Pfizer Inc. awarded $1.03B contract for childhood vaccines by HHS CDC

Contract Overview

Contract Amount: $1,033,136,950 ($1.0B)

Contractor: Pfizer Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2014-04-01

End Date: 2015-03-31

Contract Duration: 364 days

Daily Burn Rate: $2.8M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VACCINE FOR CHILDREN (VFC) 2014

Place of Performance

Location: COLLEGEVILLE, MONTGOMERY County, PENNSYLVANIA, 19426

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.03 billion to PFIZER INC for work described as: VACCINE FOR CHILDREN (VFC) 2014 Key points: 1. Contract awarded at a firm fixed price, indicating predictable costs. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of 364 days aligns with typical vaccine supply cycles. 4. Pfizer's established role in vaccine manufacturing provides performance context. 5. The contract falls within the pharmaceutical preparation manufacturing sector. 6. Awarded by the Centers for Disease Control and Prevention, a key health agency.

Value Assessment

Rating: good

The contract value of $1.03 billion for a year's supply of childhood vaccines appears to be within the expected range for large-scale pharmaceutical procurement. Benchmarking against similar large-volume vaccine contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, implying that multiple qualified bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing. The number of bids received (5) indicates a healthy level of interest from the market.

Taxpayer Impact: Full and open competition helps ensure taxpayer dollars are used efficiently by driving down prices through market forces.

Public Impact

Children across the United States benefit from access to essential vaccines. Ensures the continued availability of critical immunizations to prevent childhood diseases. The Centers for Disease Control and Prevention is the primary recipient agency. Supports the pharmaceutical manufacturing workforce involved in vaccine production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future contract renewals if competition decreases.
Reliance on a single large supplier could pose supply chain risks if not managed proactively.

Positive Signals

Pfizer's extensive experience in vaccine development and manufacturing.
The firm fixed-price contract provides cost predictability.
Awarded through full and open competition, suggesting market validation of pricing.

Sector Analysis

This contract operates within the pharmaceutical preparation manufacturing sector, a critical component of the healthcare industry. The global vaccine market is substantial, driven by public health initiatives and the need for disease prevention. This contract represents a significant portion of federal spending on childhood immunizations, ensuring broad access.

Small Business Impact

There is no explicit indication of small business set-asides for this large-scale pharmaceutical contract. Given the specialized nature and volume of vaccine production, it is unlikely that small businesses would be primary awardees. Subcontracting opportunities for small businesses might exist in ancillary services or components, but are not detailed here.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Centers for Disease Control and Prevention would monitor performance and compliance. Transparency is generally maintained through contract databases, though specific performance metrics are not detailed here. The Inspector General for HHS would have oversight jurisdiction.

Related Government Programs

Vaccine Purchase Program
National Vaccine Injury Compensation Program
HHS Pharmaceutical Contracts
CDC Procurement

Risk Flags

Potential for supply chain disruption
Limited competition in future renewals
Price volatility risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.03 billion to PFIZER INC. VACCINE FOR CHILDREN (VFC) 2014

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 $1.03 billion.

What is the period of performance?

Start: 2014-04-01. End: 2015-03-31.

What is Pfizer's track record with government vaccine contracts?

Pfizer Inc. has a long-standing and extensive history of supplying vaccines to government agencies, including the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). They are a major global manufacturer of various vaccines, including those for influenza, pneumococcal disease, and COVID-19. Their track record includes fulfilling large-volume orders, navigating complex regulatory requirements, and contributing significantly to national immunization programs. Past performance data, often available through federal procurement databases, would detail their success rates, delivery timeliness, and quality compliance on previous contracts, providing a basis for assessing their reliability in fulfilling this current award.

How does the $1.03 billion value compare to previous years' spending on the VFC program?

The $1.03 billion awarded to Pfizer for the Vaccine for Children (VFC) program in 2014 represents a significant investment. To assess its comparability, one would need to examine historical spending data for the VFC program over several preceding years. Factors influencing year-to-year variations include the number of vaccines procured, changes in vaccine prices, shifts in childhood vaccination schedules, and the overall demand influenced by public health trends and outbreaks. A detailed analysis would involve comparing this figure against the average annual expenditure for the VFC program and identifying any substantial deviations that might indicate increased procurement needs, price escalations, or changes in contracting strategy.

What are the primary risks associated with a single large award to one manufacturer for essential vaccines?

A primary risk associated with awarding a large contract for essential vaccines to a single manufacturer like Pfizer is supply chain vulnerability. Any disruption in Pfizer's production capabilities, whether due to manufacturing issues, raw material shortages, geopolitical events, or natural disasters, could lead to shortages of critical vaccines, impacting public health. Another risk is reduced negotiating leverage for the government in future procurements if competition diminishes or if the awarded price is perceived as suboptimal over time. Furthermore, over-reliance on one supplier might stifle innovation from other potential manufacturers who could otherwise compete for market share.

How effective is the VFC program in ensuring childhood vaccination rates?

The Vaccines for Children (VFC) program is widely considered highly effective in ensuring childhood vaccination rates in the United States. Established in 1994, the program provides vaccines at no cost to eligible children, including those who are uninsured, underinsured, Medicaid-eligible, or American Indian/Alaska Native. By removing the financial barrier to vaccination, the VFC program has been instrumental in achieving and maintaining high immunization coverage levels for routine childhood vaccines, thereby preventing outbreaks of vaccine-preventable diseases and protecting public health. Its success is often measured by the sustained high coverage rates for key childhood immunizations.

What is the typical duration and structure for large federal vaccine contracts?

Large federal vaccine contracts, such as the one awarded to Pfizer, typically have a duration of one to five years, often structured as definitive contracts with options for renewal. The contract type is frequently 'Firm Fixed Price' (FFP), which establishes a set price for the goods or services, providing cost certainty for the government. 'Full and Open Competition' is the preferred method for awarding these contracts to ensure the best value is obtained through market competition. The structure aims to balance the need for a stable supply of critical vaccines with the government's responsibility to secure competitive pricing and manage risks effectively over the contract period.

Are there specific performance metrics or quality standards mandated in this contract?

While the provided data does not detail specific performance metrics or quality standards, federal contracts for pharmaceuticals, especially vaccines, invariably include stringent requirements. These typically encompass adherence to Good Manufacturing Practices (GMP), timely delivery schedules, specific packaging and labeling requirements, and maintaining vaccine efficacy and safety throughout the supply chain. The Centers for Disease Control and Prevention (CDC) would likely have established protocols for monitoring vaccine quality, storage, and distribution. Performance would be assessed against these contractual obligations, with potential penalties for non-compliance.

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

Solicitation ID: 2014N15784

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 235 E 42ND ST, NEW YORK, NY, 10017

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

Financial Breakdown

Contract Ceiling: $1,124,400,000

Exercised Options: $1,124,400,000

Current Obligation: $1,033,136,950

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline