HHS awards $120M for Biological Product Manufacturing to Emergent BioDefense, raising concerns about limited competition
Contract Overview
Contract Amount: $120,000,000 ($120.0M)
Contractor: Emergent Biodefense Operations Lansing LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2006-05-04
End Date: 2007-09-30
Contract Duration: 514 days
Daily Burn Rate: $233.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE
Sector: Healthcare
Official Description: AVA
Place of Performance
Location: LANSING, INGHAM County, MICHIGAN, 48906, UNITED STATES OF AMERICA
State: Michigan Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $120.0 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC for work described as: AVA Key points: 1. Significant award value of $120 million for biological product manufacturing. 2. Sole-source award to Emergent BioDefense Operations Lansing LLC indicates a lack of competition. 3. Contract duration of 514 days with a fixed-price structure. 4. Potential risks associated with single-source procurement and reliance on one supplier.
Value Assessment
Rating: questionable
The contract value of $120 million for biological product manufacturing is substantial. Without competitive bidding, it is difficult to assess if this price represents fair market value compared to similar contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about potential overspending and the efficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Reliance on a single supplier for critical biological products could pose a supply chain risk. The long-term implications for public health preparedness need careful consideration given the procurement method.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- Potential for inflated pricing
- Supply chain dependency
Positive Signals
- Addresses a critical need for biological product manufacturing
- Fixed-price contract can offer cost predictability
Sector Analysis
The biological product manufacturing sector is critical for public health and national security. Spending in this area often involves high R&D costs and specialized facilities, making competitive benchmarking challenging but essential.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if small businesses were excluded or if the scope of work was unsuitable for them.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving adequate value and that the contractor is meeting all performance requirements.
Related Government Programs
- Biological Product (except Diagnostic) Manufacturing
- Department of Health and Human Services Contracting
- Office of Assistant Secretary for Preparedness and Response Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for overpricing
- Supply chain vulnerability
- Limited transparency in price negotiation
Tags
biological-product-except-diagnostic-man, department-of-health-and-human-services, mi, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $120.0 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC. AVA
Who is the contractor on this award?
The obligated recipient is EMERGENT BIODEFENSE OPERATIONS LANSING LLC.
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 $120.0 million.
What is the period of performance?
Start: 2006-05-04. End: 2007-09-30.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. Without specific documentation, it's presumed that the agency determined Emergent BioDefense possessed the sole necessary qualifications or that competitive procurement was not feasible or in the government's best interest at the time of award.
What are the specific risks associated with relying on a single supplier for biological products?
Risks include supply chain disruptions due to unforeseen events affecting the sole supplier (e.g., natural disasters, operational failures), lack of innovation spurred by competition, and potential price gouging. This dependency can compromise national biodefense capabilities if the supplier fails to deliver or maintain quality standards.
How does this contract contribute to the overall effectiveness of the nation's biodefense preparedness?
While the contract aims to bolster biodefense by securing essential biological product manufacturing, its effectiveness is potentially hampered by the sole-source nature. True effectiveness relies not just on securing supply but also on ensuring cost-efficiency, fostering innovation through competition, and mitigating supply chain vulnerabilities, all of which are less assured in a non-competitive environment.
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: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Emergent Biosolutions Inc. (UEI: 173570271)
Address: 3500 N MARTIN LUTHER KING JR BLVD #, LANSING, MI, 48906
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $120,000,000
Exercised Options: $120,000,000
Current Obligation: $120,000,000
Contract Characteristics
Multi-Year Contract: Yes
Timeline
Start Date: 2006-05-04
Current End Date: 2007-09-30
Potential End Date: 2007-09-30 00:00:00
Last Modified: 2015-08-01
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