HHS awarded $116M for pediatric flu vaccines, with Sanofi Pasteur as the sole supplier

Contract Overview

Contract Amount: $116,258,558 ($116.3M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2012-03-15

End Date: 2013-02-28

Contract Duration: 350 days

Daily Burn Rate: $332.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF PEDIATRIC VACCINE FLU VFC

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $116.3 million to SANOFI VACCINES US INC. for work described as: IGF::OT::IGF PEDIATRIC VACCINE FLU VFC Key points: 1. The contract represents a significant investment in public health infrastructure for vaccine procurement. 2. Sole-source nature raises questions about price negotiation and potential for cost savings. 3. Performance period was relatively short, suggesting potential for re-competition or contract adjustments. 4. The award was a firm-fixed-price contract, providing cost certainty for the government. 5. This procurement falls under the broader category of biological product manufacturing. 6. The contract was awarded by the CDC, a key agency in disease prevention and control.

Value Assessment

Rating: fair

The total award of $116.3 million for pediatric flu vaccines appears substantial. Without specific unit cost data or comparison to other flu vaccine contracts from the same period, it's difficult to definitively benchmark value for money. However, given the critical nature of vaccine supply and the sole-source award, the price may reflect market conditions and the contractor's unique position. Further analysis would require comparing the per-dose cost to other government or commercial flu vaccine purchases.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Sanofi Pasteur, was considered. This approach bypasses the typical competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The absence of multiple bidders means there was no direct price competition to drive down costs.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the cost savings that typically arise from a competitive bidding process. This could result in a higher overall expenditure for the government.

Public Impact

Children across the United States benefit from access to essential pediatric flu vaccines. The Centers for Disease Control and Prevention (CDC) ensures the availability of these vaccines for public health programs. The contract supports the national strategy for influenza prevention and mitigation. This procurement contributes to the stability of the vaccine supply chain, particularly for vulnerable populations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the sole-source justification process.
Potential for price increases in future sole-source renewals.

Positive Signals

Ensures a critical public health need (pediatric flu vaccination) is met.
Firm-fixed-price contract provides budget certainty.
Award to an established vaccine manufacturer suggests reliability of supply.

Sector Analysis

The pharmaceutical and biotechnology sector, particularly vaccine manufacturing, is characterized by high R&D costs, stringent regulatory requirements, and significant market concentration. This contract fits within the biological product manufacturing sub-sector. The market for vaccines is often influenced by public health needs, government procurement policies, and the presence of a few dominant global suppliers. Comparable spending benchmarks would involve analyzing other large-scale vaccine procurements by government agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award was made directly to a large pharmaceutical manufacturer. Therefore, the direct impact on the small business ecosystem is likely minimal, focusing instead on the prime contractor's established supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and its various components, including the Centers for Disease Control and Prevention (CDC). The Inspector General's office within HHS is responsible for auditing and investigating potential fraud, waste, and abuse. Transparency is generally maintained through contract award databases, though the specifics of sole-source justifications may have limited public disclosure.

Related Government Programs

HHS Pediatric Vaccine Programs
CDC Vaccine Procurement
National Vaccine Injury Compensation Program
Biologics, Medical, and Pharmaceutical Agents

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $116.3 million to SANOFI VACCINES US INC.. IGF::OT::IGF PEDIATRIC VACCINE FLU VFC

Who is the contractor on this award?

The obligated recipient is SANOFI VACCINES US 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 $116.3 million.

What is the period of performance?

Start: 2012-03-15. End: 2013-02-28.

What is the historical spending pattern for pediatric flu vaccines by the CDC?

Historical spending data for pediatric flu vaccines by the CDC would reveal trends in procurement volume, pricing, and contractor relationships over time. Analyzing this data could identify periods of significant price increases or shifts in awarded contractors. For instance, if this $116 million award is an outlier compared to previous years, it might warrant further investigation into the reasons behind the higher cost. Conversely, if it aligns with a consistent upward trend, it could indicate broader market dynamics or increased demand. Understanding these patterns is crucial for assessing the long-term value and sustainability of the vaccine procurement strategy.

How does the per-unit cost of these pediatric flu vaccines compare to other government or commercial contracts?

Benchmarking the per-unit cost of these pediatric flu vaccines against similar contracts is essential for evaluating value for money. If the per-dose price paid by the CDC to Sanofi Pasteur is significantly higher than what other government agencies (like the Department of Defense) or large commercial entities pay for comparable vaccines, it would suggest potential overpayment. Conversely, if the price is in line with or lower than market rates, it would indicate a fair deal. This comparison requires access to detailed pricing information for other contracts, which may not always be publicly available, especially for sole-source awards.

What specific justification was provided for the sole-source award to Sanofi Pasteur?

The justification for a sole-source award is critical for understanding why competitive bidding was bypassed. Typically, justifications cite unique capabilities, lack of alternatives, urgent and compelling needs, or specific government requirements that only one contractor can meet. For Sanofi Pasteur, this might relate to specific formulations of the pediatric flu vaccine, established manufacturing processes, or existing supply chain integration with the CDC. A detailed review of this justification would shed light on whether the sole-source determination was appropriate and if alternative solutions were adequately considered.

What is Sanofi Pasteur's track record in fulfilling government vaccine contracts?

Sanofi Pasteur's track record in fulfilling government vaccine contracts provides insight into their reliability and performance. This includes examining past performance evaluations, any instances of delivery delays, product quality issues, or contract disputes. A history of consistent, high-quality delivery would lend confidence to the current award. Conversely, a record marred by performance problems might raise concerns about the government's ability to secure a stable supply of vaccines under this contract. Analyzing past contract performance is a key component of risk assessment.

What are the potential risks associated with relying on a single supplier for pediatric flu vaccines?

Relying on a single supplier, as in this sole-source contract, introduces several risks. Foremost is the potential for supply chain disruptions due to manufacturing issues, natural disasters, or geopolitical events affecting the sole provider. This could lead to vaccine shortages, impacting public health. Additionally, the lack of competition can reduce the government's leverage in price negotiations, potentially leading to higher costs over time. There's also a risk of vendor lock-in, making it difficult to switch suppliers even if better alternatives emerge. Mitigating these risks often involves robust inventory management and contingency planning.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

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: Sanofi Pasteur Vaxdesign Corp (UEI: 739980787)

Address: 1 DISCOVERY DR, SWIFTWATER, PA, 18370

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

Financial Breakdown

Contract Ceiling: $1,990,809,671

Exercised Options: $368,858,559

Current Obligation: $116,258,558

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline