HHS awarded $43.4M for pharmaceutical preparations, with 5 bidders competing

Contract Overview

Contract Amount: $43,411,670 ($43.4M)

Contractor: Novartis Vaccines and Diagnostics, 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: $119.3K/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: EMERYVILLE, ALAMEDA County, CALIFORNIA, 94608

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $43.4 million to NOVARTIS VACCINES AND DIAGNOSTICS, INC. for work described as: VFC 2012 Key points: 1. The contract value appears reasonable given the scope of pharmaceutical preparation manufacturing. 2. Full and open competition suggests a healthy market with potential for competitive pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of one year provides a defined period for delivery and evaluation. 5. The contract falls within the pharmaceutical manufacturing sector, a critical area for public health. 6. The award to Novartis Vaccines and Diagnostics indicates a focus on specialized capabilities.

Value Assessment

Rating: good

The contract value of $43.4 million for pharmaceutical preparation manufacturing over one year seems aligned with industry standards for specialized production. Benchmarking against similar contracts for vaccine or drug component manufacturing would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract is a positive indicator, as it shifts risk to the contractor and encourages cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bidders vying for the opportunity. The presence of multiple bidders suggests a competitive marketplace for these pharmaceutical preparations. This level of competition is generally favorable for price discovery and ensures that the government receives offers from various qualified sources, potentially leading to a more advantageous price.

Taxpayer Impact: The robust competition indicates that taxpayer dollars are likely being used efficiently, as multiple companies competed to offer the best value. This reduces the risk of overpayment and encourages contractors to submit competitive bids.

Public Impact

The primary beneficiaries are likely public health initiatives supported by the Centers for Disease Control and Prevention (CDC), which require these pharmaceutical preparations. The services delivered involve the manufacturing of specific pharmaceutical products, crucial for disease prevention or treatment. The geographic impact is primarily within California, where the contractor is located, but the ultimate impact extends nationwide through public health programs. Workforce implications include employment within the pharmaceutical manufacturing sector, particularly at Novartis's facilities in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the contractor faces unforeseen production issues.
Reliance on a single contractor for a specific pharmaceutical preparation could pose a risk if alternatives are not readily available.

Positive Signals

Fixed-price contract structure limits financial risk for the government.
Full and open competition suggests a strong pool of qualified suppliers.
Contract duration is clearly defined, allowing for performance monitoring.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a vital component of the healthcare industry, characterized by high regulatory standards and specialized production capabilities. This contract fits within the broader landscape of government procurement for essential medical supplies and pharmaceuticals. Comparable spending benchmarks would typically be found in contracts for vaccine components, drug intermediates, or other specialized biological or chemical preparations.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The award to a large corporation like Novartis suggests that the primary focus was on specialized manufacturing capabilities rather than small business participation. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award information.

Oversight & Accountability

Oversight for this contract would typically fall under the Centers for Disease Control and Prevention (CDC) contracting officers and program managers. Accountability measures would be tied to the terms and conditions of the firm fixed-price definitive contract, including delivery schedules and quality specifications. Transparency is generally maintained through federal procurement databases, though specific performance details might be sensitive.

Related Government Programs

CDC Vaccine Procurement
Pharmaceutical Manufacturing Contracts
Public Health Supply Chain

Risk Flags

Potential for supply chain vulnerability
Reliance on contractor's quality control

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $43.4 million to NOVARTIS VACCINES AND DIAGNOSTICS, INC.. VFC 2012

Who is the contractor on this award?

The obligated recipient is NOVARTIS VACCINES AND DIAGNOSTICS, 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 $43.4 million.

What is the period of performance?

Start: 2012-04-01. End: 2013-03-31.

What is the track record of Novartis Vaccines and Diagnostics, Inc. with federal contracts, particularly in pharmaceutical preparation manufacturing?

Novartis Vaccines and Diagnostics, Inc. has a history of engaging with federal agencies, often in the realm of vaccine development and pharmaceutical supply. Their track record typically involves large-scale manufacturing and distribution, aligning with the nature of this contract. Specific performance metrics on past federal contracts would require a deeper dive into contract databases, but their established presence in the industry suggests a capacity to meet government requirements. Past awards may have been for similar or related pharmaceutical products, indicating familiarity with federal procurement processes and quality standards.

How does the $43.4 million contract value compare to similar pharmaceutical preparation manufacturing contracts awarded by the government?

The $43.4 million contract value for a one-year period for pharmaceutical preparation manufacturing is substantial and suggests a significant scope of work. To benchmark effectively, one would need to compare it against contracts for similar types of preparations (e.g., vaccines, specialized biologics, drug intermediates) awarded around the same time period. Factors such as volume, complexity of manufacturing, and specific quality requirements heavily influence pricing. Without direct comparisons for identical preparations, it's challenging to definitively state if it's high or low, but it falls within the expected range for large-scale, specialized pharmaceutical production for a federal agency.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential supply chain disruptions, manufacturing quality issues, or delays in delivery. Mitigation strategies are embedded within the contract structure. The firm fixed-price nature shifts financial risk to the contractor, incentivizing timely and quality delivery. The full and open competition with five bidders suggests a robust market, reducing reliance on a single source. Furthermore, government oversight by the CDC would involve monitoring performance against contract specifications and potentially invoking penalties for non-compliance. Quality assurance protocols inherent in pharmaceutical manufacturing also serve as a critical risk mitigation factor.

What is the expected effectiveness of the pharmaceutical preparations to be manufactured under this contract?

The effectiveness of the pharmaceutical preparations is directly tied to their intended use within public health programs managed by the CDC. While the specific nature of the preparations isn't detailed, they are presumed to be critical components for vaccines, diagnostics, or therapeutic agents aimed at disease prevention or treatment. The government's procurement process, especially through agencies like the CDC, involves stringent quality control and specification requirements to ensure that the manufactured products meet necessary efficacy and safety standards. The effectiveness is therefore measured by their contribution to public health outcomes and their adherence to rigorous scientific and regulatory benchmarks.

How does this contract align with historical federal spending patterns in pharmaceutical preparation manufacturing?

This contract aligns with historical federal spending patterns, which consistently show significant investment in pharmaceutical and biological product manufacturing to support public health initiatives, defense readiness, and medical research. Agencies like HHS, through its sub-agencies such as the CDC and NIH, regularly award contracts for the development, manufacturing, and procurement of essential medical supplies and pharmaceuticals. The value of $43.4 million is within the range of large-scale manufacturing contracts, reflecting the ongoing need for specialized production capabilities to meet national health objectives. Fluctuations in spending are often driven by public health emergencies, new research findings, or shifts in national health priorities.

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: Novartis AG (UEI: 485609796)

Address: 4560 HORTON ST, EMERYVILLE, CA, 94608

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $492,720,000

Exercised Options: $492,720,000

Current Obligation: $43,411,670

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline