HHS awards $39.3M contract for biotechnology R&D, with a 15-year performance period

Contract Overview

Contract Amount: $39,264,405 ($39.3M)

Contractor: Siga Technologies, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2008-09-01

End Date: 2024-02-08

Contract Duration: 5,638 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 23

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CONTRACT AWARD HHSN272200800041C UNDER BAA NIH-NIAID-DMID-08-20

Place of Performance

Location: CORVALLIS, BENTON County, OREGON, 97333

State: Oregon Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $39.3 million to SIGA TECHNOLOGIES, INC. for work described as: CONTRACT AWARD HHSN272200800041C UNDER BAA NIH-NIAID-DMID-08-20 Key points: 1. Contract value represents a significant investment in biotechnology research and development. 2. Long performance period suggests a sustained need for the services provided. 3. The contract was awarded under a Broad Agency Announcement (BAA), indicating a focus on innovative research. 4. The contractor, SIGA Technologies, Inc., has a substantial history with this award. 5. The definitive contract type implies a clear scope of work and deliverables. 6. The cost-plus-fixed-fee structure allows for flexibility while maintaining cost control.

Value Assessment

Rating: good

The total award amount of $39.3 million over approximately 15 years suggests a moderate annual spend. Benchmarking this against similar R&D contracts in biotechnology requires detailed analysis of specific research areas and project scopes. However, the long duration indicates a consistent, albeit not exceptionally high, annual investment. The cost-plus-fixed-fee (CPFF) pricing structure is common for R&D where exact costs are uncertain, but it necessitates careful oversight to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a Broad Agency Announcement (BAA) with full and open competition. This indicates that multiple potential offerors were solicited and evaluated, fostering a competitive environment. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was intended and likely achieved, which can lead to better pricing and innovative solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider pool of contractors to bid, potentially driving down costs and improving the quality of services through competitive pressure.

Public Impact

The primary beneficiaries are likely the research community and public health, through advancements in biotechnology. Services delivered include research and development in the field of biotechnology, potentially leading to new medical countermeasures or diagnostic tools. The geographic impact is national, supporting federal research initiatives. Workforce implications include support for scientists, researchers, and technical staff involved in the R&D process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential complacency if not actively managed.
Cost-plus-fixed-fee contracts require diligent oversight to prevent cost overruns.
Reliance on a single contractor for an extended period might limit exposure to newer technologies or approaches.

Positive Signals

The award signifies a long-term commitment to a specific R&D area, providing stability for the contractor and consistent progress.
Full and open competition suggests a thorough evaluation process, likely selecting a capable contractor.
The BAA mechanism is designed to solicit innovative research, indicating a forward-looking approach.

Sector Analysis

This contract falls within the Research and Development in Biotechnology sector, a critical area for public health and national security. The market for biotechnology R&D is characterized by high innovation, significant investment, and a mix of government, academic, and private sector players. Comparable spending benchmarks would vary widely depending on the specific research focus, but federal investment in this area is substantial and ongoing, supporting advancements in areas like infectious diseases, therapeutics, and diagnostics.

Small Business Impact

The provided data does not indicate any specific small business set-asides for this contract. As a large definitive contract awarded under a BAA, it is likely that prime contracting opportunities for small businesses would be limited unless they are subcontractors. Further analysis would be needed to determine if subcontracting plans exist and how they might impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within HHS/ASPR. The BAA mechanism itself implies a level of scientific and programmatic oversight. Inspector General jurisdiction would apply to investigate fraud, waste, and abuse. Transparency is generally maintained through contract award databases, though specific project details may be proprietary.

Related Government Programs

Biotechnology Research Programs
National Institutes of Health (NIH) Contracts
Biodefense Research
Medical Countermeasures Development
Advanced Research Projects Agency for Health (ARPA-H)

Risk Flags

Long contract duration requires sustained oversight.
CPFF structure necessitates careful cost management.
Potential for contractor performance drift over extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $39.3 million to SIGA TECHNOLOGIES, INC.. CONTRACT AWARD HHSN272200800041C UNDER BAA NIH-NIAID-DMID-08-20

Who is the contractor on this award?

The obligated recipient is SIGA TECHNOLOGIES, INC..

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 $39.3 million.

What is the period of performance?

Start: 2008-09-01. End: 2024-02-08.

What is the specific research focus of this contract awarded to SIGA Technologies, Inc.?

The contract HHSN272200800041C was awarded under a Broad Agency Announcement (BAA) from the NIH/NIAID/DMID, specifically for 'Research and Development in Biotechnology' under NAICS code 541711. While the general area is biotechnology R&D, the precise focus would be detailed in the Statement of Work (SOW) or project plan associated with the award. Given the awarding agencies (NIAID - National Institute of Allergy and Infectious Diseases, DMID - Division of Microbiology and Infectious Diseases), it is highly probable that the research pertains to infectious diseases, potential biodefense applications, or the development of medical countermeasures against such threats. SIGA Technologies has historically been involved in areas like antiviral drug development.

How does the total contract value of $39.3 million compare to typical R&D investments in biotechnology?

The total contract value of $39.3 million spread over approximately 15 years (September 2008 to February 2024) translates to an average annual value of roughly $2.6 million. This figure is moderate for R&D investments in biotechnology. Large-scale drug development programs or major platform technology initiatives can easily run into hundreds of millions or even billions of dollars. However, for specific research projects, feasibility studies, or early-stage development under a BAA, this level of funding is substantial and indicative of a significant, long-term research effort. It suggests a focused project rather than a broad, enterprise-wide research initiative.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract of this duration?

The primary risks with a CPFF contract, especially one spanning over 15 years, revolve around cost control and contractor performance. For the government, there's a risk that the 'cost plus' component could lead to inefficiencies or scope creep if not rigorously monitored, potentially exceeding the intended value. The 'fixed fee' provides the contractor with a guaranteed profit margin, which can sometimes disincentivize aggressive cost reduction. Over such a long period, ensuring the contractor maintains focus on the original objectives, adapts to evolving scientific landscapes, and delivers high-quality, relevant research outcomes requires continuous and proactive oversight. Contractor performance drift and potential obsolescence of research approaches are also significant long-term risks.

What does the 'full and open competition' designation imply for the selection of SIGA Technologies, Inc.?

The 'full and open competition' designation means that the government solicited proposals from all responsible sources and that all responsible sources were permitted to submit a proposal. This implies that SIGA Technologies, Inc. was selected after a competitive process where their proposal was deemed the best value among multiple submissions. It suggests that the government actively sought out a range of potential contractors, evaluated them based on defined criteria (which would include technical merit, past performance, and price/cost), and ultimately chose SIGA Technologies based on that evaluation. This process is designed to ensure the government obtains the most advantageous solution for its needs.

How has federal spending in biotechnology R&D evolved, and where does this contract fit?

Federal spending in biotechnology R&D has generally seen consistent growth over the past two decades, driven by national security concerns (biodefense), public health initiatives (disease research, pandemic preparedness), and economic development goals. Agencies like NIH, DoD, and HHS are major funders. This $39.3 million contract, awarded in 2008 and ending in 2024, represents a specific, long-term investment within this broader trend. It aligns with federal priorities in areas like infectious disease research and preparedness, as indicated by the awarding agencies (NIAID/DMID). Its duration suggests a strategic commitment to a particular research pathway or technology development, fitting into the government's ongoing efforts to build scientific capacity and address critical health challenges.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: HHSN272200800041C

Offers Received: 23

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 35 E 62ND ST, NEW YORK, NY, 10065

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,264,405

Exercised Options: $39,264,405

Current Obligation: $39,264,405

Actual Outlays: $1,274,253

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline