NIH awards $22M to PPD Development for Biomedical R&D, facing full and open competition

Contract Overview

Contract Amount: $22,043,479 ($22.0M)

Contractor: PPD Development LP

Awarding Agency: Department of Health and Human Services

Start Date: 2011-11-01

End Date: 2021-10-31

Contract Duration: 3,652 days

Daily Burn Rate: $6.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: R&D- MEDICAL: BIOMEDICAL (BASIC RESEARCH)

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 $22.0 million to PPD DEVELOPMENT LP for work described as: R&D- MEDICAL: BIOMEDICAL (BASIC RESEARCH) Key points: 1. Significant investment in early-stage biomedical research. 2. Competition was open, suggesting potential for competitive pricing. 3. Contract duration is long (10 years), indicating a sustained research effort. 4. The sector is critical for future healthcare advancements.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking is difficult without specific deliverables and comparable projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was utilized, which is ideal for price discovery and ensuring the best value is obtained. However, the long duration and specific nature of basic research can complicate direct price comparisons.

Taxpayer Impact: Taxpayer funds are supporting critical basic research, with the potential for significant long-term health benefits. Open competition aims to maximize the value of this investment.

Public Impact

Supports advancement in biotechnology and medical understanding. Potential for breakthroughs in disease treatment and prevention. Long-term investment in scientific discovery.

Waste & Efficiency Indicators

Waste Risk Score: 60 / 10

Warning Flags

Cost Plus Fixed Fee contract type risks cost escalation.
Long contract duration may not adapt to evolving research needs.

Positive Signals

Open competition ensures broad participation.
Focus on fundamental research has high potential impact.

Sector Analysis

Biomedical basic research is a high-risk, high-reward area. Spending benchmarks vary widely based on research scope and duration, but $22 million over 10 years for a single contract suggests a substantial project.

Small Business Impact

This contract was not awarded to a small business. Analysis of small business participation is not applicable in this instance.

Oversight & Accountability

NIH's oversight is crucial for managing the Cost Plus Fixed Fee contract, ensuring research milestones are met and funds are used efficiently. Regular reviews are necessary to track progress and control costs.

Related Government Programs

Research and Development in Biotechnology
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Cost Plus Fixed Fee contract.
Long contract duration.
Lack of specific performance metrics for basic research.
Potential for scope creep in R&D.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.0 million to PPD DEVELOPMENT LP. R&D- MEDICAL: BIOMEDICAL (BASIC RESEARCH)

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 $22.0 million.

What is the period of performance?

Start: 2011-11-01. End: 2021-10-31.

What specific research objectives does this contract aim to achieve, and how will success be measured?

The contract focuses on basic research in biotechnology, likely exploring fundamental biological processes or disease mechanisms. Success measurement would typically involve achieving defined research milestones, publishing findings, and contributing to the scientific understanding within the field, rather than immediate product development.

What are the primary risks associated with the Cost Plus Fixed Fee structure in this long-term R&D context?

The primary risks include potential cost overruns if research proves more complex or expensive than initially estimated, and the fixed fee might not adequately incentivize efficiency. NIH must maintain rigorous oversight to ensure costs remain reasonable and aligned with research progress.

How does this investment in basic research compare to investments in applied research or development contracts within NIH?

Investments in basic research, like this one, are foundational and carry higher scientific uncertainty but potentially greater long-term impact. Applied research and development contracts are typically more focused on specific applications or product outcomes, with clearer performance metrics and potentially lower risk profiles.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 929 N FRONT ST, WILMINGTON, NC, 28401

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

Financial Breakdown

Contract Ceiling: $27,437,094

Exercised Options: $22,043,479

Current Obligation: $22,043,479

Actual Outlays: $866,519

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline