HHS awarded $366M for pediatric vaccines, with GlaxoSmithKline as the sole awardee under full and open competition

Contract Overview

Contract Amount: $365,979,531 ($366.0M)

Contractor: Glaxosmithkline Holdings (americas) Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2009-04-01

End Date: 2010-03-31

Contract Duration: 364 days

Daily Burn Rate: $1.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 00HCVGBC-2009-68751 - GSK VFC PEDIATRIC VACCINE CONTRACT

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19102, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $366.0 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC. for work described as: 00HCVGBC-2009-68751 - GSK VFC PEDIATRIC VACCINE CONTRACT Key points: 1. The contract value represents a significant investment in public health, specifically for pediatric immunization programs. 2. While competed fully and openly, the award went to a single contractor, raising questions about the breadth of market participation. 3. The contract's duration of one year suggests a need for regular re-evaluation of market conditions and pricing. 4. The fixed-price nature of the contract provides cost certainty for the government, shifting performance risk to the contractor. 5. This award falls within the Pharmaceutical Preparation Manufacturing sector, a critical area for national health security. 6. The contract's success hinges on the reliable supply of high-quality pediatric vaccines to meet public health demands.

Value Assessment

Rating: good

The contract value of approximately $366 million for a one-year period for pediatric vaccines appears reasonable given the critical nature of the product and the scale of national immunization programs. Benchmarking against similar large-scale vaccine procurements by the CDC would provide a more precise value-for-money assessment. The firm fixed-price structure offers predictability, but the absence of multiple bids in the final award warrants scrutiny to ensure competitive pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, with five bids received and only one award made, it suggests that while the competition was broad initially, GlaxoSmithKline was ultimately selected as the most advantageous offer. The level of competition, while present, did not result in multiple awards, which could imply specific technical or supply chain requirements that favored a single provider.

Taxpayer Impact: Taxpayers benefit from the assurance of a qualified supplier for essential pediatric vaccines. The competitive process, even with a single award, aims to secure the best possible price and performance for public health needs.

Public Impact

Children across the nation benefit from access to essential pediatric vaccines, contributing to disease prevention and public health. The Centers for Disease Control and Prevention (CDC) receives a critical supply of vaccines to support its immunization initiatives. The contract supports the pharmaceutical manufacturing workforce involved in the production and distribution of these vital medical supplies. Geographic impact is national, ensuring vaccine availability across all states and territories for pediatric populations.

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 supplier could create vulnerabilities in the supply chain.
Ensuring consistent quality and efficacy of vaccines throughout the contract period requires robust oversight.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
Firm fixed-price contract provides cost certainty for the government.
Contractor is a well-established pharmaceutical company with a track record in vaccine production.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, a vital component of the healthcare industry focused on producing medicines and vaccines. The global vaccine market is substantial, driven by public health initiatives, disease prevention programs, and emerging health threats. Government contracts like this are crucial for ensuring the availability of essential vaccines, often representing significant portions of a manufacturer's revenue and market share within specific therapeutic areas.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large-value contract awarded to a major pharmaceutical manufacturer, the primary focus is likely on the prime contractor's capabilities. Further investigation into the contractor's subcontracting plan would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC), the awarding agency. Mechanisms likely include regular performance reviews, quality assurance checks on vaccine production and delivery, and adherence to contract terms. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

National Vaccine Program
Pediatric Immunization Programs
Strategic National Stockpile
Public Health Emergency Preparedness

Risk Flags

Single Awardee Risk
Supply Chain Dependency
Price Volatility Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $366.0 million to GLAXOSMITHKLINE HOLDINGS (AMERICAS) INC.. 00HCVGBC-2009-68751 - GSK VFC 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 $366.0 million.

What is the period of performance?

Start: 2009-04-01. End: 2010-03-31.

What is GlaxoSmithKline's historical performance and track record with federal vaccine contracts, particularly with the CDC?

GlaxoSmithKline Holdings (Americas) Inc. has a significant history of supplying vaccines to government agencies, including the CDC. Their track record typically involves large-scale procurements for various vaccine types, including pediatric formulations. Historical data suggests they are a reliable supplier capable of meeting demand for essential vaccines. However, like any large contractor, there may have been instances of minor delivery delays or quality control issues that were addressed through contract management. A thorough review of past contract performance evaluations and any associated corrective actions would provide a more detailed understanding of their specific performance history with federal vaccine programs.

How does the awarded price of approximately $366 million for this one-year pediatric vaccine contract compare to similar procurements or market rates?

Benchmarking the $366 million award requires comparing it to similar large-volume pediatric vaccine procurements by the CDC or other federal agencies over comparable periods. Factors such as the specific vaccines included, the quantities ordered, and the prevailing market prices at the time of award are crucial. Without access to detailed pricing data for comparable contracts or current market analyses for these specific vaccines, a precise comparison is difficult. However, given the scale and critical nature of pediatric vaccines, this figure represents a substantial but potentially justifiable investment. The firm fixed-price nature suggests the government sought cost certainty, and the competitive bidding process, even with a single awardee, aims to secure favorable pricing.

What are the primary risks associated with relying on a single contractor, GlaxoSmithKline, for this significant pediatric vaccine supply?

The primary risks associated with relying on a single contractor for a critical supply like pediatric vaccines include potential supply chain disruptions, manufacturing issues, or quality control failures at the contractor's facility. If GlaxoSmithKline experiences production problems, natural disasters affecting their plants, or unforeseen logistical challenges, the national vaccine supply could be jeopardized, impacting public health. Furthermore, a sole awardee scenario, even from a full and open competition, can reduce leverage for future price negotiations and potentially lead to higher costs in subsequent contract periods if competition does not re-emerge. Robust contingency planning and strong contract management by the CDC are essential to mitigate these risks.

How effective is the current contract in ensuring the consistent availability and quality of pediatric vaccines for national immunization programs?

The effectiveness of this contract in ensuring consistent availability and quality hinges on several factors. The firm fixed-price structure incentivizes the contractor to meet delivery schedules and quality standards to avoid penalties or non-payment. The CDC's oversight mechanisms, including quality assurance protocols and performance monitoring, are critical for verifying vaccine efficacy and safety. The fact that this is a one-year contract suggests a regular evaluation cycle, allowing for adjustments if issues arise. However, the ultimate effectiveness is demonstrated by the actual delivery rates, the absence of widespread vaccine shortages, and the continued success of national immunization programs in reaching target populations.

What have been the historical spending patterns for pediatric vaccines by the CDC, and how does this $366 million award fit within that trend?

Historical spending patterns for pediatric vaccines by the CDC typically show significant, consistent investment due to the ongoing need for childhood immunizations. Annual spending can fluctuate based on vaccine development, public health campaigns, and the introduction of new vaccines or updated recommendations. A $366 million award for a one-year period represents a substantial portion of the CDC's vaccine procurement budget, aligning with the high cost and critical importance of maintaining a robust supply of pediatric vaccines. This figure likely falls within the expected range for large-scale national vaccine contracts, reflecting the ongoing commitment to child health.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM 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, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,015,897,209

Exercised Options: $12,293,931,471

Current Obligation: $365,979,531

Timeline