofi Vaccines US Inc.'s track record in supplying vaccines to the federal government prior to 2004?

Sanofi Pasteur (the vaccine division of Sanofi-Aventis, which includes Sanofi Vaccines US Inc.) has a long-standing history of supplying vaccines to the U.S. federal government, including the CDC, prior to 2004. The company is a major global vaccine manufacturer and has been a consistent provider of various vaccines, including influenza vaccines, to meet public health needs. Federal procurement databases would likely show numerous contracts and delivery orders awarded to Sanofi for vaccine supplies over many years. Their established presence and prior performance indicate a recognized capability to meet the government's requirements for vaccine production and delivery, making them a frequent recipient of such contracts.

How does the $18.6 million award compare in size to other federal contracts for biological products?

The $18.6 million award for flu vaccines in 2004 is a substantial sum, indicative of a significant procurement for a critical public health commodity. When compared to the broader landscape of federal contracts for biological products, this amount falls within a moderate to large range. Federal agencies, particularly HHS and the Department of Defense, frequently award contracts for pharmaceuticals, vaccines, and other biological materials that can range from hundreds of thousands to hundreds of millions of dollars, depending on the product, quantity, and duration. This specific award represents a notable investment in ensuring vaccine availability for a particular flu season or public health campaign.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 2004N01181

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sanofi Pasteur MSD SNC (UEI: 577272925)

Address: DISCOVERY DR, SWIFTWATER, PA, 18370

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,200,000

Exercised Options: $37,200,000

Current Obligation: $18,600,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200407241I

IDV Type: IDC

Timeline