NIH's $13M contract for clinical site monitoring awarded to PPD Development LP over 11 years

Contract Overview

Contract Amount: $13,002,687 ($13.0M)

Contractor: PPD Development LP

Awarding Agency: Department of Health and Human Services

Start Date: 2004-09-15

End Date: 2015-11-16

Contract Duration: 4,079 days

Daily Burn Rate: $3.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IMMUNE TOLERANCE NETWORK - CLINICAL SITE MONITORING GROUP

Place of Performance

Location: WILMINGTON, NEW HANOVER County, NORTH CAROLINA, 28401

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $13.0 million to PPD DEVELOPMENT LP for work described as: IMMUNE TOLERANCE NETWORK - CLINICAL SITE MONITORING GROUP Key points: 1. The contract spanned over a decade, indicating a long-term need for clinical site monitoring services. 2. Awarded under full and open competition, suggesting a robust selection process. 3. The cost-plus-fixed-fee structure implies that contractor costs were reimbursed plus a fixed fee, with potential for cost overruns. 4. The contract's duration and value suggest a significant investment in research infrastructure. 5. Monitoring services are critical for ensuring the integrity and reliability of clinical trial data.

Value Assessment

Rating: fair

The contract's total value of approximately $13 million over 11 years averages to about $1.18 million annually. Benchmarking this against similar long-term clinical monitoring contracts is challenging without more specific service details. However, the duration suggests a stable, albeit potentially high, cost for consistent oversight. The cost-plus-fixed-fee (CPFF) pricing structure, while common for research, can sometimes lead to less cost efficiency compared to fixed-price contracts if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 6 bidders suggests a competitive environment for these services. A higher number of bidders generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) and the broader medical research community, which rely on accurate clinical trial data. Services delivered include the monitoring of clinical trial sites to ensure compliance with protocols, regulations, and ethical standards. The geographic impact is likely national, supporting research conducted across various clinical sites within the United States. Workforce implications include the employment of clinical research associates, project managers, and other support staff by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type carries inherent risks of cost overruns if not meticulously managed.
The extended duration of over 11 years could mask inefficiencies or a lack of adaptive management if performance is not continuously evaluated.
Lack of specific performance metrics in the provided data makes it difficult to assess the true value-for-money achieved.

Positive Signals

Awarded under full and open competition with 6 bidders, indicating a competitive process.
The long-term nature of the contract suggests a sustained and reliable partnership for critical research support.
The contract supports the NIH's mission, implying alignment with significant public health research objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically supporting clinical trials. The market for clinical research services is substantial, driven by pharmaceutical companies, biotechnology firms, and government health agencies. PPD Development LP is a major player in this space, offering a wide range of clinical research organization (CRO) services. Comparable spending benchmarks would typically involve analyzing annual budgets of other large-scale clinical trial monitoring efforts or the overall CRO market size.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside (ss: false) and the contract was not awarded to a small business (sb: false). Therefore, there are no direct subcontracting implications or impacts on the small business ecosystem stemming from this specific award. The focus was likely on the capabilities and cost-effectiveness of the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers at the National Institutes of Health (NIH). As a government contract, it is subject to federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract databases, though specific performance reviews and audit details may not be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

NIH Clinical Center
National Institute of Allergy and Infectious Diseases (NIAID) programs
Clinical Trial Management Systems
Biomedical Research Support
Contract Research Organizations (CROs)

Risk Flags

Cost-plus-fixed-fee pricing structure
Long contract duration (over 11 years)
Potential for cost overruns inherent in CPFF contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.0 million to PPD DEVELOPMENT LP. IMMUNE TOLERANCE NETWORK - CLINICAL SITE MONITORING GROUP

Who is the contractor on this award?

The obligated recipient is PPD DEVELOPMENT LP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $13.0 million.

What is the period of performance?

Start: 2004-09-15. End: 2015-11-16.

What was the specific nature of the clinical site monitoring services provided under this contract?

The contract supported the Immune Tolerance Network (ITN) Clinical Site Monitoring Group. While specific details are not fully elaborated in the provided data, clinical site monitoring typically involves ensuring that clinical trials are conducted, recorded, and reported in accordance with the study protocol, standard operating procedures, and Good Clinical Practice (GCP) guidelines. This includes verifying data accuracy, patient safety, regulatory compliance, and site adherence to study requirements. The ITN focuses on research related to immune tolerance, which is crucial for understanding and treating autoimmune diseases, transplantation, and allergies.

How does the average annual cost of this contract compare to industry benchmarks for similar services?

The average annual cost of approximately $1.18 million ($13,007,268.54 / 11 years) for clinical site monitoring is difficult to benchmark precisely without detailed service scope and geographic coverage. However, for large, multi-site, long-term clinical trials, this figure can be considered moderate. Major Contract Research Organizations (CROs) often manage budgets in the tens or hundreds of millions for complex global trials. The cost-plus-fixed-fee (CPFF) structure means the government reimbursed PPD's actual costs plus a negotiated fixed fee. The efficiency of this spending depends heavily on PPD's cost management and the NIH's oversight of those costs.

What were the key performance indicators (KPIs) used to evaluate PPD Development LP's performance?

The provided data does not specify the Key Performance Indicators (KPIs) used to evaluate PPD Development LP's performance under this contract. Typically, for clinical site monitoring, KPIs might include metrics such as the number of site visits conducted, timeliness of monitoring reports, identification and resolution of site-level issues, adherence to budget, and compliance with regulatory requirements. Effective oversight by the NIH would involve regular reviews of these (or similar) metrics to ensure the quality and integrity of the clinical trial data being generated.

What is PPD Development LP's track record with government contracts, particularly with NIH?

PPD Development LP (now part of Thermo Fisher Scientific) has a significant history of performing services for government agencies, including the NIH. As a large Contract Research Organization (CRO), they have managed numerous clinical trials and related services. While specific details of past performance on NIH contracts require deeper database searches, their longevity and scale in the CRO industry suggest substantial experience. Government contract databases often contain past performance information, which would have been a factor in the NIH's decision-making process for awarding this contract.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for clinical monitoring?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government bears the financial risk of cost overruns. While the contractor's fee is fixed, their actual costs are reimbursed. If PPD Development LP incurred higher-than-expected costs due to unforeseen challenges in monitoring sites, inefficiencies, or scope creep not adequately controlled, the total expenditure could exceed initial projections. Effective risk mitigation requires robust government oversight, clear definition of reimbursable costs, and strong project management from both the contractor and the agency to ensure costs remain reasonable and necessary.

How did the competition level (6 bidders) influence the final contract price and terms?

A competition involving six bidders generally creates a more favorable environment for the government in terms of price discovery and negotiation. With multiple qualified entities vying for the contract, PPD Development LP likely had to offer competitive pricing and terms to secure the award. This level of competition suggests that the NIH received a range of proposals, allowing them to select the best value based on technical merit, past performance, and cost. It reduces the likelihood of a significantly inflated price that might occur in a sole-source or limited competition scenario.

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: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation ID: NIHNIAIDDAIT0446

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Jaguar Holding Company II

Address: 3151 17TH STREET EXTENSION, WILMINGTON, NC, 28412

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

Financial Breakdown

Contract Ceiling: $18,792,843

Exercised Options: $13,002,687

Current Obligation: $13,002,687

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline