HHS awarded $35.37M for smallpox vaccine manufacturing to Sanofi Pasteur, a sole-source contract

Contract Overview

Contract Amount: $35,370,000 ($35.4M)

Contractor: Sanofi Pasteur Biologics, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2012-08-30

End Date: 2018-04-21

Contract Duration: 2,060 days

Daily Burn Rate: $17.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: WARMBASE SMALLPOX VACCINE MANUFACTURING

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $35.4 million to SANOFI PASTEUR BIOLOGICS, LLC for work described as: WARMBASE SMALLPOX VACCINE MANUFACTURING Key points: 1. The contract value represents a significant investment in biodefense preparedness. 2. Sole-source award suggests limited market options or specific contractor capabilities. 3. Contract duration of over 5 years indicates a long-term need for vaccine supply. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The award falls under biological product manufacturing, a critical health sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific focus on smallpox vaccine manufacturing. Without comparable contracts for similar niche biological products, assessing value for money is difficult. The firm fixed-price structure provides some cost control, but the absence of competition limits the ability to determine if the price reflects optimal market rates. Further analysis would require understanding the specific production costs and market dynamics for this particular vaccine.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or is the sole producer of the required good or service. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from potential cost savings that could arise from a competitive procurement process.

Public Impact

The primary beneficiaries are the U.S. public, through enhanced biodefense and public health security. The contract ensures the continued manufacturing and availability of the WARMBASE smallpox vaccine. Geographic impact is national, ensuring vaccine availability across the United States. Workforce implications include supporting specialized jobs in biopharmaceutical manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases cost to taxpayers.
Long contract duration could lead to price increases over time if not managed effectively.
Dependence on a single supplier creates supply chain risk.
Lack of transparency in the sole-source justification process.

Positive Signals

Ensures critical vaccine supply for national security and public health.
Firm fixed-price contract provides cost certainty for the government.
Contractor has a specific capability for this niche product.

Sector Analysis

The contract falls within the broader biopharmaceutical manufacturing sector, a critical component of the healthcare and defense industries. This sector is characterized by high R&D costs, stringent regulatory requirements, and specialized production capabilities. The market for specific vaccines, especially those related to biodefense, can be limited, often leading to sole-source or limited competition procurements. Comparable spending benchmarks are difficult to establish without identifying other government contracts for similar niche biological agents.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of vaccine manufacturing and the sole-source award to a large entity, there are likely limited opportunities for small businesses to participate directly as prime contractors. Subcontracting opportunities for small businesses may exist, but would depend on the prime contractor's procurement practices and the specific needs of the manufacturing process.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC) within HHS. Accountability measures would be embedded in the contract's performance work statement, delivery schedules, and quality control requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Strategic National Stockpile
Biodefense Preparedness Programs
Vaccine Research and Development
Public Health Emergency Response

Risk Flags

Sole-source award may limit cost-effectiveness.
Potential supply chain vulnerability due to single supplier.
Lack of competitive benchmarking for pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $35.4 million to SANOFI PASTEUR BIOLOGICS, LLC. WARMBASE SMALLPOX VACCINE MANUFACTURING

Who is the contractor on this award?

The obligated recipient is SANOFI PASTEUR BIOLOGICS, LLC.

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 $35.4 million.

What is the period of performance?

Start: 2012-08-30. End: 2018-04-21.

What is the historical spending pattern for smallpox vaccine manufacturing by the federal government?

Historical federal spending on smallpox vaccine manufacturing is difficult to precisely quantify without access to comprehensive historical procurement data. However, significant investments were made in the mid-20th century during eradication campaigns. More recently, spending has focused on maintaining stockpiles and ensuring manufacturing capabilities for biodefense purposes, particularly after the September 11th attacks and concerns about bioterrorism. Contracts like the one awarded to Sanofi Pasteur represent a shift towards ensuring ongoing readiness and supply chain resilience for critical biological agents, rather than mass vaccination campaigns. The total amount awarded for this specific contract, $35.37 million over approximately six years, indicates a sustained, albeit niche, level of investment in maintaining this capability.

What are the specific risks associated with a sole-source contract for a critical vaccine?

Sole-source contracts for critical vaccines present several risks. Firstly, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to negotiate the best possible value. Secondly, it creates a dependency on a single supplier, making the supply chain vulnerable to disruptions caused by the contractor's operational issues, financial instability, or geopolitical factors affecting their operations. Thirdly, without competitive pressure, there may be less incentive for the sole-source provider to innovate or improve efficiency. Finally, the justification for a sole-source award must be robust; if the justification is weak or flawed, it raises concerns about the procurement process itself and whether alternatives were adequately explored.

How does this contract compare to other federal investments in biological product manufacturing?

This contract for $35.37 million for smallpox vaccine manufacturing is a significant but specific investment within the broader federal portfolio for biological products. The federal government invests billions annually across various agencies (e.g., NIH, BARDA, DoD) in R&D, manufacturing infrastructure, and procurement of a wide range of biological products, including therapeutics, diagnostics, and other vaccines for infectious diseases and biodefense. Compared to large-scale vaccine procurements for influenza or COVID-19, this contract is relatively modest in dollar value but critical due to the niche nature of smallpox and its biodefense implications. Its sole-source nature also distinguishes it from more competitively procured biological products.

What is the track record of Sanofi Pasteur Biologics, LLC in fulfilling government contracts for vaccines?

Sanofi Pasteur Biologics, LLC, as part of the larger Sanofi group, has a substantial track record of fulfilling government contracts, including those with the U.S. Department of Health and Human Services (HHS) and the Department of Defense (DoD). They are a major global vaccine manufacturer with extensive experience in producing a wide array of vaccines. While specific details on all past government contracts require detailed database searches, Sanofi has been a key supplier for various U.S. government vaccination programs, including influenza vaccines. Their established manufacturing capabilities and regulatory compliance history generally position them as a reliable partner for complex biological product procurements. Performance on this specific WARMBASE contract would be evaluated based on delivery, quality, and adherence to terms.

What are the potential long-term implications of this contract for national biodefense preparedness?

This contract has significant long-term implications for national biodefense preparedness by ensuring a continuous and reliable supply of the WARMBASE smallpox vaccine. Smallpox remains a potential bioterrorism threat, and maintaining an adequate stockpile and manufacturing capability is a cornerstone of the nation's response strategy. By securing this manufacturing capacity through Sanofi Pasteur, the government mitigates the risk of being unable to produce or procure the vaccine in the event of an outbreak or deliberate release. This contract contributes to the overall resilience of the U.S. public health infrastructure, allowing for a more effective and timely response to biological threats, thereby protecting the population and maintaining national security.

Industry Classification

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

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2006N08476

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 38 SIDNEY ST, CAMBRIDGE, MA, 02139

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,370,000

Exercised Options: $35,370,000

Current Obligation: $35,370,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200824959I

IDV Type: IDC

Timeline