HHS awarded $329M contract for biological products to Sanofi, highlighting a significant investment in vaccine manufacturing

Contract Overview

Contract Amount: $329,297,526 ($329.3M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-04-01

End Date: 2007-12-31

Contract Duration: 639 days

Daily Burn Rate: $515.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VFC 2006

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $329.3 million to SANOFI VACCINES US INC. for work described as: VFC 2006 Key points: 1. The contract value of $329 million represents a substantial commitment to securing essential biological products. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and access to critical medical supplies. 3. Risk indicators may include supply chain vulnerabilities and the potential for price fluctuations in the biological product market. 4. Performance context is vital to understand the effectiveness of Sanofi's delivery of biological products. 5. This contract positions Sanofi within the broader healthcare and pharmaceutical sector, specifically in vaccine and biological product manufacturing.

Value Assessment

Rating: good

The contract value of $329 million for biological products appears to be within a reasonable range for large-scale procurement, though direct comparisons are difficult without specific product details. Benchmarking against similar contracts for vaccine manufacturing or biological product supply would provide a clearer picture of value for money. The firm fixed-price structure suggests an attempt to control costs, but the overall value is contingent on the quality and quantity of products delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and terms for the government. The number of bidders is not specified, but the 'full and open' designation suggests a robust bidding process.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best possible value for its investment in critical biological products.

Public Impact

The primary beneficiaries are public health initiatives and potentially individuals receiving vaccinations or treatments derived from these biological products. Services delivered include the manufacturing and supply of essential biological products, crucial for disease prevention and treatment. The geographic impact is likely national, ensuring a stable supply chain for the United States. Workforce implications may include job creation within Sanofi's manufacturing and distribution facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting national health security.
Dependence on a single contractor for critical biological products could pose risks.
Ensuring consistent quality and efficacy of manufactured biological products is paramount.

Positive Signals

Awarding to a known entity like Sanofi suggests a level of trust in their manufacturing capabilities.
The firm fixed-price contract provides cost certainty for the government.
Full and open competition indicates a commitment to obtaining competitive pricing.

Sector Analysis

This contract falls within the pharmaceutical and biotechnology sector, a critical area for national health and security. The market for biological products, including vaccines, is substantial and highly regulated. This award to Sanofi, a major player in the vaccine market, aligns with government efforts to ensure a steady supply of essential medical countermeasures. Comparable spending benchmarks would involve analyzing other large-scale government procurements for similar biological products or vaccine development programs.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no explicit mention of small business set-asides. This suggests that the primary award was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist within the supply chain, but this contract does not appear to directly promote small business engagement as a primary objective.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Disease Control and Prevention (CDC) within HHS. Accountability measures would be tied to the contract's performance clauses, delivery schedules, and quality standards. Transparency is generally maintained through contract award databases, though specific operational details may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Vaccine Procurement Programs
Biologics Manufacturing Contracts
Public Health Supply Chain Management
Department of Health and Human Services Contracts

Risk Flags

Supply Chain Vulnerability
Quality Control Assurance
Price Volatility of Raw Materials
Manufacturing Capacity Limitations

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $329.3 million to SANOFI VACCINES US INC.. VFC 2006

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 $329.3 million.

What is the period of performance?

Start: 2006-04-01. End: 2007-12-31.

What is Sanofi's track record with the federal government for similar biological product contracts?

Sanofi, through its various divisions, has a long-standing relationship with the U.S. federal government, particularly with agencies like the Department of Health and Human Services (HHS) and the Department of Defense (DoD), for the supply of vaccines and other biological products. Their track record includes numerous large-scale procurements for influenza vaccines, childhood immunizations, and other critical medical countermeasures. While specific performance metrics for past contracts are not detailed here, Sanofi is generally recognized as a major global pharmaceutical company with significant manufacturing capacity and experience in meeting government requirements. Historical data from contract databases would reveal the volume and value of previous awards, as well as any reported performance issues or successes.

How does the $329 million contract value compare to typical spending on biological products by the CDC?

The $329 million contract value represents a significant, but not necessarily atypical, investment for the Centers for Disease Control and Prevention (CDC) when procuring large quantities of biological products, such as vaccines. The CDC's annual spending on vaccines and other biologics can fluctuate based on public health needs, emerging diseases, and existing stockpiles. For context, major influenza vaccine procurements alone can run into hundreds of millions of dollars annually. This specific contract's value should be assessed against the backdrop of the CDC's overall budget for medical countermeasures and its strategic goals for ensuring national health security. Without knowing the exact product and quantity, a precise comparison is challenging, but it falls within the expected range for substantial biological product acquisitions.

What are the primary risks associated with a contract of this magnitude for biological product manufacturing?

A contract of this magnitude for biological product manufacturing carries several key risks. Firstly, supply chain disruptions, whether due to raw material shortages, manufacturing issues, or geopolitical events, could impact the timely delivery of critical products. Secondly, there's a risk of price volatility in the raw materials or specialized components needed for biological production. Thirdly, ensuring consistent quality and efficacy of the manufactured products is paramount; any deviation could have severe public health consequences. Lastly, dependence on a single large contractor, even one with a strong track record like Sanofi, can create vulnerabilities if unforeseen issues arise with their production capabilities or business operations. Robust oversight and contingency planning are essential to mitigate these risks.

What does the 'Biological Product (except Diagnostic) Manufacturing' classification imply for the services delivered?

The Product Service Code (PSC) '3540 - Biological Product (except Diagnostic) Manufacturing' indicates that this contract is for the production of biological substances intended for therapeutic or preventative use, excluding diagnostic tools. This typically encompasses a wide range of products such as vaccines, antibodies, therapeutic proteins, and other complex biological agents derived from living organisms. The manufacturing process itself is highly specialized, requiring advanced biotechnology, sterile environments, and rigorous quality control measures. The contract likely covers the entire manufacturing lifecycle, from raw material sourcing and fermentation/cell culture to purification, formulation, filling, and packaging, ensuring the final product meets stringent regulatory standards for safety and efficacy.

How does the contract duration (639 days) influence the assessment of value and risk?

The contract duration of 639 days (approximately 21 months) provides a substantial timeframe for the contractor, Sanofi, to fulfill its obligations. This duration allows for planned production schedules and potentially accommodates the complexities inherent in biological product manufacturing. From a value perspective, a longer duration can sometimes lead to more stable pricing compared to shorter-term contracts, especially if it allows for economies of scale in production. However, it also extends the period during which risks such as raw material price fluctuations or changes in market demand could materialize. For the government, a longer contract offers supply continuity but requires sustained oversight to ensure ongoing performance and value throughout its term.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2006N08323

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: RR611 DISCOVERY DRIVE, SWIFTWATER, PA, 18370

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

Financial Breakdown

Contract Ceiling: $3,839,735,705

Exercised Options: $3,839,735,705

Current Obligation: $329,297,526

Timeline