HHS awards $977M contract for pharmaceutical preparations to Pfizer Inc
Contract Overview
Contract Amount: $976,909,702 ($976.9M)
Contractor: Pfizer Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2012-04-01
End Date: 2013-03-31
Contract Duration: 364 days
Daily Burn Rate: $2.7M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: VFC 2012
Place of Performance
Location: COLLEGEVILLE, MONTGOMERY County, PENNSYLVANIA, 19426
Plain-Language Summary
Department of Health and Human Services obligated $976.9 million to PFIZER INC. for work described as: VFC 2012 Key points: 1. Significant contract value of $977 million awarded. 2. Pfizer Inc. is the sole awardee, indicating potential lack of broader competition. 3. The contract is for pharmaceutical preparation manufacturing, a critical sector. 4. Fixed-price contract type may offer cost certainty but could limit flexibility.
Value Assessment
Rating: good
The contract value of $977 million is substantial. Benchmarking against similar pharmaceutical preparation contracts would be necessary to fully assess pricing, but the fixed-price nature suggests an attempt at cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as full and open competition, only Pfizer Inc. was awarded the contract. Further investigation is needed to understand if other bids were received and why Pfizer was the sole awardee. This could impact price discovery.
Taxpayer Impact: The large contract value means taxpayer funds are significantly allocated. Ensuring competitive pricing and efficient delivery is crucial for maximizing taxpayer value.
Public Impact
Ensures supply of essential pharmaceutical preparations for public health. Potential for significant economic impact on the awarded company and its supply chain. Highlights the government's reliance on major pharmaceutical manufacturers for critical supplies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clarity on why only one awardee from full and open competition.
- Potential for price inflation if competition was not fully realized.
Positive Signals
- Contract awarded for essential pharmaceutical preparations.
- Firm fixed-price contract type can provide cost predictability.
Sector Analysis
This contract falls within the pharmaceutical manufacturing sector, which is characterized by high R&D costs, stringent regulations, and significant market concentration. Government spending in this area is critical for public health initiatives.
Small Business Impact
The data does not indicate any specific set-aside for small businesses. Large contracts in this sector are typically awarded to major corporations like Pfizer Inc., limiting direct opportunities for small businesses unless they are subcontractors.
Oversight & Accountability
Oversight would focus on contract performance, quality control of pharmaceutical preparations, and adherence to the firm fixed-price terms. The Centers for Disease Control and Prevention (CDC) would likely be responsible for monitoring.
Related Government Programs
- Pharmaceutical Preparation Manufacturing
- Department of Health and Human Services Contracting
- Centers for Disease Control and Prevention Programs
Risk Flags
- Potential for unexercised competition.
- Lack of detailed pricing justification.
- Dependence on a single large supplier.
- Need for robust quality assurance.
Tags
pharmaceutical-preparation-manufacturing, department-of-health-and-human-services, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $976.9 million to PFIZER INC.. VFC 2012
Who is the contractor on this award?
The obligated recipient is PFIZER 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 $976.9 million.
What is the period of performance?
Start: 2012-04-01. End: 2013-03-31.
What was the justification for awarding the contract to a single vendor despite being listed as full and open competition?
Further investigation into the solicitation documents and award rationale is required. It's possible that only one vendor met all the stringent technical requirements, or that the competition process, while open, did not yield multiple competitive bids. Understanding this is key to assessing if the government received the best possible value.
How does the awarded price compare to market benchmarks for similar pharmaceutical preparations?
A comprehensive price analysis against industry benchmarks is essential. Factors such as the specific drug formulations, quantities, and contract duration need to be considered. Without this comparison, it's difficult to definitively state if the $977 million represents fair and reasonable pricing for the goods and services procured.
What is the potential impact on drug availability and pricing if this contract is not renewed or is awarded differently in the future?
The impact could be significant given the scale of the contract. A disruption in supply could affect public health programs reliant on these preparations. Future pricing could also be influenced by the competitive landscape and the government's procurement strategy, potentially leading to increased costs if competition is reduced.
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: Pfizer Inc (UEI: 001326495)
Address: 500 ARCOLA RD, COLLEGEVILLE, PA, 19426
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,734,510,000
Exercised Options: $1,734,510,000
Current Obligation: $976,909,702
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2012-04-01
Current End Date: 2013-03-31
Potential End Date: 2013-03-31 00:00:00
Last Modified: 2019-04-30
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