HHS awards $458.6M pediatric vaccine contract to GlaxoSmithKline for biological product manufacturing

Contract Overview

Contract Amount: $458,629,037 ($458.6M)

Contractor: Glaxosmithkline Holdings (americas) 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: $1.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Healthcare

Official Description: 200-2007-20307 - GLAXOSMITHKLINE'S PEDIATRIC VACCINE CONTRACT

Place of Performance

Location: BROOKHAVEN, DEKALB County, GEORGIA, 30329, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $458.6 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC. for work described as: 200-2007-20307 - GLAXOSMITHKLINE'S PEDIATRIC VACCINE CONTRACT Key points: 1. Contract value represents a significant investment in public health infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty for the government. 4. Contract duration of 350 days indicates a focused, short-term need. 5. The award falls within the Biological Product manufacturing sector. 6. Geographic location of performance is Georgia.

Value Assessment

Rating: good

The contract value of approximately $458.6 million for pediatric vaccines is substantial. Benchmarking this against similar large-scale vaccine procurements would be necessary for a precise value-for-money assessment. However, given the critical nature of vaccine supply, this amount appears within a reasonable range for securing a significant quantity of essential biological products. The fixed-price nature of the contract provides a degree of cost predictability, which is a positive indicator for efficient spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the number of bidders is not specified, this procurement method generally fosters a competitive environment, which can lead to more favorable pricing and better terms for the government. The open nature of the competition suggests that the Centers for Disease Control and Prevention (CDC) sought to leverage market forces to secure the best possible offer for these critical pediatric vaccines.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining competitive pricing and ensures that the government is not limited to a single provider, potentially leading to cost savings.

Public Impact

Children across the nation will benefit from access to essential pediatric vaccines. The contract ensures the supply of biological products critical for public health. Services are delivered through the Centers for Disease Control and Prevention (CDC). Performance is expected to occur in Georgia. The contract supports the pharmaceutical manufacturing workforce involved in vaccine production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting vaccine availability.
Reliance on a single contractor for a critical public health need.
Ensuring long-term vaccine efficacy and safety monitoring post-award.

Positive Signals

Awarded through full and open competition, suggesting market responsiveness.
Fixed-price contract type offers budget certainty.
Addresses a critical public health need for pediatric vaccines.

Sector Analysis

This contract falls within the pharmaceutical and biotechnology sector, specifically focusing on biological product manufacturing. The market for vaccines is characterized by high research and development costs, stringent regulatory requirements, and significant public health importance. Large government contracts are common in this sector to ensure national supply and address public health emergencies. Comparable spending benchmarks would involve analyzing other large-scale vaccine procurements by federal agencies like HHS or the Department of Defense.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. Given the nature and scale of this contract for biological product manufacturing, it is likely that the primary awardee is a large pharmaceutical company. However, opportunities for small businesses may exist within the supply chain for raw materials, specialized services, or logistics, though these are not detailed in the award information. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Centers for Disease Control and Prevention (CDC), a division of HHS. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified biological products. Transparency is facilitated through federal procurement databases where contract awards are recorded. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

National Vaccine Program
HHS Public Health Emergency Fund
CDC Vaccine Procurement Contracts
Biological Product Manufacturing Contracts

Risk Flags

Potential for supply chain vulnerability
Reliance on a single manufacturer for critical supply

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $458.6 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC.. 200-2007-20307 - GLAXOSMITHKLINE'S PEDIATRIC VACCINE CONTRACT

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 $458.6 million.

What is the period of performance?

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

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

Analyzing historical spending patterns for pediatric vaccines by the CDC is crucial for understanding long-term investment in public health and identifying trends in vaccine procurement. While this specific contract awarded $458.6 million in 2007-2008, a comprehensive review would involve examining annual expenditures over the past decade or more. This would reveal fluctuations based on vaccine development, public health initiatives, and epidemic responses. For instance, spending might increase during periods of new vaccine introductions or heightened concerns about infectious diseases. Understanding these patterns helps in forecasting future needs and budgeting effectively. It also allows for comparison of current contract values against historical norms to assess whether current pricing is competitive and if spending aligns with evolving public health priorities and the introduction of new vaccine technologies.

How does the unit cost of these pediatric vaccines compare to market rates or similar government contracts?

Determining the precise unit cost for the pediatric vaccines procured under this $458.6 million contract requires detailed information on the quantity of vaccines purchased. Without the exact number of doses, a direct comparison to market rates or similar government contracts is challenging. However, the Centers for Disease Control and Prevention (CDC) typically negotiates prices based on volume, manufacturing costs, and public health importance. For context, vaccine prices can vary significantly based on the type of vaccine, the number of strains covered, and the complexity of production. Federal agencies often leverage their purchasing power to secure lower prices than might be available in the commercial market. Benchmarking against other large-scale vaccine procurements, both within the government and internationally, would provide a more robust assessment of value for money. The fixed-price nature of this contract suggests that the unit cost was agreed upon upfront, offering predictability.

What is GlaxoSmithKline's track record with federal vaccine contracts prior to and following this award?

GlaxoSmithKline (GSK) has a long-standing history as a major global pharmaceutical company involved in vaccine development and supply. Prior to this 2007-2008 contract, GSK was already a significant player in the vaccine market, holding numerous contracts with governments worldwide. Following this award, GSK has continued to be a key supplier of vaccines to the U.S. government and other nations, including through programs like the Vaccines for Children (VFC) program. Their track record generally includes a focus on research and development of new vaccines, large-scale manufacturing capabilities, and navigating complex regulatory environments. Assessing their performance on specific contracts would involve reviewing past performance evaluations, delivery timeliness, and adherence to quality standards. GSK's continued presence in the federal vaccine procurement landscape suggests a generally positive and reliable performance history, though specific contract performance can vary.

What are the primary risks associated with relying on a single contractor for a large pediatric vaccine procurement?

Relying on a single contractor, even one as established as GlaxoSmithKline, for a large pediatric vaccine procurement carries several inherent risks. Firstly, there's the risk of supply chain disruption. Any unforeseen event impacting GSK's manufacturing facilities, raw material sourcing, or distribution network could lead to shortages, potentially jeopardizing national immunization programs. Secondly, a sole-source or limited competition scenario (though this was full and open) can reduce pricing leverage over time. While this contract was competitively awarded, future procurements might face less competitive pressure if GSK remains the dominant or only viable supplier. Thirdly, there's the risk of quality control issues or manufacturing defects arising from a single source, which could have widespread public health consequences. Finally, dependence on one supplier can limit the government's ability to rapidly adopt newer, potentially more effective or cost-efficient vaccines if they are developed by competing firms.

How does this contract contribute to the overall public health goals of the CDC and HHS?

This contract directly supports the core public health mission of the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS) by ensuring the availability of essential pediatric vaccines. Pediatric vaccines are a cornerstone of preventative healthcare, significantly reducing the incidence of serious and potentially life-threatening infectious diseases in children. By securing a substantial supply through this $458.6 million award, the CDC aims to maintain high vaccination rates, protect vulnerable populations, and prevent outbreaks. This aligns with national health objectives focused on disease eradication, control, and the overall improvement of child health outcomes. The contract's role is critical in maintaining herd immunity and safeguarding the health of future generations, underscoring its importance within the broader public health strategy.

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: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Glaxosmithkline PLC (UEI: 238980408)

Address: ONE FRANKLIN PLAZA, PHILADELPHIA, PA, 19102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $640,429,037

Exercised Options: $640,429,037

Current Obligation: $458,629,037

Timeline