HHS awarded $126M for biological products, with Sanofi Vaccines US Inc. as the primary contractor

Contract Overview

Contract Amount: $126,097,578 ($126.1M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2007-06-14

End Date: 2013-04-30

Contract Duration: 2,147 days

Daily Burn Rate: $58.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST SHARING

Sector: Healthcare

Official Description: DRUGS AND BIOLOGICALS

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 $126.1 million to SANOFI VACCINES US INC. for work described as: DRUGS AND BIOLOGICALS Key points: 1. The contract value of $126 million represents a significant investment in biological product manufacturing. 2. Competition dynamics for this contract appear to be robust, given the 'FULL AND OPEN COMPETITION' designation. 3. The duration of the contract (over 5 years) suggests a long-term need for these biological products. 4. The contract type 'COST SHARING' indicates a partnership approach to managing expenses and risks. 5. The primary contractor, Sanofi Vaccines US Inc., is a major player in the vaccine and biological products market. 6. The specific product category 'Biological Product (except Diagnostic) Manufacturing' highlights a focus on essential medical supplies.

Value Assessment

Rating: good

The contract value of $126 million for biological product manufacturing over a period of approximately 5 years appears reasonable given the nature of the industry. Without specific benchmarks for comparable biological product manufacturing contracts from HHS or other agencies, a precise value-for-money assessment is challenging. However, the 'COST SHARING' contract type suggests a shared financial commitment, which can be a positive indicator of efficient resource utilization. Further analysis would require benchmarking against similar long-term manufacturing agreements for specialized biological products.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. This suggests a competitive bidding process was utilized, which typically leads to better price discovery and potentially more favorable terms for the government. The presence of 5 bidders, as indicated by the 'no' field, further supports the notion of a competitive environment. This level of competition is generally beneficial for ensuring the government receives good value.

Taxpayer Impact: A full and open competition with multiple bidders generally leads to more competitive pricing, which directly benefits taxpayers by ensuring federal funds are used efficiently.

Public Impact

The primary beneficiaries of this contract are likely public health initiatives and potentially the general population through the availability of essential biological products. The contract supports the manufacturing of biological products, crucial for disease prevention and treatment. The geographic impact is primarily linked to the manufacturing facilities and distribution networks of the contractor, with a national implication for healthcare. This contract has workforce implications for the biological product manufacturing sector, supporting jobs in research, development, and production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the 'COST SHARING' nature of the contract, requiring diligent oversight.
Dependence on a single primary contractor for a critical supply chain element.
Market volatility in raw materials for biological product manufacturing could impact costs.
Regulatory changes in the pharmaceutical and biological product industry could affect contract execution.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
The contractor, Sanofi Vaccines US Inc., is a well-established entity in the biological products market.
The 'COST SHARING' model can incentivize efficiency and shared risk, potentially leading to better outcomes.
The contract duration indicates a stable, long-term commitment to a critical area of public health.

Sector Analysis

The biological product manufacturing sector is a critical component of the healthcare industry, encompassing the production of vaccines, therapeutic proteins, and other essential medical substances. This sector is characterized by high research and development costs, stringent regulatory requirements, and significant market demand driven by public health needs. Spending in this area is often characterized by long-term contracts to ensure supply chain stability. Comparable spending benchmarks would typically involve analyzing other large-scale manufacturing agreements for pharmaceuticals and biologics, which can range from tens to hundreds of millions of dollars depending on the product's complexity and scale.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, as the 'ss' field is false. The primary contractor, Sanofi Vaccines US Inc., is a large corporation. However, large federal contracts often have subcontracting requirements that can benefit small businesses. The extent to which small businesses will be involved as subcontractors in the manufacturing or supply chain for these biological products would need further investigation. The impact on the small business ecosystem would depend on the specific subcontracting opportunities created.

Oversight & Accountability

Oversight for this contract would likely fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). The 'COST SHARING' nature of the contract necessitates robust financial oversight to ensure proper cost accounting and adherence to the agreed-upon cost-sharing ratios. Transparency would be facilitated through regular reporting requirements mandated by the contract. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Vaccine Manufacturing Contracts
Biopharmaceutical Production Agreements
Public Health Supply Chain Management
Medical Countermeasures Procurement
National Biodefense Strategy Funding

Risk Flags

Long-term contract duration may expose government to evolving technology risks.
Cost-sharing contracts require diligent financial oversight to prevent cost overruns.
Dependence on a single contractor for critical biological products.
Potential for supply chain disruptions in raw materials or manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $126.1 million to SANOFI VACCINES US INC.. DRUGS AND BIOLOGICALS

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 $126.1 million.

What is the period of performance?

Start: 2007-06-14. End: 2013-04-30.

What is the historical spending pattern of the Department of Health and Human Services (HHS) on biological product manufacturing, and how does this contract compare?

HHS, particularly through agencies like the Office of the Assistant Secretary for Preparedness and Response (ASPR) and the Centers for Disease Control and Prevention (CDC), consistently invests in biological product manufacturing to ensure national health security and preparedness. Historical spending data reveals significant, often multi-year commitments to secure supplies of vaccines, therapeutics, and other critical biological agents. This $126 million contract, awarded in 2007 and spanning over five years, falls within the typical range for large-scale biological product manufacturing agreements. For instance, during public health emergencies or for routine immunization programs, HHS may award contracts in the tens to hundreds of millions of dollars. The 'COST SHARING' aspect of this particular contract suggests a collaborative approach to funding, which can be a strategic choice for managing large, long-term investments in a complex and evolving field like biological product manufacturing. Benchmarking this against specific historical contracts would require detailed analysis of contract databases, focusing on similar product types and durations.

How does the 'COST SHARING' contract type influence the risk and reward for both the government and the contractor, Sanofi Vaccines US Inc.?

The 'COST SHARING' contract type, also known as cost-plus-incentive-fee or similar variations, fundamentally alters the financial dynamics compared to fixed-price contracts. For the government, it means that the final price is not fixed upfront and is dependent on the actual costs incurred by the contractor, plus a fee that may be adjusted based on performance or cost targets. This can lead to higher overall costs if the contractor's expenses are greater than anticipated. However, it also allows for flexibility in complex projects where costs are difficult to estimate precisely, such as in advanced biological product manufacturing. For Sanofi Vaccines US Inc., this structure provides a degree of financial protection against unforeseen cost increases, reducing their financial risk. The 'incentive' aspect, if present, can motivate the contractor to control costs and achieve performance milestones efficiently, as their fee may be enhanced by doing so. This shared-risk model can foster a more collaborative relationship between the government and the contractor, encouraging open communication about challenges and opportunities.

What is Sanofi Vaccines US Inc.'s track record with federal contracts, particularly within the Department of Health and Human Services?

Sanofi Vaccines US Inc., as a subsidiary of the global pharmaceutical giant Sanofi, has a substantial track record of engaging with U.S. federal agencies, including the Department of Health and Human Services (HHS). Their history typically involves contracts related to the development, manufacturing, and supply of vaccines and other biological products. Federal procurement databases often show numerous awards to Sanofi for various public health initiatives, including pandemic preparedness and routine immunization programs. For instance, they have been a key supplier of influenza vaccines and have participated in government efforts to secure other critical vaccines. Their experience often includes navigating complex regulatory environments and meeting stringent quality control standards required for biological products. While specific details of past performance, such as on-time delivery or adherence to budget, would require a deeper dive into individual contract close-out reports, Sanofi's consistent presence as a bidder and awardee indicates a recognized capability and a generally accepted level of performance within the federal contracting landscape.

What are the potential risks associated with the long duration (over 5 years) and the nature of biological product manufacturing for this contract?

The long duration of this contract, spanning over five years, introduces several potential risks. Firstly, the rapid pace of scientific advancement in biological product manufacturing means that the technology or processes used at the start of the contract might become outdated or less efficient by its end. This could necessitate costly upgrades or modifications. Secondly, the 'COST SHARING' element, combined with a long timeframe, increases the government's exposure to potential cost escalations due to inflation, changes in raw material prices, or unforeseen production challenges. Thirdly, maintaining consistent quality and regulatory compliance over an extended period requires continuous vigilance and investment from both the contractor and the overseeing agency. Finally, shifts in public health priorities or the emergence of new threats could alter the demand or relevance of the specific biological products being manufactured, potentially leading to contract modifications or early termination, though the latter is less common for established supply chains.

How does the 'Biological Product (except Diagnostic) Manufacturing' classification impact the contract's scope and the government's oversight requirements?

The classification 'Biological Product (except Diagnostic) Manufacturing' signifies that the contract focuses on the production of substances derived from living organisms or their components, intended for therapeutic, prophylactic, or other medical purposes, excluding diagnostic kits. This scope is critical because it places the contract within a highly regulated segment of the pharmaceutical and biotechnology industries. Government oversight for such contracts is typically intensive, focusing on Good Manufacturing Practices (GMP), quality control, sterility assurance, and supply chain integrity. Agencies like the Food and Drug Administration (FDA) play a crucial role in ensuring that the manufacturing processes meet stringent safety and efficacy standards. For HHS, this means oversight likely involves not only financial and performance monitoring but also close collaboration with regulatory bodies to ensure the produced biologicals are safe, effective, and meet all legal and scientific requirements. The complexity and sensitivity of biological products necessitate a higher level of scrutiny compared to simpler goods or services.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DHHSORDCVB0607

Offers Received: 5

Pricing Type: COST SHARING (T)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sanofi Pasteur Vaxdesign Corp (UEI: 739980787)

Address: 1 DISCOVERY DR, SWIFTWATER, PA, 18370

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

Financial Breakdown

Contract Ceiling: $126,097,578

Exercised Options: $126,097,578

Current Obligation: $126,097,578

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: YES

Timeline