Toxicologic Pathology Associates Inc. contract for pathology research valued at $17.7M over 8 years

Contract Overview

Contract Amount: $17,717,828 ($17.7M)

Contractor: Toxicologic Pathology Associates Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2004-11-01

End Date: 2012-11-12

Contract Duration: 2,933 days

Daily Burn Rate: $6.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PATHOLOGY AND PATHOLOGY RELATED

Place of Performance

Location: JEFFERSON, JEFFERSON County, ARKANSAS, 72079

State: Arkansas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.7 million to TOXICOLOGIC PATHOLOGY ASSOCIATES INC for work described as: PATHOLOGY AND PATHOLOGY RELATED Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risks. 3. The duration of the contract (2933 days) indicates a long-term need for these specialized services. 4. The North American Industry Classification System (NAICS) code 541710 points to significant investment in R&D. 5. The contract was awarded by the Food and Drug Administration (FDA), a key agency within HHS. 6. The contract's value of $17.7M over its term suggests a substantial commitment to toxicologic pathology research.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services rendered and comparable contracts. The Cost Plus Fixed Fee (CPFF) structure means the government pays the contractor's allowable costs plus a fixed fee, which can sometimes lead to higher overall costs compared to fixed-price contracts if cost controls are not robust. However, CPFF contracts are often used when the scope of work is not well-defined, allowing for flexibility in research and development. The total value of $17.7 million over approximately 8 years averages to about $2.2 million per year, which may be reasonable for specialized R&D services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding process where multiple companies likely had the opportunity to compete for the work. The presence of two bidders (as indicated by 'no': 2) is on the lower side for a full and open competition, which could potentially limit the intensity of price discovery. However, the fact that it was competed at all is a positive sign for price reasonableness.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. While only two bidders participated, the competitive process itself likely led to a more favorable outcome than a sole-source award.

Public Impact

The Food and Drug Administration (FDA) benefits from this contract by securing specialized toxicologic pathology research services. This research is crucial for evaluating the safety of products regulated by the FDA, ultimately protecting public health. The services delivered likely involve complex laboratory analysis and scientific interpretation to assess potential health risks. The contract supports scientific expertise and potentially jobs within the specialized field of toxicologic pathology. The geographic impact is primarily within Arkansas, where the contractor is located, but the findings have national public health implications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed carefully.
Limited competition (2 bidders) might reduce the pressure on pricing.
The long contract duration could present risks if research priorities shift or technology advances rapidly.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
The contract supports critical R&D for a key regulatory agency (FDA).
The contractor has a long-standing relationship with the government, suggesting performance stability.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (NAICS 541710). This sector is characterized by significant investment in innovation and scientific discovery. The market for toxicologic pathology services is specialized, often involving contract research organizations (CROs) that support pharmaceutical, biotechnology, and government agencies in product safety testing. Comparable spending benchmarks would typically be found within R&D budgets of agencies like the FDA, NIH, or DoD, focusing on preclinical and safety testing services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and the contractor, Toxicologic Pathology Associates Inc., is likely not a small business given the contract value and duration. There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract appears minimal, though the prime contractor's own size and potential for subcontracting would need further investigation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Food and Drug Administration (FDA), the awarding agency. As a Cost Plus Fixed Fee contract, rigorous financial oversight is necessary to ensure that allowable costs are reasonable and allocable, and that the fixed fee is earned. Transparency would be facilitated through contract reporting mechanisms and potentially through public disclosures of research findings, depending on the nature of the work. The Inspector General for the Department of Health and Human Services would have jurisdiction for audits and investigations.

Related Government Programs

FDA Research and Development Contracts
Toxicology and Safety Testing Services
Life Sciences Research Grants
Biomedical Research Support Contracts
Contract Research Organization Services

Risk Flags

Cost Plus Fixed Fee contract type may lead to higher costs than fixed-price contracts.
Limited number of bidders (2) in a full and open competition could reduce price competition.
Long contract duration (8 years) carries risks of changing research priorities or technological obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.7 million to TOXICOLOGIC PATHOLOGY ASSOCIATES INC. PATHOLOGY AND PATHOLOGY RELATED

Who is the contractor on this award?

The obligated recipient is TOXICOLOGIC PATHOLOGY ASSOCIATES INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2004-11-01. End: 2012-11-12.

What specific toxicologic pathology services were rendered under this contract?

The provided data indicates the contract was for 'PATHOLOGY AND PATHOLOGY RELATED' services under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). While specific service details are not available in the summary data, toxicologic pathology typically involves the study of adverse effects of chemical, physical, or biological agents on living organisms. This often includes conducting preclinical safety studies (e.g., acute, subchronic, chronic toxicity studies), genotoxicity assays, carcinogenicity studies, and reproductive/developmental toxicity studies. These services are critical for regulatory submissions to agencies like the FDA to assess the safety profile of new drugs, medical devices, or other regulated products.

How does the $17.7 million contract value compare to similar FDA contracts for R&D in toxicologic pathology?

Comparing the $17.7 million value over approximately 8 years (2933 days) requires context on the scope and duration of similar FDA contracts. The annual average of roughly $2.2 million per year suggests a significant, long-term research effort. The FDA frequently procures R&D services, including toxicology studies, to support its mission. Without access to a comprehensive database of comparable contracts, it's difficult to definitively benchmark this value. However, given the specialized nature of toxicologic pathology and the extensive testing required for regulatory approval, this value appears within a plausible range for substantial, multi-year research projects supporting drug or device safety evaluations.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a CPFF contract for R&D, like the one awarded to Toxicologic Pathology Associates Inc., stem from its cost-reimbursement nature. For the government, the main risk is that the final cost could exceed initial estimates, as the contractor is reimbursed for all allowable costs. While the fixed fee provides some cost certainty for the contractor's profit, it doesn't cap the total project cost. This structure can potentially reduce the contractor's incentive to control costs rigorously, as their profit margin is fixed regardless of the actual expenses incurred. For the contractor, risks include the possibility that allowable costs might be disputed or disallowed, impacting their reimbursement, and the need for meticulous record-keeping to justify all expenditures.

What is the significance of the NAICS code 541710 for this contract?

The North American Industry Classification System (NAICS) code 541710 signifies 'Research and Development in the Physical, Engineering, and Life Sciences.' This classification indicates that the contract's core purpose is scientific investigation and discovery within fields relevant to health and biology. For the FDA, contracting under this code means they are investing in cutting-edge research necessary for understanding disease mechanisms, evaluating product safety and efficacy, and developing new regulatory science approaches. It highlights the contract's role in advancing scientific knowledge that underpins the FDA's regulatory decision-making and public health protection mandate.

How does the contract's duration (2933 days) impact its overall value and risk profile?

A duration of 2933 days, approximately 8 years, signifies a long-term commitment to a specific research area or set of studies. This extended timeline allows for in-depth research, longitudinal studies, and the development of complex scientific capabilities. From a value perspective, it suggests a sustained need for these specialized services by the FDA. However, long-duration contracts also introduce risks. Scientific priorities can shift, new technologies may emerge rendering older methods obsolete, or the research objectives might evolve. Managing such a long-term contract requires continuous oversight to ensure alignment with current scientific needs and regulatory requirements, and to adapt to potential changes in the research landscape.

What does the 'AR' contract status and 'ARKANSAS' location imply?

The 'AR' status likely indicates the contract is 'Active' or 'Awarded,' signifying it was in effect during the period analyzed. The location 'ARKANSAS' points to the state where the contractor, Toxicologic Pathology Associates Inc., is based. This suggests that the research activities, or at least the administrative base for them, are situated in Arkansas. While the research findings have national implications for public health and FDA regulations, the direct operational footprint of this contract is geographically tied to the contractor's location in Arkansas.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 220 NORTH MARKET STREET, FREDERICK, MD, 06

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,213,578

Exercised Options: $17,717,828

Current Obligation: $17,717,828

Timeline