Protein Sciences Corp awarded $147M for biological product manufacturing, with a 2750-day duration

Contract Overview

Contract Amount: $146,933,415 ($146.9M)

Contractor: Protein Sciences Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2009-06-21

End Date: 2016-12-31

Contract Duration: 2,750 days

Daily Burn Rate: $53.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: BIOMEDICAL (ADVANCED)

Place of Performance

Location: MERIDEN, NEW HAVEN County, CONNECTICUT, 06450

State: Connecticut Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $146.9 million to PROTEIN SCIENCES CORP for work described as: BIOMEDICAL (ADVANCED) Key points: 1. The contract's value of $147 million over nearly 7.5 years suggests a significant, long-term need for the biological products manufactured. 2. The use of a Cost Plus Fixed Fee (CPFF) contract type indicates that costs were not precisely known at the outset, potentially leading to higher final expenditures than a fixed-price contract. 3. With 3 bidders, the competition level appears moderate, which could impact price negotiation and value for money. 4. The contract's duration of 2750 days (over 7 years) implies a stable, ongoing requirement for the specified biological products. 5. The product category, 'Biological Product (except Diagnostic) Manufacturing,' places this contract within a critical segment of the healthcare and biodefense supply chain. 6. The award to Protein Sciences Corp, a single entity, highlights the specialized nature of this manufacturing requirement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the biological products manufactured and their market prices. However, a $147 million award over nearly 7.5 years for specialized manufacturing suggests a substantial investment. The CPFF structure, while allowing flexibility for evolving costs, inherently carries a higher risk of cost overruns compared to fixed-price contracts. Further analysis would require understanding the specific deliverables and comparing them to industry standards for similar advanced biological product manufacturing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders participating. While three bidders indicate some level of competition, it is not as robust as a larger number of offers. This moderate competition may have provided some leverage for price negotiation but could also mean that the government did not receive the most competitive pricing possible if market entry barriers are high for this specialized manufacturing.

Taxpayer Impact: A moderate level of competition suggests that taxpayers likely received a reasonable, though not necessarily the lowest possible, price for the services rendered. The presence of multiple bidders prevented a sole-source situation, ensuring some market discipline.

Public Impact

The primary beneficiaries are likely government agencies requiring specialized biological products, potentially for public health initiatives, biodefense, or research. The contract supports the manufacturing of biological products, crucial for national health security and preparedness. The geographic impact is centered in Connecticut, where Protein Sciences Corp is located, potentially creating or sustaining local jobs in a high-skill sector. Workforce implications include the need for skilled labor in biological manufacturing, quality control, and research and development within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher final costs if not managed diligently.
Moderate competition (3 bidders) may not have yielded the absolute lowest price achievable in a more crowded market.
Long contract duration (over 7 years) requires sustained oversight to ensure continued value and performance.

Positive Signals

Awarded under full and open competition, ensuring a broad search for qualified contractors.
The contract supports a critical area (biological product manufacturing) vital for national interests.
The significant award value indicates a strong, validated need for the contractor's specialized capabilities.

Sector Analysis

This contract falls within the broader biopharmaceutical and biotechnology sector, a rapidly growing and highly specialized industry. The market for advanced biological product manufacturing is characterized by high barriers to entry due to complex regulatory requirements, significant capital investment, and specialized expertise. Spending in this sector is often driven by public health needs, defense preparedness, and pharmaceutical research and development. Comparable spending benchmarks would depend heavily on the specific type and scale of biological products being manufactured.

Small Business Impact

The contract details indicate that small business participation was not a primary focus, as the award was not set aside for small businesses and the contractor is likely a larger entity. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary focus was on securing specialized manufacturing capabilities, and the impact on the small business ecosystem may be indirect, potentially through supply chain opportunities if the prime contractor engages them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of Health and Human Services (HHS). Given the CPFF structure, rigorous oversight of costs, performance, and compliance is essential. Transparency is facilitated through contract award databases, but detailed operational oversight remains internal to the agency and contractor. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Biodefense Advanced Research Projects Agency (BARDA) contracts
National Institutes of Health (NIH) research grants
Centers for Disease Control and Prevention (CDC) public health initiatives
Department of Defense (DoD) biopharmaceutical procurements

Risk Flags

Cost Overrun Risk (CPFF)
Performance Degradation Over Time
Technological Obsolescence
Supply Chain Vulnerability

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $146.9 million to PROTEIN SCIENCES CORP. BIOMEDICAL (ADVANCED)

Who is the contractor on this award?

The obligated recipient is PROTEIN SCIENCES CORP.

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 $146.9 million.

What is the period of performance?

Start: 2009-06-21. End: 2016-12-31.

What is the specific type of biological product being manufactured under this contract?

The provided data indicates the contract is for 'Biological Product (except Diagnostic) Manufacturing.' However, it does not specify the exact nature of these products. This could range from vaccines, therapeutic proteins, antibodies, or other complex biological agents. Understanding the specific product is crucial for assessing its criticality, market value, and the technical expertise required. Without this detail, comparisons to other contracts or market rates remain generalized. Further investigation into the contract's statement of work or associated documentation would be necessary to identify the precise biological products.

How does the Cost Plus Fixed Fee (CPFF) structure impact the overall value for money compared to other contract types?

The CPFF structure is often used when the scope of work or costs cannot be precisely defined at the outset, common in research and development or complex manufacturing. It provides the contractor with reimbursement for allowable costs plus a predetermined fixed fee representing profit. While this allows flexibility, it shifts cost risk to the government. Compared to a Firm-Fixed-Price (FFP) contract, CPFF generally offers less incentive for the contractor to control costs rigorously, potentially leading to higher overall expenditures. However, for highly uncertain projects, it can ensure that necessary work is completed without the contractor being unduly penalized by unforeseen cost increases, thus potentially securing critical capabilities.

What is the track record of Protein Sciences Corp in fulfilling large-scale biological manufacturing contracts?

Protein Sciences Corp has a history in vaccine development and manufacturing, notably for influenza vaccines. Their experience with large-scale production is a key factor in their ability to secure contracts like this one. Assessing their track record would involve reviewing past performance evaluations, any documented issues with quality, delivery, or cost overruns on previous government or commercial contracts. Their success in obtaining this significant award suggests a positive assessment of their capabilities by the Department of Health and Human Services, likely based on prior performance and demonstrated expertise in the specialized field of biological product manufacturing.

How does the $147 million contract value compare to typical spending in the biological product manufacturing sector?

A $147 million contract awarded over approximately 7.5 years for biological product manufacturing is substantial. The biopharmaceutical and biotechnology sector involves significant investment, and large-scale manufacturing contracts can easily reach these figures, especially for products related to public health emergencies, advanced therapies, or defense applications. However, the 'typical' spending varies widely based on the product's complexity, scale of production, and market demand. This contract's value suggests a significant, long-term requirement for specialized manufacturing capabilities, likely aligning with strategic government needs rather than routine commercial production.

What are the potential risks associated with a contract of this duration and complexity?

Contracts spanning over seven years carry inherent risks, including potential changes in technology, market dynamics, or government requirements that could render the original scope obsolete or less relevant. There's also a risk of contractor performance degradation over time or the emergence of more cost-effective alternatives. For biological manufacturing, risks include supply chain disruptions, regulatory changes, quality control failures, and the potential for cost overruns, especially with a CPFF structure. Effective risk mitigation requires continuous monitoring, adaptive management, and clear communication channels between the government and the contractor.

What is the significance of this contract within the broader context of HHS's preparedness and response efforts?

This contract is likely significant for the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS, which focuses on threats to public health. Securing domestic manufacturing capacity for critical biological products is a strategic priority for national security and public health resilience. Such contracts ensure the availability of essential medical countermeasures, vaccines, or therapeutics needed during public health emergencies, pandemics, or bioterrorism events. The substantial funding and long duration underscore a commitment to maintaining and strengthening this vital manufacturing capability within the U.S.

Industry Classification

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

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: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1000 RESEARCH PKY, MERIDEN, CT, 06450

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

Financial Breakdown

Contract Ceiling: $507,832,735

Exercised Options: $262,782,473

Current Obligation: $146,933,415

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline