HHS awarded $29.4M for HIV vaccine R&D, with NIH overseeing a 11-year contract

Contract Overview

Contract Amount: $29,352,671 ($29.4M)

Contractor: Novartis Vaccines and Diagnostics, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2005-08-31

End Date: 2016-12-31

Contract Duration: 4,140 days

Daily Burn Rate: $7.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 22

Pricing Type: COST NO FEE

Sector: R&D

Official Description: TAS::75 0885::TAS HIV DESIGN AND DEVELOPMENT TEAMS, PART A - PREVENTATIVE VACCINES

Place of Performance

Location: EMERYVILLE, ALAMEDA County, CALIFORNIA, 94608

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $29.4 million to NOVARTIS VACCINES AND DIAGNOSTICS, INC. for work described as: TAS::75 0885::TAS HIV DESIGN AND DEVELOPMENT TEAMS, PART A - PREVENTATIVE VACCINES Key points: 1. Contract value represents significant investment in a critical public health area. 2. Long duration suggests a complex, multi-phase research and development effort. 3. The definitive contract type indicates a focus on research outcomes over fixed deliverables. 4. The absence of small business set-asides warrants further examination of market participation. 5. Performance period spans over a decade, allowing for substantial scientific progress. 6. The contract's focus on preventative vaccines aligns with national health priorities.

Value Assessment

Rating: fair

The total award of $29.4 million over 11 years for HIV vaccine R&D appears moderate for a long-term, high-risk research endeavor. Benchmarking is difficult without specific details on the research scope and milestones. However, given the complexity and uncertainty inherent in vaccine development, the cost per year is approximately $2.67 million, which seems reasonable for specialized scientific research. Further analysis would require comparing the specific research objectives and achieved outcomes against industry standards for similar R&D efforts.

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 were likely considered. This approach generally promotes competitive pricing and encourages a wider pool of qualified contractors. The fact that it was competed suggests that the government sought the best value and technical approach for this critical research area. The number of bidders and the evaluation criteria would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at a competitive price and encourages innovation among potential offerors.

Public Impact

The primary beneficiaries are individuals at risk of HIV infection, through the development of a preventative vaccine. The service delivered is advanced research and development in a critical area of public health. The geographic impact is national, focusing on the development of a vaccine that could have global implications. Workforce implications include highly skilled scientists, researchers, and technicians in the biotechnology and pharmaceutical sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess value for money over the long contract duration.
The 'Cost No Fee' (CNF) contract type, while common in R&D, can sometimes offer less incentive for cost control compared to fixed-price arrangements.
The extended performance period (11 years) increases the risk of scope creep or shifts in research priorities without adequate re-competition.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Focus on a critical public health issue (HIV prevention) aligns with significant societal benefit.
Long-term nature of the contract allows for sustained focus on a complex scientific challenge.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on life sciences and biotechnology. The market for vaccine development is highly specialized, involving a limited number of large pharmaceutical companies and research institutions. Spending in this area is driven by public health needs and scientific advancements. Comparable spending benchmarks would typically be found in other government-funded vaccine R&D programs or large-scale biomedical research initiatives.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates 'sb' is false. This suggests that the primary contractor is likely a larger entity with established capabilities in vaccine research and development. While this ensures access to significant resources, it also means that opportunities for smaller, innovative firms to participate directly in this specific contract may be limited. Subcontracting opportunities could exist, but their extent would depend on the prime contractor's strategy and the nature of the research tasks.

Oversight & Accountability

Oversight is likely managed by the National Institutes of Health (NIH), a component of HHS, through program officers and contracting specialists. Accountability measures would be tied to research milestones and reporting requirements outlined in the contract. Transparency is generally maintained through contract databases and public health reporting, although specific research details may be proprietary. Inspector General jurisdiction would apply to ensure the integrity of the contracting process and fund utilization.

Related Government Programs

NIH HIV Vaccine Research Programs
National Institute of Allergy and Infectious Diseases (NIAID) Funding
Biomedical Advanced Research and Development Authority (BARDA) Initiatives
Centers for Disease Control and Prevention (CDC) HIV Prevention Efforts

Risk Flags

Long contract duration increases risk of obsolescence or shifting priorities.
Cost No Fee contract type may offer less incentive for cost efficiency.
HIV vaccine development is inherently high-risk with uncertain outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $29.4 million to NOVARTIS VACCINES AND DIAGNOSTICS, INC.. TAS::75 0885::TAS HIV DESIGN AND DEVELOPMENT TEAMS, PART A - PREVENTATIVE VACCINES

Who is the contractor on this award?

The obligated recipient is NOVARTIS VACCINES AND DIAGNOSTICS, INC..

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 $29.4 million.

What is the period of performance?

Start: 2005-08-31. End: 2016-12-31.

What specific research milestones were established for this 11-year contract, and how were they tracked?

The contract details for specific research milestones are typically proprietary and not publicly disclosed in detail. However, for a long-term R&D contract like this, milestones would likely be phased, progressing from preclinical studies, through various stages of clinical trials (Phase I, II, III), and potentially to manufacturing process development. Progress would be tracked through regular technical reports, data submissions, and review meetings between the contractor (Novartis Vaccines and Diagnostics) and the contracting officers' representatives (CORs) or program scientists at NIH. Failure to meet key milestones could result in contract modifications, reduced funding, or termination. The 'Cost No Fee' (CNF) nature of the contract implies that payment is based on incurred costs, provided the work is performed satisfactorily according to the contract's statement of work and any defined milestones.

How does the $29.4 million total award compare to other government-funded HIV vaccine R&D efforts?

Direct comparison of the $29.4 million total award to other specific HIV vaccine R&D contracts is challenging without access to a comprehensive database of all such awards, including their duration and scope. However, the U.S. government, primarily through NIH and NIAID, invests hundreds of millions of dollars annually in HIV/AIDS research, including vaccine development. This $29.4 million award over 11 years represents a significant, long-term commitment to a specific project within that broader portfolio. It suggests a focused effort on a particular vaccine candidate or platform. Given the high cost and long timelines associated with developing any vaccine, especially one as complex as an HIV vaccine, this figure appears to be within a reasonable range for a substantial, multi-year research endeavor funded by the government.

What are the primary risks associated with a 'Cost No Fee' (CNF) contract for vaccine R&D?

The primary risks associated with a 'Cost No Fee' (CNF) contract, particularly for complex R&D like vaccine development, revolve around cost control and contractor motivation. Since the contractor is reimbursed for allowable costs and receives no additional fee or profit, there might be less incentive to aggressively manage expenses compared to a cost-plus-award-fee or fixed-price contract. The government bears the financial risk if costs escalate beyond initial projections. Furthermore, without a fee tied to performance or specific outcomes, the contractor's motivation might be primarily driven by fulfilling the research objectives rather than optimizing efficiency or seeking innovative cost-saving measures. However, CNF contracts are often used when the scope is uncertain, and the primary goal is to facilitate research by removing profit motive and focusing solely on cost reimbursement for necessary work.

What was the track record of Novartis Vaccines and Diagnostics at the time of this award in 2005?

In 2005, Novartis Vaccines and Diagnostics was a significant player in the global vaccine market. The company had a history of developing and marketing various vaccines, including those for influenza, meningitis, and tick-borne encephalitis. They were known for their research capabilities and manufacturing infrastructure. At the time, they were actively involved in research related to emerging infectious diseases and had established collaborations with academic institutions and government agencies. Their experience in vaccine development, regulatory affairs, and large-scale production would have been key factors considered by NIH during the full and open competition process for this HIV vaccine R&D contract.

How does the 11-year duration of this contract impact the assessment of its value and potential success?

The 11-year duration is characteristic of high-risk, long-term research and development projects, particularly in areas like vaccine development where scientific breakthroughs can take many years. This extended timeline allows for in-depth research, iterative development, and the navigation of complex scientific and regulatory pathways. From a value perspective, it enables sustained focus and investment, potentially leading to significant advancements that might not be achievable with shorter-term funding. However, it also introduces risks such as potential shifts in scientific understanding, changes in public health priorities, or the contractor's evolving business strategy. Assessing the value requires evaluating progress against long-term goals and adapting to new scientific information over the contract's lifespan, rather than solely focusing on immediate deliverables.

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 › Community and Regional Development R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 22

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Glaxosmithkline PLC (UEI: 238980408)

Address: 350 MASSACHUSETTS AVE, CAMBRIDGE, MA, 02139

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,352,671

Exercised Options: $29,352,671

Current Obligation: $29,352,671

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline