HHS awarded Pfizer Inc. a $585.6M contract for vaccine manufacturing, with a firm fixed price

Contract Overview

Contract Amount: $585,652,370 ($585.7M)

Contractor: Pfizer Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2007-04-16

End Date: 2008-03-31

Contract Duration: 350 days

Daily Burn Rate: $1.7M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VACCINE FOR CHILDREN TAS::75 0512::TAS

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $585.7 million to PFIZER INC. for work described as: VACCINE FOR CHILDREN TAS::75 0512::TAS Key points: 1. The contract's firm fixed price structure provides cost certainty for the government. 2. Pfizer Inc. is a major player in the pharmaceutical sector, suggesting established capabilities. 3. The contract duration of 350 days indicates a focused, short-term requirement. 4. The specific product classification points to a specialized area within biological manufacturing. 5. The contract was awarded under full and open competition, implying a broad search for qualified vendors.

Value Assessment

Rating: good

The contract value of $585.6 million for vaccine manufacturing appears substantial, reflecting the scale of production required. Without specific benchmarks for this particular vaccine or comparable contracts from other manufacturers, a precise value-for-money assessment is challenging. However, the firm fixed price (FFP) contract type suggests that the government has negotiated a set price, which can be advantageous in controlling costs if the contractor can deliver efficiently. The total award amount should be evaluated against the quantity and type of vaccines procured to understand the per-unit cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the government solicited proposals from all responsible sources. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, encouraging multiple companies to submit proposals. This process aims to ensure that the government receives the best possible value by leveraging market competition to drive down prices and improve service quality. The open competition suggests that the government sought a wide range of potential suppliers to meet its needs.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider selection of qualified contractors, ultimately maximizing the value of government spending.

Public Impact

Children across the nation will benefit from access to this vaccine. The contract ensures the manufacturing and supply of essential biological products. The geographic impact is national, covering the entire United States. This contract supports jobs within the pharmaceutical manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for a critical vaccine could pose supply chain risks.
Ensuring consistent quality control throughout the manufacturing process is paramount.

Positive Signals

Firm fixed price contract provides cost predictability.
Award to a well-established manufacturer like Pfizer suggests reliability.
Full and open competition indicates a robust procurement process.

Sector Analysis

The pharmaceutical manufacturing sector is characterized by high research and development costs, stringent regulatory requirements, and significant economies of scale. This contract falls within the 'Biological Product (except Diagnostic) Manufacturing' subsector. The global pharmaceutical market is vast, with vaccine production being a critical component, especially in public health initiatives. Comparable spending benchmarks would involve looking at other large-scale vaccine procurement contracts awarded by government agencies or major international health organizations.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large-scale procurement likely involving complex manufacturing processes, it is probable that the prime contractor, Pfizer Inc., would be responsible for managing its supply chain. The extent to which small businesses might be involved as subcontractors is not detailed in this award notice. Further analysis would be needed to determine if subcontracting opportunities were mandated or encouraged.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and its relevant agencies, such as the Centers for Disease Control and Prevention (CDC). The contract type (firm fixed price) and the nature of manufacturing suggest that oversight would focus on production milestones, quality control, and timely delivery. Transparency is generally maintained through contract award databases, and accountability would be enforced through contractual terms and conditions, with potential involvement from HHS's Office of Inspector General for significant issues.

Related Government Programs

Vaccine Procurement Programs
Public Health Initiatives
Biological Product Manufacturing
Pharmaceutical Supply Chain Management

Risk Flags

Potential for supply chain disruption
Dependence on a single manufacturer for critical product

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $585.7 million to PFIZER INC.. VACCINE FOR CHILDREN TAS::75 0512::TAS

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 $585.7 million.

What is the period of performance?

Start: 2007-04-16. End: 2008-03-31.

What is the historical spending pattern for vaccine manufacturing contracts awarded by the CDC to Pfizer Inc. over the last five years?

Analyzing historical spending patterns for vaccine manufacturing contracts awarded by the CDC to Pfizer Inc. over the last five years would provide crucial context for the current $585.6 million award. This would involve identifying all previous contracts, their values, durations, and the specific vaccines or biological products procured. A trend analysis could reveal whether this award represents an increase or decrease in spending, whether it's for a new vaccine or continued production of an existing one, and if there's a pattern of sole-source or competitive awards. Understanding this history helps assess if the current contract is consistent with past practices or represents a significant shift in procurement strategy and investment in vaccine manufacturing capabilities.

How does the per-unit cost of the vaccine under this contract compare to similar vaccines procured by other federal agencies or international health organizations?

To assess the value for money, a comparison of the per-unit cost of the vaccine under this $585.6 million contract against similar vaccines procured by other federal agencies (like the Department of Defense or VA) or international bodies (like the WHO or UNICEF) is essential. This requires obtaining the total quantity of vaccines to be manufactured under the contract to calculate the effective per-unit price. Benchmarking against comparable products, considering factors like vaccine type, dosage, and manufacturing complexity, would highlight whether the government is achieving a competitive price. Significant deviations from market rates could indicate potential overpayment or exceptional value, warranting further investigation into the specific circumstances of the procurement.

What are the key performance indicators (KPIs) and quality assurance measures stipulated in the contract to ensure the efficacy and safety of the manufactured vaccines?

The contract likely includes specific Key Performance Indicators (KPIs) and rigorous quality assurance (QA) measures to guarantee the efficacy and safety of the manufactured vaccines. These would typically encompass adherence to Good Manufacturing Practices (GMP), stringent testing protocols at various production stages, batch release criteria, and timelines for delivery. The Centers for Disease Control and Prevention (CDC) would oversee compliance, potentially through site inspections and review of contractor-submitted quality data. The firm fixed price nature of the contract underscores the importance of meeting these quality standards, as deviations could lead to contract penalties or termination, ensuring that taxpayer funds are used for safe and effective medical products.

What is Pfizer Inc.'s track record with the federal government regarding vaccine production and contract performance, particularly concerning delivery timelines and quality compliance?

Pfizer Inc. has a significant track record with the federal government, particularly in vaccine production, most notably with its COVID-19 vaccines. Assessing their performance on this specific $585.6 million contract requires reviewing past performance evaluations, any documented instances of delivery delays, quality control issues, or contract disputes on similar federal contracts. Government databases like the Federal Awardee Performance and Integrity Information System (FAPIIS) can provide insights. A history of consistent, high-quality performance and timely delivery on previous vaccine contracts would be a positive indicator for this current award, suggesting reliability and capability. Conversely, any past performance issues would raise concerns about potential risks.

What is the potential impact of this contract on the overall supply chain resilience for critical vaccines within the United States?

This $585.6 million contract with Pfizer Inc. for vaccine manufacturing contributes to the overall supply chain resilience for critical vaccines within the United States. By securing a large-scale production capability, the government helps ensure that sufficient quantities of essential vaccines are available to meet public health demands. The firm fixed price and full and open competition aspects suggest a structured approach to maintaining this supply. However, reliance on a single manufacturer for a specific vaccine can also introduce vulnerabilities. Therefore, assessing the broader impact requires understanding how this contract fits into a larger strategy that may involve diversifying manufacturers, maintaining strategic stockpiles, and monitoring global supply chain dynamics.

Industry Classification

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

Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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

Financial Breakdown

Contract Ceiling: $588,175,278

Exercised Options: $588,175,278

Current Obligation: $585,652,370

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline