Influenza vaccine contract for SNS awarded to Sanofi for over $130M, highlighting biological product manufacturing

Contract Overview

Contract Amount: $130,226,133 ($130.2M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-11-15

End Date: 2008-12-31

Contract Duration: 777 days

Daily Burn Rate: $167.6K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIXED PRICE

Sector: Healthcare

Official Description: INFLUENZA VACCINE FOR SNS

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $130.2 million to SANOFI VACCINES US INC. for work described as: INFLUENZA VACCINE FOR SNS Key points: 1. Contract value exceeds $130 million, indicating significant investment in public health preparedness. 2. Awarded to a single vendor, raising questions about competition and potential price efficiencies. 3. The duration of the contract suggests a long-term need for influenza vaccine supply. 4. Focus on biological product manufacturing underscores the specialized nature of the goods procured. 5. The contract's purpose is to support the Strategic National Stockpile (SNS), a critical national asset. 6. The non-competitive nature of this delivery order warrants scrutiny regarding justification and market alternatives.

Value Assessment

Rating: fair

The contract value of over $130 million for influenza vaccines is substantial. Benchmarking this against similar large-scale vaccine procurements for national stockpiles is difficult without more specific data on vaccine type, dosage, and duration of immunity. The fixed-price nature suggests cost certainty, but the lack of competition means there's no direct market comparison to assess optimal value for money. Further analysis would require understanding the specific requirements of the SNS and the prevailing market prices for comparable influenza vaccines at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that a sole-source justification was likely utilized. The data does not specify the number of bidders, but the 'NON-COMPETITIVE DELIVERY ORDER' designation strongly implies only one vendor was considered. This lack of competition limits the government's ability to leverage market forces to drive down prices and may result in higher costs compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without exploring alternative vendors or negotiating aggressively, the government may not have secured the most cost-effective solution for this critical vaccine supply.

Public Impact

The primary beneficiaries are the citizens of the United States, who gain access to a critical supply of influenza vaccines during public health emergencies. The contract ensures the availability of biological products, specifically influenza vaccines, for the Strategic National Stockpile (SNS). The geographic impact is national, as the SNS serves the entire country. Workforce implications are likely within the pharmaceutical manufacturing sector, supporting Sanofi's production capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices for taxpayers.
Sole-source award raises questions about the availability of alternative suppliers or potential market disruptions.
Contract duration and value could indicate a reliance on a single supplier for a critical national need.

Positive Signals

Ensures a critical supply of influenza vaccines for national health security.
Award to an established manufacturer like Sanofi suggests a focus on reliability and quality.
The contract supports the readiness of the Strategic National Stockpile (SNS).

Sector Analysis

This contract falls within the Pharmaceutical and Biotechnology sector, specifically focusing on vaccine manufacturing. The market for influenza vaccines is significant, driven by annual demand and public health initiatives. Procurements for national stockpiles represent a specialized segment, often involving long-term agreements and specific manufacturing capabilities. Comparable spending benchmarks would involve other large-scale procurements of biological agents or vaccines for government stockpiles, which are typically high-value, specialized contracts.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting opportunities for small businesses. Given the specialized nature of vaccine manufacturing and the large contract value, it is unlikely that small businesses played a significant role as prime contractors. Further investigation would be needed to determine if any subcontracting opportunities were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). Accountability measures would be tied to the delivery of specified vaccine quantities and quality standards. Transparency is assessed through contract award databases, though the justification for non-competitive awards can sometimes be less detailed. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Strategic National Stockpile (SNS)
Influenza Vaccine Procurement
Public Health Emergency Preparedness
Biological Product Manufacturing
Department of Health and Human Services Contracts

Risk Flags

Non-competitive award
Potential for higher costs due to lack of competition
Single point of failure risk
Long-term contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $130.2 million to SANOFI VACCINES US INC.. INFLUENZA VACCINE FOR SNS

Who is the contractor on this award?

The obligated recipient is SANOFI VACCINES US 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 $130.2 million.

What is the period of performance?

Start: 2006-11-15. End: 2008-12-31.

What was the specific justification for awarding this contract on a non-competitive basis?

The provided data indicates the contract was a 'NON-COMPETITIVE DELIVERY ORDER'. While the specific justification is not detailed, common reasons for sole-source awards in this category include urgent and compelling needs where only one responsible source can reasonably satisfy the requirement, or when the government has unique capabilities or specifications that only one contractor can meet. For a critical supply like influenza vaccines for the Strategic National Stockpile (SNS), justifications often revolve around ensuring continuity of supply, meeting specific formulation requirements, or leveraging existing relationships and manufacturing capabilities that have been previously vetted and proven reliable. Without access to the official justification document, the precise rationale remains speculative but likely centers on national security and public health imperatives.

How does the unit cost of these influenza vaccines compare to market rates or other government procurements?

Direct comparison of the per-unit cost is not possible with the provided data, as it lacks information on the quantity of vaccines procured and the specific type or dosage. The total award of $130,226,133.48 is a lump sum. To benchmark, one would need to know the number of doses purchased. Furthermore, the non-competitive nature of the award makes direct price comparison challenging. Government contracts for national stockpiles may also include factors beyond simple per-unit cost, such as guaranteed availability, specific storage requirements, or extended shelf-life provisions, which can influence pricing. Ideally, a comparison would be made against other large-scale, competitively procured influenza vaccine contracts for similar purposes, adjusting for inflation and specific product characteristics.

What is Sanofi Pasteur's track record in supplying vaccines to the U.S. government, particularly for national stockpiles?

Sanofi Pasteur (part of Sanofi Vaccines US Inc.) is a major global vaccine manufacturer with a long history of supplying vaccines to governments worldwide, including the United States. They have been a significant supplier of influenza vaccines to the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS) for various programs, including the Strategic National Stockpile (SNS). Their track record generally includes the ability to produce large quantities of vaccines and meet stringent quality and regulatory requirements. Historically, they have been involved in fulfilling large government orders, demonstrating capacity and reliability. However, like any large contractor, specific contract performance, including delivery timeliness and adherence to specifications, would need to be reviewed on a contract-by-contract basis.

What are the potential risks associated with relying on a single supplier for a critical vaccine like influenza?

Relying on a single supplier for a critical vaccine like influenza presents several risks. Firstly, it creates a single point of failure; if the supplier experiences manufacturing disruptions (e.g., due to equipment failure, contamination, labor issues, or natural disasters), the entire supply chain for the national stockpile could be jeopardized. Secondly, the lack of competition can lead to higher prices and reduced incentives for the supplier to innovate or improve efficiency. Thirdly, it can limit the government's flexibility in responding to rapidly changing public health needs or adopting newer, potentially more effective vaccine technologies if the sole supplier is not equipped to produce them. This dependence underscores the importance of robust contract management, contingency planning, and potentially exploring diversification strategies for future procurements.

How has federal spending on influenza vaccines for the SNS evolved over time?

Analyzing the historical spending on influenza vaccines for the SNS requires access to comprehensive historical contract data beyond this single award. This specific contract, awarded in 2006 with an end date in 2008, represents a snapshot of spending during that period. Federal spending on SNS assets, including vaccines, is often driven by perceived threats, national health security strategies, and budget allocations. Spending can fluctuate based on the perceived risk of pandemics or seasonal outbreaks, advancements in vaccine technology, and changes in government policy. To understand the evolution, one would need to examine aggregate spending data for the SNS over multiple years, identifying trends in procurement volumes, types of vaccines acquired, and the number and nature of contracts awarded (competitive vs. non-competitive).

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DHHSORDCVB0608

Offers Received: 3

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sanofi Pasteur MSD SNC (UEI: 577272925)

Address: DISCOVERY DR, SWIFTWATER, PA, 18370

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $500,000,000

Exercised Options: $329,503,891

Current Obligation: $130,226,133

Parent Contract

Parent Award PIID: HHSO100200700026I

IDV Type: IDC

Timeline