Baxter Cell Harvest Contract Exceeds $38M, Awarded to Emergent BioDefense Operations Lansing LLC

Contract Overview

Contract Amount: $38,250,000 ($38.3M)

Contractor: Emergent Biodefense Operations Lansing LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-30

End Date: 2018-08-31

Contract Duration: 700 days

Daily Burn Rate: $54.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF ; BAXTER CELL HARVEST IN YEAR 6 OF THE CONTRAC

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $38.3 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC for work described as: IGF::OT::IGF ; BAXTER CELL HARVEST IN YEAR 6 OF THE CONTRAC Key points: 1. Contract value has reached $38.25 million over its lifespan. 2. The contract was awarded on a sole-source basis, raising questions about potential price efficiencies. 3. Performance is tracked over a 700-day duration. 4. The contract falls under Biological Product (except Diagnostic) Manufacturing. 5. The award was a Delivery Order under an existing contract. 6. The contract is firm-fixed-price, providing cost certainty. 7. The contracting agency is the Department of Health and Human Services.

Value Assessment

Rating: questionable

The total award amount of $38.25 million for biological product manufacturing services needs further benchmarking against similar contracts. Without a competitive bidding process, it is difficult to definitively assess if this represents excellent value for money. The firm-fixed-price structure offers predictability, but the lack of competition could mean taxpayers are not benefiting from the most cost-effective pricing available in the market. Further analysis of the specific services rendered and their market rates is required for a comprehensive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded on a sole-source basis. This means that only one vendor, Emergent BioDefense Operations Lansing LLC, was considered for this award. The lack of competition limits the government's ability to explore alternative solutions or negotiate potentially lower prices that might arise from a bidding process. While sole-source awards can be justified in specific circumstances, they generally lead to less price discovery and potentially higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple vendors to compete and offer their most competitive rates. This can lead to higher overall spending for the government.

Public Impact

The contract supports the production of biological products, crucial for public health initiatives. The Department of Health and Human Services is the primary beneficiary, utilizing these products for its programs. The specific geographic impact and workforce implications are not detailed in the provided data but are likely concentrated around the contractor's facilities. This contract contributes to the nation's biodefense capabilities by ensuring the availability of essential biological products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the non-competitive award process.
Potential for vendor lock-in due to the absence of market competition.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded to a known entity in the biodefense sector.
Supports critical biological product manufacturing for public health.

Sector Analysis

This contract falls within the Biological Product (except Diagnostic) Manufacturing sector, a critical area for public health and biodefense. The market for such specialized manufacturing is often characterized by high barriers to entry, stringent regulatory requirements, and a limited number of qualified providers. Spending in this sector is driven by national health priorities, research and development, and emergency preparedness. Comparable spending benchmarks would typically involve analyzing contracts for similar biological product development and manufacturing services, considering factors like scale, complexity, and regulatory compliance.

Small Business Impact

The provided data indicates that small business participation was not a factor in this award (ss: false, sb: false). As this was a sole-source contract, there were no subcontracting opportunities specifically set aside for small businesses as part of the competitive process. The impact on the small business ecosystem is therefore minimal for this particular contract, as it was not designed to foster small business engagement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal procurement and program management offices. Given the nature of the award (sole-source delivery order), specific oversight mechanisms might focus on performance monitoring, quality control, and adherence to the contract terms. Transparency is limited due to the non-competitive nature of the award. The Inspector General for HHS would have jurisdiction for audits and investigations if any concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Biodefense Contracts
Biological Product Manufacturing
Department of Health and Human Services Contracts
Centers for Disease Control and Prevention Procurement
Sole-Source Awards

Risk Flags

Sole-source award may indicate limited market availability or a strategic partnership.
Lack of competition could lead to higher costs for taxpayers.
Contract duration and value warrant close performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $38.3 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC. IGF::OT::IGF ; BAXTER CELL HARVEST IN YEAR 6 OF THE CONTRAC

Who is the contractor on this award?

The obligated recipient is EMERGENT BIODEFENSE OPERATIONS LANSING 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 $38.3 million.

What is the period of performance?

Start: 2016-09-30. End: 2018-08-31.

What specific biological products are being manufactured under this contract?

The provided data indicates the contract is for 'Biological Product (except Diagnostic) Manufacturing' with the North American Industry Classification System (NAICS) code 325414. However, the specific type of biological product is not detailed. This category typically includes the manufacturing of vaccines, blood derivatives, and other biological-based medicinal products. To understand the full scope, one would need to consult the contract's statement of work or related documentation, which would specify the exact products, their intended use (e.g., therapeutic, prophylactic), and any associated research or development components.

Can the value of this contract be benchmarked against similar sole-source awards in the biodefense sector?

Benchmarking this $38.25 million sole-source contract against similar awards requires access to a database of comparable sole-source contracts within the biodefense sector. Sole-source awards are inherently difficult to benchmark directly because the absence of competition means there isn't a clear market price. However, analysis could involve comparing the contract's duration, the type of biological product, and the contractor's historical performance and pricing on other, potentially competitive, contracts. Government accountability offices or industry analysts might have proprietary data that allows for such comparisons, focusing on cost per unit or cost per milestone achieved, adjusted for inflation and specific project complexities.

What are the risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award of this magnitude ($38.25 million) is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may pay more than necessary. Another risk is reduced innovation, as there's no incentive for the sole provider to offer novel solutions or efficiencies. Furthermore, it can create vendor dependency, making it difficult to switch providers in the future. There's also a risk of complacency from the contractor, knowing they are the only option. Ensuring robust oversight and performance management becomes critical to mitigate these risks.

What is Emergent BioDefense Operations Lansing LLC's track record with the Department of Health and Human Services?

Emergent BioDefense Operations Lansing LLC has a history of contracting with the Department of Health and Human Services (HHS), particularly in areas related to biodefense and public health preparedness. While this specific contract is for biological product manufacturing, the company is known for its work in developing and producing medical countermeasures against biological and chemical threats. Examining past performance reviews, contract modifications, and any documented issues or successes on previous HHS contracts would provide a clearer picture of their reliability and capability in fulfilling government requirements.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this scenario?

The firm-fixed-price (FFP) contract type is beneficial for the government as it shifts the majority of the cost risk to the contractor, Emergent BioDefense Operations Lansing LLC. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides budget certainty for the Department of Health and Human Services, as they know the maximum amount they will pay. It incentivizes the contractor to control costs and manage performance efficiently to maintain profitability. However, the benefit of FFP is somewhat diminished in a sole-source context, as the initial 'firm' price might not have been as competitive as it could have been in a full and open competition.

What is the historical spending pattern for biological product manufacturing by the CDC or HHS?

Historical spending patterns for biological product manufacturing by the CDC or HHS are generally substantial, reflecting the critical role these products play in public health and national security. This spending fluctuates based on emerging threats, vaccine development needs, and stockpiling requirements for medical countermeasures. The CDC, in particular, invests heavily in research, development, and procurement of biological products for disease prevention and control. Analyzing multi-year spending trends, major contract awards, and shifts in funding priorities would reveal the overall investment in this sector and how this specific $38.25 million contract fits into the broader budgetary landscape.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emergent Biosolutions Inc. (UEI: 173570271)

Address: 3500 N MARTIN LUTHER KING JR BLVD, LANSING, MI, 48906

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $38,250,000

Exercised Options: $38,250,000

Current Obligation: $38,250,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200824959I

IDV Type: IDC

Timeline