HHS awards $385M contract for biological products to GlaxoSmithKline, highlighting firm fixed price and full competition
Contract Overview
Contract Amount: $385,022,323 ($385.0M)
Contractor: Glaxosmithkline Holdings (americas) 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: $602.5K/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: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19102
Plain-Language Summary
Department of Health and Human Services obligated $385.0 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC. for work described as: VFC 2006 Key points: 1. Contract value of $385M for biological product manufacturing. 2. Competition was full and open, suggesting market availability. 3. Risk appears moderate given the established nature of biological product manufacturing. 4. Sector is healthcare, specifically biological product manufacturing.
Value Assessment
Rating: good
The contract value of $385M is significant for biological product manufacturing. Without specific benchmarks for this exact product, it's difficult to definitively assess pricing, but the firm fixed price structure suggests a degree of price certainty.
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 were likely considered. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The use of full and open competition aims to secure favorable pricing for taxpayers by leveraging market forces.
Public Impact
Ensures supply of essential biological products for public health. Supports the healthcare sector and pharmaceutical manufacturing. Potential for long-term availability of critical medical supplies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for supply chain disruptions impacting biological product availability.
- Dependence on a single awardee for a critical product.
Positive Signals
- Firm fixed price contract provides cost predictability.
- Full and open competition suggests market readiness.
Sector Analysis
This contract falls within the healthcare sector, specifically the manufacturing of biological products. Spending in this area is critical for public health initiatives and can be substantial due to research, development, and production costs.
Small Business Impact
The data indicates this contract was not awarded to small businesses, suggesting the scope or nature of the biological product manufacturing required specialized capabilities likely held by larger corporations.
Oversight & Accountability
The contract duration of over 1.5 years with a firm fixed price suggests a structured oversight approach. However, ongoing monitoring for quality and delivery would be crucial.
Related Government Programs
- Biological Product (except Diagnostic) Manufacturing
- Department of Health and Human Services Contracting
- Centers for Disease Control and Prevention Programs
Risk Flags
- Potential for sole-source dependency if follow-on contracts are not competed.
- Risk of price increases in future contract renewals.
- Vulnerability to supply chain disruptions affecting biological product manufacturing.
- Ensuring continued innovation and quality in biological product development.
Tags
biological-product-except-diagnostic-man, department-of-health-and-human-services, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $385.0 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC.. VFC 2006
Who is the contractor on this award?
The obligated recipient is GLAXOSMITHKLINE HOLDINGS (AMERICAS) 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 $385.0 million.
What is the period of performance?
Start: 2006-04-01. End: 2007-12-31.
What specific biological products are covered under this contract and their criticality to public health?
The contract is for 'Biological Product (except Diagnostic) Manufacturing'. While the specific products are not detailed, this category typically includes vaccines, therapeutic proteins, and other biological agents essential for disease prevention and treatment. Their criticality is high, as disruptions in supply could have significant public health consequences.
What were the key factors that led to the selection of GlaxoSmithKline Holdings (Americas) Inc. as the awardee?
Given the 'full and open competition' award type, GlaxoSmithKline likely offered the most advantageous proposal based on a combination of factors including price, technical capability, past performance, and delivery schedule. The specific evaluation criteria would have been outlined in the solicitation.
How does the firm fixed price (FFP) contract structure mitigate risks associated with biological product manufacturing cost fluctuations?
The FFP structure shifts the risk of cost overruns to the contractor, GlaxoSmithKline. This provides the Department of Health and Human Services with predictable costs. However, it necessitates thorough upfront cost analysis and negotiation to ensure the price is fair and reasonable, as the contractor bears the burden of managing production costs.
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: Glaxosmithkline PLC (UEI: 238980408)
Address: 1 FRANKLIN PLZ, PHILADELPHIA, PA, 19102
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $4,010,742,253
Exercised Options: $4,010,742,253
Current Obligation: $385,022,323
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Timeline
Start Date: 2006-04-01
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2018-05-09
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