Biomedical R&D contract for Elusys Therapeutics Inc. awarded $138M by HHS for advanced research

Contract Overview

Contract Amount: $138,258,202 ($138.3M)

Contractor: Elusys Therapeutics Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2009-12-18

End Date: 2018-09-30

Contract Duration: 3,208 days

Daily Burn Rate: $43.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BIOMEDICAL (ADVANCED)

Place of Performance

Location: PINE BROOK, MORRIS County, NEW JERSEY, 07058

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $138.3 million to ELUSYS THERAPEUTICS INC for work described as: BIOMEDICAL (ADVANCED) Key points: 1. Contract awarded for advanced biomedical research and development. 2. The contract spans nearly a decade, indicating a long-term research objective. 3. The award was made under full and open competition. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. The North American Industry Classification System (NAICS) code 541711 points to Research and Development in Biotechnology. 6. The contractor, Elusys Therapeutics Inc., is based in New Jersey. 7. The contract was awarded by the Department of Health and Human Services (HHS). 8. The contract value is substantial, reflecting significant investment in the research area.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or milestones. The Cost Plus Fixed Fee (CPFF) structure means costs can escalate, and the fixed fee provides a baseline profit for the contractor. While the total award is $138M, the actual spending and value derived depend heavily on the research outcomes and adherence to budget. Comparing it to similar advanced biomedical R&D contracts would require detailed analysis of the scope of work and the scientific advancements achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of two bids indicates a degree of competition, but the specifics of the bidding process, including the number of proposals received and the evaluation criteria, are not detailed here. A competitive process is generally favorable for price discovery and ensuring the government receives the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to offer their best pricing and technical solutions, potentially leading to cost savings and innovation.

Public Impact

This contract supports advanced biomedical research, potentially leading to new therapies or medical technologies. The primary beneficiary is the Department of Health and Human Services, advancing its mission in public health and preparedness. The research conducted could have broad public health implications, improving health outcomes and national security. The contract is geographically focused on New Jersey, where the contractor is located, potentially impacting the local economy and workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not closely monitored.
The long duration of the contract (over 9 years) increases the risk of scope creep or changing research priorities.
Limited information on specific deliverables makes it difficult to assess performance and value for money.
The absence of small business subcontracting data raises questions about broader economic impact.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The substantial funding indicates a high level of confidence in the contractor's capabilities for advanced R&D.
The contract supports critical research areas within the Department of Health and Human Services.
The contractor is based in New Jersey, potentially contributing to regional economic development.

Sector Analysis

This contract falls within the Biotechnology and Pharmaceutical Research and Development sector. This sector is characterized by high investment in innovation, long development cycles, and significant regulatory oversight. The market size for biomedical R&D is substantial, driven by government funding, private investment, and the demand for new treatments and diagnostics. This contract represents a significant investment by the government in a specific area of advanced biotechnology research, likely aligning with national health priorities or biodefense initiatives.

Small Business Impact

The contract was not set aside for small businesses, and there is no explicit indication of small business subcontracting requirements or performance. This suggests that the primary focus was on securing specialized capabilities from a larger entity. The lack of small business involvement in this specific contract may limit opportunities for smaller innovative firms in this particular research area, although they may participate in other government contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of Health and Human Services. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable to the contract. Transparency would be enhanced through regular reporting requirements from the contractor on research progress and expenditures. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Biomedical Research and Development Contracts
Department of Health and Human Services Contracts
Advanced Technology Research
Biotechnology Sector Spending
Cost Plus Fixed Fee Contracts
Research and Development in Biotechnology

Risk Flags

Cost Plus Fixed Fee contract type can lead to cost overruns.
Long contract duration increases risk of scope changes or obsolescence.
Limited public information on specific deliverables and performance metrics.
No explicit small business subcontracting noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $138.3 million to ELUSYS THERAPEUTICS INC. BIOMEDICAL (ADVANCED)

Who is the contractor on this award?

The obligated recipient is ELUSYS THERAPEUTICS 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 $138.3 million.

What is the period of performance?

Start: 2009-12-18. End: 2018-09-30.

What specific research objectives was Elusys Therapeutics Inc. contracted to achieve?

The provided data indicates the contract is for 'Research and Development in Biotechnology' under NAICS code 541711, with a focus on 'BIOMEDICAL (ADVANCED)'. However, the specific research objectives, deliverables, milestones, and expected outcomes are not detailed in the summary data. Typically, such contracts would outline specific scientific goals, such as developing novel diagnostic tools, therapeutic agents, or advanced biotechnological processes. The 'Advanced' designation suggests a focus on cutting-edge or experimental research rather than incremental improvements. Further details would likely be found in the contract's statement of work (SOW) or performance work statement (PWS).

How does the $138 million award compare to typical spending for similar advanced biomedical R&D contracts?

The $138 million award is a substantial sum, indicative of a significant, long-term investment in advanced biomedical research. Benchmarking this against similar contracts requires access to a broader dataset of government R&D awards within the biotechnology sector. Contracts for early-stage or exploratory research might be smaller, while those for late-stage development or clinical trials could be considerably larger. Given the nearly decade-long duration (December 2009 to September 2018), this award suggests a comprehensive research program. Without specific details on the scope and phase of research, direct comparison is difficult, but it represents a major commitment by HHS in this area.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced R&D?

The primary risk with a CPFF contract, especially for advanced R&D, is the potential for cost escalation. While the contractor receives a fixed fee, the 'cost plus' component means the government reimburses the contractor's allowable costs. If the research proves more complex or time-consuming than initially estimated, costs can increase significantly. The contractor has less incentive to control costs compared to fixed-price contracts, as their fee is fixed regardless of the final cost. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What is the track record of Elusys Therapeutics Inc. in fulfilling government R&D contracts?

The provided data indicates Elusys Therapeutics Inc. was awarded this specific $138 million contract by the Department of Health and Human Services. However, it does not offer details on their past performance, other government contracts, or their success rate in fulfilling previous R&D obligations. To assess their track record, one would need to examine contract performance reports (CPARS), other contract awards to the company, and any publicly available information regarding their scientific achievements and project completions. Without this additional context, it's difficult to definitively evaluate their historical reliability and success.

How does this contract align with the strategic priorities of the Department of Health and Human Services?

The contract's focus on 'BIOMEDICAL (ADVANCED)' research aligns with the Department of Health and Human Services' (HHS) overarching mission to protect and improve the health of Americans. HHS agencies, such as the Office of the Assistant Secretary for Preparedness and Response (ASPR), are often involved in funding research related to public health threats, emerging diseases, and medical countermeasures. This contract likely supports strategic goals related to national biodefense, pandemic preparedness, or the development of novel medical technologies to address critical health challenges. The specific area of biomedical research would need to be cross-referenced with HHS's current strategic plans and priorities.

What are the potential long-term implications of this contract for the biotechnology sector?

This contract represents a significant government investment in advanced biomedical R&D, which can stimulate innovation and growth within the biotechnology sector. By funding Elusys Therapeutics Inc., the government is supporting the development of potentially groundbreaking technologies or therapies. This can lead to intellectual property generation, further private investment, and the creation of high-skilled jobs. Furthermore, successful outcomes could establish new market opportunities or enhance national capabilities in areas like biodefense or public health emergencies, influencing the direction and focus of future R&D efforts within the broader sector.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Nighthawk Biosciences, Inc.

Address: 25 RIVERSIDE DR, PINE BROOK, NJ, 07058

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

Financial Breakdown

Contract Ceiling: $138,258,202

Exercised Options: $138,258,202

Current Obligation: $138,258,202

Actual Outlays: $-144,710

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline