HHS awarded $601.6M for Anthrax Vaccine to Emergent BioDefense Operations, a sole-source contract

Contract Overview

Contract Amount: $601,603,251 ($601.6M)

Contractor: Emergent Biodefense Operations Lansing LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2016-12-08

End Date: 2022-06-30

Contract Duration: 2,030 days

Daily Burn Rate: $296.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF ANTHRAX VACCINE

Place of Performance

Location: LANSING, INGHAM County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $601.6 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC for work described as: IGF::OT::IGF ANTHRAX VACCINE Key points: 1. The contract value represents a significant investment in biodefense preparedness. 2. Sole-source award suggests limited market alternatives or specific contractor capabilities. 3. Contract duration of over 6 years indicates a long-term need for the product. 4. The firm fixed-price structure shifts cost risk to the contractor. 5. Geographic location in Michigan may point to specific manufacturing or operational considerations. 6. The absence of small business involvement warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific biodefense application. Without competitive bids, it's difficult to ascertain if the $601.6 million represents optimal value for money. The firm fixed-price contract type, however, provides cost certainty for the government. Further analysis would require understanding the market for anthrax vaccines and the specific capabilities of Emergent BioDefense Operations Lansing LLC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent national security needs. The lack of competition limits price discovery and may result in higher costs compared to a fully competed contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process. The government relied on negotiation to establish the price, which may not reflect the lowest possible market rate.

Public Impact

The primary beneficiaries are the U.S. population, through enhanced biodefense capabilities against anthrax threats. The contract ensures the supply of anthrax vaccines, a critical component of national health security. The geographic impact is primarily centered in Lansing, Michigan, where the contractor is located, potentially supporting local jobs and the regional economy. Workforce implications may include specialized roles in vaccine manufacturing, quality control, and biopharmaceutical research and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
Sole-source awards can create vendor lock-in, limiting future flexibility and potentially increasing long-term costs.
Dependence on a single supplier for a critical vaccine poses supply chain risks.

Positive Signals

Ensures a critical supply of a vital biodefense product.
Firm fixed-price contract provides cost predictability for the government.
Long contract duration suggests a sustained commitment to national security needs.

Sector Analysis

The biopharmaceutical sector, particularly in the area of vaccines and biodefense, is characterized by high R&D costs, stringent regulatory requirements, and significant government investment. This contract fits within the broader landscape of federal efforts to maintain stockpiles of essential medical countermeasures against biological threats. Comparable spending benchmarks are difficult to establish due to the specialized nature of anthrax vaccines and the limited number of manufacturers.

Small Business Impact

This contract was not awarded with a small business set-aside, and the data indicates the prime contractor is not a small business. There is no explicit information on subcontracting plans for small businesses. Further review would be needed to determine if opportunities exist for small businesses to participate in the supply chain or provide supporting services for this contract, which could enhance the overall economic impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and its relevant program offices, potentially including the Office of the Assistant Secretary for Preparedness and Response (ASPR). Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited by the sole-source nature, but contract modifications and performance reports would be subject to review.

Related Government Programs

Strategic National Stockpile
Biomedical Advanced Research and Development Authority (BARDA) contracts
Department of Defense biodefense procurements
Public Health Emergency Preparedness grants

Risk Flags

Sole-source award
Potential for lack of competition impact on price
Dependence on single supplier for critical asset

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $601.6 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC. IGF::OT::IGF ANTHRAX VACCINE

Who is the contractor on this award?

The obligated recipient is EMERGENT BIODEFENSE OPERATIONS LANSING LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $601.6 million.

What is the period of performance?

Start: 2016-12-08. End: 2022-06-30.

What is the track record of Emergent BioDefense Operations Lansing LLC in delivering biodefense products?

Emergent BioDefense Operations Lansing LLC, a subsidiary of Emergent BioSolutions, has a history of producing vaccines and therapeutics for biodefense applications. The company has been a key supplier for the U.S. government's Strategic National Stockpile. However, Emergent BioSolutions has faced scrutiny in the past regarding manufacturing quality control issues with other products, such as the COVID-19 vaccine. For this specific anthrax vaccine contract, detailed performance metrics and historical delivery success rates would need to be examined to fully assess their track record in fulfilling this particular requirement.

How does the pricing of this anthrax vaccine contract compare to market rates or similar government procurements?

Direct comparison of pricing is challenging due to the sole-source nature of this $601.6 million contract and the specialized market for anthrax vaccines. Without competitive bids, it's difficult to establish a definitive market rate. Historical government contracts for similar biodefense vaccines, if available and comparable in scale and scope, could offer some benchmark. However, the unique requirements and limited supplier base for anthrax vaccines mean that prices may inherently be higher than for more common pharmaceutical products. A thorough value-for-money assessment would require detailed cost breakdowns and an understanding of the production costs and R&D investments involved.

What are the primary risks associated with a sole-source award for a critical biodefense product?

The primary risks associated with a sole-source award for a critical biodefense product like the anthrax vaccine include potential overpricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and vendor lock-in, which can limit future flexibility and potentially increase long-term costs. Furthermore, reliance on a single supplier creates significant supply chain vulnerability; any disruption in the contractor's operations could have severe national security implications. The government also has less leverage in negotiating terms and pricing compared to a competitive scenario.

How effective has this contract been in ensuring the availability of anthrax vaccines for national security purposes?

The effectiveness of this contract in ensuring the availability of anthrax vaccines hinges on the contractor's consistent delivery performance against the agreed-upon schedule and quality standards. Given the contract's duration (2016-2022), it aimed to provide a sustained supply. Assessing effectiveness would require reviewing delivery records, stockpile levels, and any reported shortages or delays. The fact that the contract was awarded and extended suggests a perceived need and an attempt to secure supply, but actual effectiveness depends on the realized outcomes of vaccine availability and readiness.

What are the historical spending patterns for anthrax vaccines by the U.S. government?

Historical spending on anthrax vaccines by the U.S. government has been significant, driven by national biodefense strategies and the need to maintain adequate stockpiles in the Strategic National Stockpile (SNS). Prior to this $601.6 million contract, the government has awarded contracts for anthrax vaccine production and procurement to Emergent BioSolutions and its predecessors for many years. Spending levels have fluctuated based on perceived threats, stockpile replenishment needs, and the expiration of existing vaccine batches. This contract represents a substantial, long-term investment within that broader historical context of ensuring preparedness against biological threats.

What is the total value of contracts awarded to Emergent BioDefense Operations Lansing LLC for this specific product?

The provided data indicates a single definitive contract awarded to Emergent BioDefense Operations Lansing LLC with a total award amount of $601,603,251.40. This contract has an end date of June 30, 2022. It is important to note that this figure represents the total value obligated under this specific contract vehicle. There may have been previous or subsequent contracts, or modifications to this contract, that could alter the total cumulative spending with this entity for anthrax vaccines. A comprehensive analysis would require searching for all related contract actions.

Industry Classification

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

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 2016N17905

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emergent Biosolutions Inc.

Address: 3500 N MARTIN LUTHER KING JR BLVD # 1, LANSING, MI, 48906

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

Financial Breakdown

Contract Ceiling: $1,174,464,339

Exercised Options: $1,174,464,339

Current Obligation: $601,603,251

Actual Outlays: $21,188,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline