HHS awarded $50.7M for pediatric flu vaccines, with GlaxoSmithKline securing the contract

Contract Overview

Contract Amount: $50,723,467 ($50.7M)

Contractor: Glaxosmithkline, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2015-02-06

End Date: 2016-02-28

Contract Duration: 387 days

Daily Burn Rate: $131.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 2015-2016 PEDIATRIC FLU VACCINES

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27709

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $50.7 million to GLAXOSMITHKLINE, LLC for work described as: 2015-2016 PEDIATRIC FLU VACCINES Key points: 1. The contract value of $50.7 million represents a significant investment in public health preparedness. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and access to essential vaccines. 3. Performance context is key, as timely delivery of vaccines directly impacts public health outcomes. 4. Sector positioning highlights the critical role of pharmaceutical manufacturing in national health security. 5. Value-for-money assessment will focus on the unit cost of vaccines compared to market benchmarks and historical trends.

Value Assessment

Rating: good

The awarded amount of $50.7 million for pediatric flu vaccines appears reasonable given the scale of public health needs. Benchmarking against similar large-scale vaccine procurements by HHS or other federal agencies would provide further insight into value for money. The firm fixed-price contract type suggests that pricing was determined upfront, which can offer cost certainty. However, a detailed analysis of the per-unit cost compared to commercial market rates and previous federal contracts is necessary for a comprehensive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 5 bidders suggests a healthy level of competition for this significant public health contract. This competitive environment is generally expected to drive down prices and encourage innovation, leading to better value for the government and taxpayers.

Taxpayer Impact: Full and open competition typically results in more competitive pricing, potentially saving taxpayer dollars compared to sole-source or limited competition awards. It also ensures that the government has access to the best available products and services.

Public Impact

Children across the nation benefit from access to essential pediatric flu vaccines. The contract ensures the supply of vaccines critical for preventing seasonal influenza outbreaks. Geographic impact is nationwide, ensuring vaccine availability across all states and territories. Workforce implications include support for manufacturing jobs within the pharmaceutical sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future contract renewals.
Dependence on a single supplier for a critical public health resource.
Ensuring equitable distribution across diverse geographic regions.

Positive Signals

Successful procurement through full and open competition.
Firm fixed-price contract provides cost certainty.
Contract supports a vital public health initiative.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a critical component of the healthcare industry, responsible for producing essential medicines and vaccines. This contract falls within the broader category of public health and biodefense preparedness. Comparable spending benchmarks would involve looking at other large-scale vaccine procurements by federal agencies like HHS, DOD, or VA, as well as international health organizations. The market for influenza vaccines is substantial, with significant annual demand driven by public health recommendations.

Small Business Impact

While this contract was awarded to GlaxoSmithKline, LLC, a large pharmaceutical company, the analysis of small business participation is crucial. Federal regulations often require prime contractors to outline subcontracting plans for small businesses. It is important to ascertain if specific set-asides or subcontracting goals were included in this procurement to ensure opportunities for small businesses within the pharmaceutical supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside within the Centers for Disease Control and Prevention (CDC), a division of HHS. Accountability measures are embedded in the contract terms, including delivery schedules and quality standards. Transparency is generally maintained through contract award databases and public reporting requirements. The HHS Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Pediatric Vaccine Procurement
Influenza Prevention Programs
National Biodefense Strategy
Pharmaceutical Supply Chain Management
Public Health Emergency Preparedness

Risk Flags

Potential supply chain disruption risk
Dependence on single supplier
Price volatility in future procurements

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $50.7 million to GLAXOSMITHKLINE, LLC. 2015-2016 PEDIATRIC FLU VACCINES

Who is the contractor on this award?

The obligated recipient is GLAXOSMITHKLINE, LLC.

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 $50.7 million.

What is the period of performance?

Start: 2015-02-06. End: 2016-02-28.

What is the historical spending trend for pediatric flu vaccines by the Department of Health and Human Services?

Analyzing historical spending on pediatric flu vaccines by HHS reveals trends in demand, pricing, and supplier reliance. Over the past decade, federal spending on influenza vaccines has fluctuated based on factors such as pandemic threats, vaccine efficacy, and public health campaigns. For instance, during years with heightened flu activity or specific public health emergencies, procurement volumes and associated costs tend to increase. Examining contracts awarded prior to this $50.7 million award to GlaxoSmithKline would show whether this represents an increase or decrease in spending, and whether the supplier base has remained consistent or diversified. Understanding these patterns is crucial for budget forecasting and ensuring long-term supply chain stability for essential pediatric immunizations.

How does the per-unit cost of these pediatric flu vaccines compare to commercial market rates and previous federal contracts?

A key aspect of value-for-money assessment is benchmarking the per-unit cost of the pediatric flu vaccines procured under this $50.7 million contract. Comparing this unit price to prevailing commercial market rates provides insight into whether the federal government is achieving favorable pricing through its purchasing power. Additionally, comparing it to unit costs from previous federal contracts for similar vaccines, adjusted for inflation, helps determine if prices have remained stable, increased, or decreased over time. Significant deviations from historical or commercial benchmarks could indicate potential issues with pricing, competition, or the specific formulation of the vaccine. This analysis is vital for ensuring taxpayer funds are used efficiently and effectively for public health initiatives.

What are the specific performance metrics and quality standards outlined in the contract with GlaxoSmithKline?

The contract with GlaxoSmithKline for pediatric flu vaccines would typically include detailed performance metrics and quality standards to ensure the efficacy and timely delivery of the product. These metrics often encompass adherence to delivery schedules, vaccine potency and stability, packaging requirements, and compliance with FDA regulations. Quality standards would likely align with Good Manufacturing Practices (GMP) and specific requirements set forth by the Centers for Disease Control and Prevention (CDC) for vaccine procurement. Failure to meet these metrics or standards could result in penalties, contract termination, or impact future contract awards. Robust oversight of these performance indicators is essential for safeguarding public health.

What is GlaxoSmithKline's track record in fulfilling federal vaccine contracts, particularly for pediatric formulations?

GlaxoSmithKline (GSK) is a major global pharmaceutical company with a significant history of supplying vaccines to governments worldwide, including the United States. Their track record in fulfilling federal vaccine contracts, particularly for pediatric formulations, is generally extensive. This includes supplying seasonal influenza vaccines and other childhood immunizations. Assessing their past performance would involve reviewing contract histories for on-time delivery, product quality, and responsiveness to federal requirements. While large companies typically have robust systems, any past issues related to supply chain disruptions, recalls, or performance shortfalls would be relevant considerations for evaluating the risk associated with this current contract.

What are the potential risks associated with relying on a single supplier for a significant portion of the nation's pediatric flu vaccine supply?

Relying on a single supplier, even one as established as GlaxoSmithKline, for a substantial portion of the nation's pediatric flu vaccine supply presents several potential risks. These include supply chain vulnerabilities, where disruptions due to manufacturing issues, raw material shortages, natural disasters, or geopolitical events could lead to vaccine shortages. There's also a risk of reduced price competition in future procurements if alternative suppliers are not actively engaged or capable of scaling up production. Furthermore, dependence on one entity could limit the government's leverage in negotiating terms and pricing. Diversifying the supplier base or ensuring robust contingency plans are in place are critical risk mitigation strategies for public health security.

How does this contract align with broader federal strategies for pandemic preparedness and vaccine security?

This contract for pediatric flu vaccines directly aligns with broader federal strategies for pandemic preparedness and vaccine security by ensuring a consistent supply of a critical public health tool. Seasonal influenza vaccination is a cornerstone of preventing widespread illness and reducing the burden on healthcare systems, which is also crucial during potential pandemic scenarios. By securing a large quantity of pediatric vaccines, the government is bolstering its ability to protect vulnerable populations and maintain public health infrastructure. This procurement also contributes to vaccine security by establishing reliable channels for obtaining essential medical countermeasures, which is a key objective in national biodefense and public health emergency preparedness plans.

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: Glaxosmithkline PLC (UEI: 238980408)

Address: 5 MOORE DR, RESEARCH TRIANGLE PARK, NC, 27709

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

Financial Breakdown

Contract Ceiling: $66,809,719

Exercised Options: $66,809,719

Current Obligation: $50,723,467

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline