HHS awards $533.9M contract for biological products to Pfizer Inc

Contract Overview

Contract Amount: $533,860,845 ($533.9M)

Contractor: Pfizer Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-03-31

End Date: 2007-04-15

Contract Duration: 380 days

Daily Burn Rate: $1.4M/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: MALVERN, CHESTER County, PENNSYLVANIA, 19355, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $533.9 million to PFIZER INC. for work described as: VFC 2006 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $533.9 million represents a significant investment in biological products. 3. Pfizer Inc. is the sole contractor, indicating a potential concentration of supply. 4. The contract duration of 380 days suggests a short-term need for these products. 5. The award type 'DCA' and pricing type 'FIRM FIXED PRICE' imply defined deliverables and cost certainty. 6. The product classification 'Biological Product (except Diagnostic) Manufacturing' highlights a critical area of healthcare supply.

Value Assessment

Rating: good

The contract value of $533.9 million for biological products is substantial. Without specific benchmarks for comparable biological product procurements from the Centers for Disease Control and Prevention (CDC) or other agencies, a precise value-for-money assessment is challenging. However, the firm fixed-price nature of the contract provides cost predictability. The awarded amount should be compared against historical spending for similar products and quantities to determine if it represents a competitive price point.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified in the provided data, but the use of full and open competition generally promotes a wider range of offers and can lead to more competitive pricing. This approach is designed to ensure the government receives the best value by leveraging market forces.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing goods and services at competitive prices, thereby optimizing the use of public funds.

Public Impact

The primary beneficiaries are likely public health initiatives and healthcare providers relying on the supplied biological products. The contract ensures the availability of essential biological products for disease prevention and control efforts. The geographic impact is national, supporting CDC's mission across the United States. Workforce implications may include manufacturing, quality control, and logistics roles within Pfizer and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole contractor for a large value award could pose supply chain risks if not managed proactively.
Dependence on a single supplier for critical biological products warrants close monitoring of performance and capacity.

Positive Signals

Awarded through full and open competition, indicating a robust and fair bidding process.
Firm fixed-price contract provides cost certainty and budget predictability for the government.
Pfizer Inc. is a well-established pharmaceutical company with significant experience in biological product manufacturing.

Sector Analysis

The procurement of biological products falls within the broader pharmaceutical and biotechnology sector, a critical component of the healthcare industry. This sector is characterized by high research and development costs, stringent regulatory oversight, and significant market competition. The global market for biologics is substantial and growing, driven by advancements in medical science and an increasing demand for advanced therapies. This contract represents a specific instance of federal spending within this vital sector, supporting public health objectives.

Small Business Impact

The provided data indicates that small business participation (sb) was not a specific set-aside criterion for this contract (ss: false, sb: false). Therefore, there are no direct small business set-aside implications. However, as a large prime contract awarded to Pfizer Inc., there may be opportunities for subcontracting to small businesses within Pfizer's supply chain. The extent of such subcontracting would depend on Pfizer's internal policies and the nature of the services and goods required for fulfilling the contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a firm fixed-price contract, oversight would focus on ensuring timely delivery of specified biological products that meet quality standards. Accountability measures are inherent in the contract terms, with potential penalties for non-performance. Transparency is generally maintained through federal procurement databases, though specific performance details may be proprietary.

Related Government Programs

CDC Biological Product Procurement
HHS Pharmaceutical Contracts
Federal Vaccine and Therapeutic Supply Chains
Public Health Emergency Preparedness Contracts

Risk Flags

Sole contractor dependency
Potential for supply chain disruption
Lack of detailed product specification in award data

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $533.9 million to PFIZER INC.. VFC 2006

Who is the contractor on this award?

The obligated recipient is PFIZER 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 $533.9 million.

What is the period of performance?

Start: 2006-03-31. End: 2007-04-15.

What is the historical spending pattern for biological products by the CDC over the last five fiscal years?

Analyzing the historical spending patterns for biological products by the CDC over the last five fiscal years would provide crucial context for the $533.9 million award to Pfizer Inc. This analysis would involve aggregating data on similar procurements, identifying trends in volume, pricing, and types of biological products acquired. For instance, if historical spending has been consistently high for these types of products, it suggests a sustained need. Conversely, a significant increase in this award compared to previous years might warrant further investigation into the drivers of that change, such as new public health initiatives, increased disease prevalence, or shifts in procurement strategy. Understanding these patterns helps in assessing whether the current contract represents a typical expenditure or an anomaly, and whether the pricing is in line with historical trends.

How does the per-unit cost of the biological products procured under this contract compare to market rates or similar government contracts?

A detailed comparison of the per-unit cost for the biological products procured under this $533.9 million contract against market rates and similar government contracts is essential for a robust value-for-money assessment. This would involve identifying the specific biological products, their quantities, and the unit price derived from the total contract value. Benchmarking against publicly available commercial pricing, or against prices paid by other federal agencies for identical or comparable products, would reveal potential cost savings or overpayments. If the contract data does not readily provide unit pricing, it may be necessary to request this information or infer it based on the total award and estimated quantities. A significant deviation from established benchmarks could indicate issues with pricing negotiations, market fluctuations, or the specific terms of the contract.

What is Pfizer Inc.'s track record with the federal government for supplying biological products, specifically to the CDC?

Investigating Pfizer Inc.'s track record with the federal government, particularly with the CDC, for supplying biological products is crucial for assessing performance risk. This involves reviewing past contracts awarded to Pfizer for similar products, examining contract performance reports (if available), and looking for any history of delivery delays, quality issues, or disputes. A strong performance history with the agency suggests a lower risk of execution failure for the current $533.9 million contract. Conversely, a history of performance issues, even on unrelated contracts, might raise concerns about Pfizer's capacity or reliability in meeting the demands of this significant award. Information from sources like the Federal Procurement Data System (FPDS) or agency-specific performance management systems can provide insights into their past reliability.

What are the specific types and quantities of biological products being procured under this contract, and what is their intended use?

The contract specifies 'Biological Product (except Diagnostic) Manufacturing' as the National Item Identification Number (NIIN) category, but lacks granular detail on the specific types and quantities of biological products. Understanding these specifics is vital for assessing the contract's impact and value. For example, are these vaccines, therapeutic agents, or reagents for research? The intended use, likely related to public health initiatives managed by the CDC, dictates the criticality of the supply. Knowing the exact products and quantities allows for a more precise comparison with market prices and historical spending, and helps evaluate the strategic importance of this procurement to national health security. Without this detail, the assessment remains at a high level.

What are the potential risks associated with having a single contractor, Pfizer Inc., for this substantial biological product award?

The primary risk associated with having a single contractor, Pfizer Inc., for this $533.9 million award is supply chain vulnerability. Dependence on one supplier for critical biological products can create significant challenges if Pfizer experiences production issues, faces unforeseen disruptions (e.g., natural disasters, labor strikes), or encounters quality control problems. This could lead to shortages, delays, and potentially compromise public health efforts. Furthermore, a sole-source situation, even if awarded through competition initially, can reduce leverage in future negotiations or contract modifications. The government should implement robust monitoring mechanisms, maintain open communication with Pfizer, and potentially explore contingency plans or alternative suppliers for future procurements to mitigate these risks.

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: Pfizer Inc (UEI: 001326495)

Address: 500 ARCOLA RD, COLLEGEVILLE, PA, 19426

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

Financial Breakdown

Contract Ceiling: $5,889,471,535

Exercised Options: $5,345,198,638

Current Obligation: $533,860,845

Timeline