NIH awards $27.6M for clinical research support, raising questions about competition and value

Contract Overview

Contract Amount: $27,638,037 ($27.6M)

Contractor: Social & Scientific Systems, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-06-10

End Date: 2016-09-29

Contract Duration: 842 days

Daily Burn Rate: $32.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF CLINICAL RESEARCH SUPPORT SERVICES

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27713

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.6 million to SOCIAL & SCIENTIFIC SYSTEMS, INC. for work described as: IGF::CT::IGF CLINICAL RESEARCH SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 3. Limited competition raises concerns about whether the government secured the best possible value. 4. The contract duration of 842 days (approx. 2.3 years) suggests a need for sustained support. 5. The North Carolina location for service delivery is noted, but its specific impact is unclear. 6. The contract's value is moderate within the context of federal R&D spending.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of clinical research support. Without competitive bids, it's difficult to ascertain if the fixed fee adequately reflects market rates or if a more competitive process could have yielded savings. The cost-plus-fixed-fee (CPFF) pricing model, while common for research, can sometimes lead to higher overall costs if not carefully managed, as the contractor is reimbursed for allowable costs plus a fixed fee. Comparing this to similar NIH contracts for clinical research support would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or resources required for the specific task, or in cases of urgent need. The lack of competition means that NIH did not benefit from the price discovery and innovation that typically arises from a bidding process. This can potentially lead to higher prices and reduced incentive for the contractor to offer the most cost-effective solution.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price was limited, potentially resulting in less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the researchers and institutions supported by the National Institutes of Health (NIH) through the clinical research services provided. Services delivered include crucial support for clinical trials and research initiatives, advancing medical knowledge and public health. The geographic impact is primarily centered in North Carolina, where the services are reportedly delivered. Workforce implications may include employment opportunities for scientific, technical, and administrative staff within the contractor's organization and potentially at research sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus-fixed-fee structure may not always align incentives for maximum cost efficiency.
Lack of transparency in the justification for sole-source award.
Limited data available to assess contractor performance against benchmarks.
Potential for cost overruns if not rigorously managed under the CPFF structure.

Positive Signals

Contract supports critical NIH clinical research, contributing to scientific advancement.
The contractor, Social & Scientific Systems, Inc., has experience in this domain.
The fixed fee component provides some level of cost predictability.
The contract duration suggests a stable, ongoing need for these services.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on biotechnology and clinical research support. The federal government is a significant investor in R&D, particularly through agencies like NIH, aiming to foster innovation and improve public health. Comparable spending benchmarks would involve analyzing other NIH contracts for similar clinical research support services, especially those awarded competitively, to gauge pricing and value. The market for such specialized support services is competitive, but often requires specific expertise and clearances.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. Without specific set-aside goals or reporting requirements, the direct impact on the small business ecosystem is likely minimal, unless the prime contractor voluntarily engages small businesses in their subcontracting efforts.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program officials within the National Institutes of Health (NIH). The Inspector General's office for the Department of Health and Human Services (HHS) would have jurisdiction for audits and investigations if concerns regarding fraud, waste, or abuse arise. Transparency regarding the sole-source justification and performance metrics would be key to assessing accountability.

Related Government Programs

NIH Research Grants
Biotechnology Research Contracts
Clinical Trial Management Services
Federal Health IT Spending
National Center for Advancing Translational Sciences (NCATS) Programs

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding
Limited performance data available

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.6 million to SOCIAL & SCIENTIFIC SYSTEMS, INC.. IGF::CT::IGF CLINICAL RESEARCH SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is SOCIAL & SCIENTIFIC SYSTEMS, 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 $27.6 million.

What is the period of performance?

Start: 2014-06-10. End: 2016-09-29.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source is available or capable of providing the required services, often due to unique capabilities, proprietary knowledge, or urgent needs. For this contract, NIH would have had to document why other qualified vendors could not fulfill the requirement. Without access to that documentation, it's impossible to fully assess the validity of the sole-source determination. This lack of transparency can be a concern for ensuring fair and competitive procurement practices.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar services?

The Cost-Plus-Fixed-Fee (CPFF) structure reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, such as in research and development. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be more flexible. However, it places a greater burden on the government to monitor costs to prevent overruns. Competitive bidding on fixed-price or performance-based contracts often yields better value when requirements are clearly defined.

What is the track record of Social & Scientific Systems, Inc. with federal contracts, particularly with NIH?

Social & Scientific Systems, Inc. (SSS) has a history of performing federal contracts, including those with NIH. While specific performance details for this particular contract are not detailed in the provided data, SSS generally operates in the health and social science research support domain. A comprehensive review would involve examining past performance evaluations, any contract disputes, and their success rate on similar government solicitations. Their continued ability to secure contracts suggests a level of competence, but detailed performance metrics are crucial for a full assessment.

What are the potential risks associated with a sole-source award for clinical research support?

The primary risk of a sole-source award for clinical research support is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Additionally, there's a risk of reduced innovation and service quality, as the contractor may have less incentive to go above and beyond when competition is absent. Ensuring the sole-source justification is robust and that rigorous oversight is applied becomes critical to mitigate these risks and ensure the government receives adequate value for its investment.

How does this contract's value compare to the overall NIH budget for R&D?

The $27.6 million awarded for this contract represents a small fraction of the National Institutes of Health's (NIH) overall budget, which typically runs into tens of billions of dollars annually for research and development. For instance, in fiscal year 2023, NIH's budget was approximately $47.5 billion. While $27.6 million is a significant sum in absolute terms, in the context of NIH's vast R&D portfolio, it is a moderate-sized contract. Its impact on the overall R&D spending landscape is therefore limited, though it remains crucial for the specific research activities it supports.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8757 GEORGIA AVE STE 1200, SILVER SPRING, MD, 20910

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

Financial Breakdown

Contract Ceiling: $27,638,037

Exercised Options: $27,638,037

Current Obligation: $27,638,037

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $66,551,088

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline