HHS awards $38.4M for Smallpox License Maintenance, citing sole-source justification

Contract Overview

Contract Amount: $38,430,000 ($38.4M)

Contractor: Emergent Biodefense Operations Lansing LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2017-09-21

End Date: 2019-01-31

Contract Duration: 497 days

Daily Burn Rate: $77.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SMALLPOX LICENSE MAITENANCE - MOD TO ADD CLAUSE 52.245-1 - GOVERNMENT PROPERTY

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $38.4 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC for work described as: SMALLPOX LICENSE MAITENANCE - MOD TO ADD CLAUSE 52.245-1 - GOVERNMENT PROPERTY Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Firm-fixed-price contract type suggests predictable costs for the government. 3. Contract duration of approximately 1.5 years indicates a short-term need. 4. The award is a modification to an existing contract, suggesting continuity of service. 5. No small business set-aside was applied to this contract. 6. The contract falls under Biological Product manufacturing, a critical health sector.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its sole-source nature and the specialized field of biological product manufacturing. The raw dollar amount of $38.4 million over roughly 1.5 years suggests a significant investment in maintaining the smallpox license. Without comparable sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is difficult. However, the firm-fixed-price structure provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to unique capabilities, intellectual property, or existing infrastructure. The lack of competition means the government did not benefit from a bidding process that could drive down prices.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government's ability to negotiate the best possible price was limited by the sole-source award.

Public Impact

The Centers for Disease Control and Prevention (CDC) benefits from the continued maintenance of the smallpox license. Ensures the availability and regulatory compliance of critical biological products. The contract supports the ongoing readiness and public health security related to smallpox. Maintains the infrastructure and expertise necessary for managing biological product licenses.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification process.
Specialized nature of biological product manufacturing may limit contractor pool and increase reliance on a single entity.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract modification suggests a stable, ongoing relationship for a critical service.
Focus on maintaining a vital public health license.

Sector Analysis

This contract operates within the Biological Product (except Diagnostic) Manufacturing sector, a highly specialized and regulated area critical for public health and biodefense. The market for such services is often characterized by a limited number of highly qualified firms due to stringent regulatory requirements and the need for specialized expertise and facilities. Spending in this sector is driven by national security, public health initiatives, and the need for preparedness against biological threats. Comparable spending benchmarks are difficult to establish due to the unique nature of biological product licensing and maintenance.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The nature of specialized biological product manufacturing often favors larger, established firms with the necessary infrastructure and regulatory compliance. This means that opportunities for small businesses within this specific contract are likely limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Disease Control and Prevention (CDC), a component of the Department of Health and Human Services (HHS). As a sole-source award, the justification for its necessity and the contractor's performance would be subject to internal HHS review and potentially oversight from relevant government accountability offices. Transparency regarding the specific justification for the sole-source award and performance metrics would be key to assessing accountability.

Related Government Programs

Smallpox Vaccine Production
Biodefense Preparedness Programs
Biological Product Regulation and Licensing
Public Health Emergency Response

Risk Flags

Sole-source award limits competition and potentially increases cost.
Lack of transparency regarding specific sole-source justification.
High dependency on a single contractor for a critical function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $38.4 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC. SMALLPOX LICENSE MAITENANCE - MOD TO ADD CLAUSE 52.245-1 - GOVERNMENT PROPERTY

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 $38.4 million.

What is the period of performance?

Start: 2017-09-21. End: 2019-01-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is sole-source. While the specific justification is not detailed in the snippet, sole-source awards are typically made when only one responsible source is available or capable of providing the required product or service. For biological product licensing and maintenance, this could be due to unique intellectual property, specialized manufacturing capabilities, existing infrastructure, or critical dependencies on the incumbent contractor's knowledge and processes. A formal justification document would normally be required by federal acquisition regulations outlining these specific reasons.

How does the $38.4 million award compare to historical spending on smallpox license maintenance?

The provided data snippet does not contain historical spending information for smallpox license maintenance. To conduct such a comparison, one would need to access historical contract databases (like FPDS or USASpending.gov) for the Centers for Disease Control and Prevention (CDC) or the Department of Health and Human Services (HHS) related to 'Smallpox License Maintenance' or similar keywords over several fiscal years. This would allow for an analysis of trends, fluctuations, and the overall investment in this critical area.

What are the key performance indicators (KPIs) for Emergent BioDefense Operations Lansing LLC under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for Emergent BioDefense Operations Lansing LLC. Typically, contracts of this nature would include performance standards related to the timely and accurate maintenance of the smallpox license, adherence to regulatory requirements, and potentially response times for any issues or inquiries. These KPIs would be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS) and would be used by the Contracting Officer's Representative (COR) to monitor contractor performance.

What is the risk associated with relying on a single contractor for critical biological product license maintenance?

The primary risk associated with relying on a single contractor for critical biological product license maintenance is the lack of competition, which can lead to higher costs and reduced incentive for innovation or efficiency. Furthermore, it creates a dependency; if the sole contractor experiences financial difficulties, operational issues, or decides to exit the market, the government could face significant disruption in maintaining the license. This dependency also limits the government's leverage in negotiations and oversight, as switching contractors may be difficult or impossible without substantial lead time and cost.

How does the 'Biological Product (except Diagnostic) Manufacturing' classification impact the contract's scope and requirements?

The 'Biological Product (except Diagnostic) Manufacturing' classification signifies that the contract pertains to the production or maintenance of biological agents or products used for therapeutic, prophylactic, or other medical purposes, excluding those solely for diagnostic use. This classification imposes stringent regulatory requirements, quality control standards (e.g., Good Manufacturing Practices - GMP), and security protocols. It implies that the contractor must possess specialized facilities, expertise, and a robust quality management system to handle and maintain such products or their associated licenses, ensuring safety, efficacy, and compliance with agencies like the FDA and CDC.

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: $38,430,000

Exercised Options: $38,430,000

Current Obligation: $38,430,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSD200200824959I

IDV Type: IDC

Timeline