HHS CDC Awards $1.27 Billion Contract for Childhood Vaccines to Merck Sharp & Dohme Corp
Contract Overview
Contract Amount: $1,273,848,674 ($1.3B)
Contractor: Merck Sharp & Dohme Corp.
Awarding Agency: Department of Health and Human Services
Start Date: 2011-04-01
End Date: 2012-03-31
Contract Duration: 365 days
Daily Burn Rate: $3.5M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: VACCINE FOR CHILDREN 2011
Place of Performance
Location: WEST POINT, MONTGOMERY County, PENNSYLVANIA, 19486
Plain-Language Summary
Department of Health and Human Services obligated $1.27 billion to MERCK SHARP & DOHME CORP. for work described as: VACCINE FOR CHILDREN 2011 Key points: 1. Significant investment in public health, focusing on childhood immunization. 2. Merck Sharp & Dohme Corp. is a major pharmaceutical player, indicating a competitive landscape for vaccine production. 3. The contract's value suggests a substantial need and commitment to vaccine availability. 4. Potential risks include supply chain disruptions and the need for ongoing efficacy monitoring.
Value Assessment
Rating: good
The contract value of $1.27 billion over one year is substantial. Benchmarking against similar large-scale vaccine procurements would be necessary for a precise pricing assessment, but it appears to align with the scale of national immunization programs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting multiple vendors had the opportunity to bid. This method is generally effective in achieving competitive pricing and ensuring the government receives the best value.
Taxpayer Impact: Taxpayer funds are being used to secure essential vaccines, contributing to public health and potentially reducing long-term healthcare costs associated with preventable diseases.
Public Impact
Ensures availability of critical vaccines for children, supporting national immunization goals. Contributes to the prevention of infectious diseases, safeguarding public health. Supports the pharmaceutical industry and associated jobs. Potential for long-term cost savings through disease prevention.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration of one year may require frequent re-competition.
- Reliance on a single manufacturer for a large volume of vaccines.
- Potential for price increases in future contract renewals.
Positive Signals
- Awarded under full and open competition.
- Firm fixed price contract provides cost certainty.
- Significant investment in a critical public health need.
Sector Analysis
The pharmaceutical and biotechnology sector is characterized by high R&D costs, stringent regulatory requirements, and significant market competition. Spending on vaccines falls under healthcare procurement, a consistently large area of government expenditure.
Small Business Impact
This contract appears to be awarded to a large corporation, Merck Sharp & Dohme Corp. There is no immediate indication of specific provisions or subcontracting opportunities for small businesses within this data, which is common for large-scale pharmaceutical procurements.
Oversight & Accountability
The Centers for Disease Control and Prevention (CDC) is responsible for overseeing public health programs, including vaccine procurement. Oversight would focus on ensuring product quality, timely delivery, and adherence to contract terms.
Related Government Programs
- Biological Product (except Diagnostic) Manufacturing
- Department of Health and Human Services Contracting
- Centers for Disease Control and Prevention Programs
Risk Flags
- Potential for single-source dependency in future procurements.
- Vulnerability to global supply chain disruptions.
- Need for robust quality assurance and monitoring.
- Risk of price escalation in subsequent contract periods.
Tags
biological-product-except-diagnostic-man, department-of-health-and-human-services, pa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $1.27 billion to MERCK SHARP & DOHME CORP.. VACCINE FOR CHILDREN 2011
Who is the contractor on this award?
The obligated recipient is MERCK SHARP & DOHME CORP..
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 $1.27 billion.
What is the period of performance?
Start: 2011-04-01. End: 2012-03-31.
What is the historical pricing trend for this specific vaccine or similar childhood vaccines procured by the government?
Analyzing historical pricing data for this vaccine and comparable childhood vaccines is crucial. It helps determine if the current $1.27 billion award represents a fair market price or if there's evidence of price inflation. Understanding past competition levels and contract types can also shed light on price discovery effectiveness over time.
What are the specific risks associated with relying on a single supplier for such a critical public health resource?
Reliance on a single supplier, even a reputable one like Merck, carries inherent risks. These include potential supply chain disruptions due to manufacturing issues, natural disasters, or geopolitical events. It also limits negotiating leverage for future contracts and could stifle innovation if alternative suppliers are not encouraged.
How effectively does this contract contribute to the long-term goal of childhood immunization rates and disease prevention?
This contract's effectiveness hinges on ensuring the procured vaccines are distributed efficiently and administered to the target population, thereby increasing immunization rates. Its success is measured not just by the transaction but by the downstream impact on public health outcomes, such as reduced incidence of vaccine-preventable diseases.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Merck & CO., Inc. (UEI: 054554290)
Address: 770 SUMNEYTOWN PIKE, WEST POINT, PA, 19486
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,418,359,152
Exercised Options: $3,418,359,152
Current Obligation: $1,273,848,674
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2011-04-01
Current End Date: 2012-03-31
Potential End Date: 2012-03-31 00:00:00
Last Modified: 2022-01-17
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