Biomedical R&D contract awarded to Children's Hospital of Philadelphia for over $16.4 million

Contract Overview

Contract Amount: $16,416,844 ($16.4M)

Contractor: THE Children's Hospital of Philadelphia

Awarding Agency: Department of Health and Human Services

Start Date: 2009-08-01

End Date: 2020-06-30

Contract Duration: 3,986 days

Daily Burn Rate: $4.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: COST NO FEE

Sector: R&D

Official Description: BIOMEDICAL (ADVANCED)

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19104

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.4 million to THE CHILDREN'S HOSPITAL OF PHILADELPHIA for work described as: BIOMEDICAL (ADVANCED) Key points: 1. Contract value of $16.4M for biomedical research indicates significant investment in advanced life sciences. 2. The award to a children's hospital suggests a focus on pediatric or specialized biomedical research areas. 3. A long contract duration of nearly 11 years implies a complex, multi-phase research project. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code points to fundamental scientific inquiry. 5. The contract type 'COST NO FEE' suggests the government reimburses allowable costs without an additional profit margin for the contractor. 6. The absence of small business set-aside flags indicates this was not specifically targeted for small business participation.

Value Assessment

Rating: fair

The contract value of $16.4 million for an 11-year biomedical R&D project appears reasonable given the specialized nature of the work. Without specific benchmarks for similar advanced biomedical research contracts, a direct value-for-money assessment is challenging. However, the 'COST NO FEE' contract type suggests that the government is primarily covering direct research expenses, which can be an efficient way to fund complex, long-term scientific endeavors where profit margins are less applicable or harder to define.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 10 bids suggests a healthy level of interest and competition for this biomedical research opportunity. A competitive process generally leads to better price discovery and potentially more innovative solutions, as contractors vie to offer the most compelling proposal.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government's investment in critical research.

Public Impact

This contract directly benefits the biomedical research sector, potentially leading to advancements in medical treatments and understanding. The services delivered are focused on research and development in the physical, engineering, and life sciences, specifically within the 'BIOMEDICAL (ADVANCED)' category. The geographic impact is centered in Pennsylvania, where The Children's Hospital of Philadelphia is located. The contract supports a highly skilled workforce of researchers, scientists, and technical staff involved in advanced biomedical studies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or evolving research needs that may not be fully captured in the initial award.
The 'COST NO FEE' structure requires robust oversight to ensure that all reimbursed costs are allowable and reasonable for the research conducted.
The specialized nature of advanced biomedical research means that success is not guaranteed, posing a risk to the return on investment.

Positive Signals

Award to a reputable institution like The Children's Hospital of Philadelphia suggests a strong track record in relevant research areas.
Full and open competition indicates a thorough vetting process and potential for multiple qualified bidders.
The significant investment signals a commitment to advancing critical scientific knowledge in the biomedical field.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on advanced biomedical sciences. This is a high-growth, high-investment area driven by innovation and the pursuit of medical breakthroughs. Comparable spending benchmarks in this sector are difficult to establish precisely due to the unique nature of R&D projects, but significant government funding is consistently allocated to NIH and other agencies for such critical research.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. Therefore, its direct impact on small businesses is likely limited unless they are involved as subcontractors. The primary beneficiary appears to be the large research institution. There is no explicit information provided regarding subcontracting plans or their impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Institutes of Health (NIH), a component of the Department of Health and Human Services. Given the 'COST NO FEE' structure, rigorous financial oversight is expected to ensure that all reimbursed expenses are directly related to and necessary for the research activities. Transparency is generally maintained through periodic reporting requirements and potential site visits by government program officers.

Related Government Programs

National Institutes of Health (NIH) Research Grants
Biomedical Research and Development
Life Sciences Research Contracts
Advanced Technology Development

Risk Flags

Long contract duration may increase risk of scope creep.
Cost-reimbursement contracts require diligent oversight to ensure cost allowability and reasonableness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.4 million to THE CHILDREN'S HOSPITAL OF PHILADELPHIA. BIOMEDICAL (ADVANCED)

Who is the contractor on this award?

The obligated recipient is THE CHILDREN'S HOSPITAL OF PHILADELPHIA.

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 $16.4 million.

What is the period of performance?

Start: 2009-08-01. End: 2020-06-30.

What is the specific research focus of this $16.4 million contract awarded to The Children's Hospital of Philadelphia?

The contract, awarded by the National Institutes of Health (NIH) under the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences except Biotechnology), is categorized under 'BIOMEDICAL (ADVANCED)'. While the specific research topic is not detailed in the provided data, the 'BIOMEDICAL (ADVANCED)' designation suggests a focus on cutting-edge research in areas such as genetics, molecular biology, advanced diagnostics, novel therapeutics, or complex disease mechanisms, likely with a pediatric or specialized focus given the contractor. The 'COST NO FEE' contract type implies that the government is reimbursing the hospital for its direct research expenses without an additional profit margin, a common approach for long-term, fundamental scientific inquiry where outcomes are uncertain.

How does the contract value of $16.4 million compare to typical biomedical R&D investments by the government?

The contract value of $16.4 million over approximately 11 years (from August 2009 to June 2020) represents a substantial, but not extraordinary, investment for advanced biomedical R&D. The National Institutes of Health (NIH) is the largest single public funder of biomedical research in the world, awarding billions of dollars annually through grants and contracts. While many NIH grants are smaller, large-scale, multi-year contracts for specific research initiatives, especially those involving complex infrastructure or long-term studies, can reach tens of millions of dollars. This contract's value is consistent with significant, focused research projects within the NIH's extensive portfolio, particularly those involving established research institutions.

What are the potential risks associated with a 'COST NO FEE' contract for advanced biomedical research?

A 'COST NO FEE' contract, while potentially efficient for funding uncertain R&D, carries specific risks. The primary risk lies in cost control and oversight; the government reimburses allowable costs incurred by the contractor, meaning robust monitoring is essential to prevent overspending or the inclusion of unallowable expenses. For advanced biomedical research, there's also the inherent risk of scientific failure – the research may not yield the expected results or breakthroughs, despite the investment. The long duration (nearly 11 years) increases the potential for scope creep, where the project's objectives may evolve significantly, requiring careful management to stay within budget and aligned with original goals. Ensuring the contractor maintains high standards of scientific rigor and ethical conduct throughout the extended period is also crucial.

What does the 'full and open competition' with 10 bidders signify for this contract?

The 'full and open competition' designation means that the contract was advertised broadly, allowing any qualified source to submit a proposal. The fact that 10 bidders responded indicates a competitive marketplace for this specific type of advanced biomedical research. This level of competition is generally positive for the government, as it increases the likelihood of receiving proposals that offer strong scientific merit, innovative approaches, and potentially better value. It suggests that the research requirements were clearly defined and attractive enough to elicit significant interest from multiple institutions, fostering price discovery and potentially driving down costs compared to a sole-source award.

How might this contract impact The Children's Hospital of Philadelphia's research capabilities and reputation?

Securing a nearly $16.4 million federal contract, especially one awarded through full and open competition, significantly bolsters The Children's Hospital of Philadelphia's (CHOP) research capabilities and enhances its reputation. Such funding allows for the acquisition of advanced equipment, the hiring of specialized personnel, and the pursuit of long-term, high-impact research projects that might otherwise be unattainable. It validates CHOP's expertise in advanced biomedical research, potentially attracting further funding from other sources, top-tier researchers, and collaborators. Successfully executing this contract over its 11-year duration would further solidify CHOP's position as a leading institution in pediatric and biomedical science, contributing to its overall mission and visibility.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 10

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Children's Hospital of Philadelphia Foundation (UEI: 933296568)

Address: 34TH ST & CIVIC CENTER BLVD, PHILADELPHIA, PA, 19104

Business Categories: Category Business, Corporate Entity Tax Exempt, Foundation, Hospital, Nonprofit Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $28,766,661

Exercised Options: $16,416,844

Current Obligation: $16,416,844

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline