HHS awarded VAXINNATE CORPORATION $86M for biological product manufacturing, with 4 bidders

Contract Overview

Contract Amount: $86,180,679 ($86.2M)

Contractor: Vaxinnate Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2011-02-24

End Date: 2016-12-21

Contract Duration: 2,127 days

Daily Burn Rate: $40.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: BIOMEDICAL (ADVANCED)

Place of Performance

Location: CRANBURY, MIDDLESEX County, NEW JERSEY, 08512

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $86.2 million to VAXINNATE CORPORATION for work described as: BIOMEDICAL (ADVANCED) Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize cost overruns, requiring close monitoring. 2. With 4 bidders, the competition level suggests a moderately competitive market for this specialized service. 3. The contract duration of 2127 days indicates a long-term need for these biological products. 4. Performance context is crucial, as the success of biological product manufacturing directly impacts public health preparedness. 5. This contract falls within the advanced biomedical sector, a critical area for national security and health. 6. The lack of small business involvement suggests a focus on large, specialized firms.

Value Assessment

Rating: fair

The total award of $86.2 million over approximately 5.8 years averages to about $14.8 million annually. Benchmarking this against similar contracts for advanced biological product manufacturing is challenging due to the specialized nature of the work. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D-intensive projects, carries inherent risks of cost escalation if not managed diligently. The fixed fee component provides some incentive for the contractor to control costs, but the primary driver is the cost reimbursement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bids received. This indicates a healthy level of interest and a reasonably competitive environment for this specialized service. The presence of multiple bidders suggests that the government had options and could negotiate terms. However, the specific nature of advanced biological product manufacturing might limit the pool of qualified bidders, even under full and open competition.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation. With four bidders, there was a reasonable opportunity for price discovery and selection of the most cost-effective solution.

Public Impact

The primary beneficiaries are the citizens who benefit from the availability of advanced biological products, potentially for public health emergencies or research. The services delivered involve the manufacturing of biological products, likely complex and requiring specialized expertise. The geographic impact is centered in New Jersey, where the contractor is located, potentially creating local jobs and economic activity. Workforce implications include the need for highly skilled scientists, technicians, and manufacturing personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to higher overall costs if not managed tightly.
The specialized nature of biological product manufacturing may limit the pool of potential competitors in the future.
Long contract duration increases exposure to potential changes in technology or market needs.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contractor, VAXINNATE CORPORATION, is engaged in a critical sector for public health.
The contract supports the development and manufacturing of advanced biological products.

Sector Analysis

The contract falls within the advanced biomedical and pharmaceutical manufacturing sector, a high-growth and critical area for national health security. This sector is characterized by significant R&D investment, stringent regulatory requirements, and long product development cycles. Spending in this area is often driven by government initiatives for pandemic preparedness, biodefense, and medical countermeasures. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of 'advanced' biological products, but significant government investment is typical for such capabilities.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). This suggests that the nature of the work, requiring advanced manufacturing capabilities and potentially significant infrastructure, may be better suited for larger, established firms. There is no explicit information on subcontracting plans, but it is unlikely that significant portions would be subcontracted to small businesses given the specialized requirements.

Oversight & Accountability

Oversight for this contract would likely be managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures would be tied to the achievement of manufacturing milestones and quality control standards outlined in the contract. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

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)
Technological Obsolescence
Limited Competition Pool (Specialized Field)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $86.2 million to VAXINNATE CORPORATION. BIOMEDICAL (ADVANCED)

Who is the contractor on this award?

The obligated recipient is VAXINNATE CORPORATION.

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 $86.2 million.

What is the period of performance?

Start: 2011-02-24. End: 2016-12-21.

What is VAXINNATE CORPORATION's track record in fulfilling government contracts, particularly in biological product manufacturing?

Detailed information on VAXINNATE CORPORATION's specific track record with government contracts, beyond this award, is not provided in the data. However, the award itself signifies that the Department of Health and Human Services (HHS) deemed them capable of fulfilling this complex requirement. To assess their track record thoroughly, one would need to examine past performance reviews, any prior contract history with federal agencies, and their success in meeting milestones on similar projects. A review of contract databases and agency performance reports would be necessary to understand their reliability, quality of work, and adherence to schedules and budgets on previous engagements.

How does the $86.2 million award compare to typical government spending on advanced biological product manufacturing?

The $86.2 million award over approximately 5.8 years represents a significant investment in advanced biological product manufacturing. Government spending in this area can vary widely depending on the specific product, its stage of development (research, clinical trials, manufacturing scale-up), and the intended use (e.g., pandemic preparedness, rare disease treatment). Contracts for manufacturing complex biologicals, especially those requiring specialized facilities and adherence to strict Good Manufacturing Practices (GMP), often run into tens or hundreds of millions of dollars. This award appears to be within the expected range for a long-term contract supporting the production of advanced biological products, particularly given the context of public health preparedness.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for biological product manufacturing?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. If costs escalate significantly beyond initial projections, the government bears the burden of these increased expenses. For biological product manufacturing, which can involve complex R&D, unforeseen technical challenges, and stringent quality control, the risk of cost increases is substantial. Effective oversight is crucial to ensure that costs are reasonable and allocable, and that the contractor is making diligent efforts to control expenses. The fixed fee can incentivize efficiency, but the cost reimbursement aspect means the government absorbs the majority of the financial risk.

How effective is the 'full and open competition' approach in ensuring value for money for specialized biomedical contracts?

Full and open competition is generally considered the most effective method for ensuring value for money, as it allows the widest possible pool of qualified vendors to bid. For specialized biomedical contracts, this approach maximizes the chances of finding innovative solutions and competitive pricing. However, the effectiveness is contingent on the actual number and capability of bidders. If the specialized nature of the requirement limits the number of truly capable bidders to a small group, the competitive pressure might be less intense than in broader markets. In this case, with four bidders, it suggests a reasonable level of competition, likely leading to better price discovery and selection of a capable contractor compared to sole-source or limited competition scenarios.

What are the historical spending patterns for biological product manufacturing contracts awarded by HHS?

Historical spending patterns for biological product manufacturing contracts by HHS are generally substantial, reflecting the agency's mission in public health and medical preparedness. HHS, through entities like the Office of the Assistant Secretary for Preparedness and Response (ASPR) and the National Institutes of Health (NIH), frequently awards large, multi-year contracts for the development, manufacturing, and procurement of vaccines, therapeutics, and other critical medical countermeasures. Spending often increases during public health crises or perceived threats. These contracts can range from tens to hundreds of millions of dollars, supporting both research and scaled production. Analyzing specific historical data would reveal trends in contract types (e.g., CPFF, fixed-price), durations, and the types of biological products prioritized.

What are the implications of the contract's long duration (2127 days) for technological relevance and risk?

A contract duration of 2127 days (approximately 5.8 years) for advanced biological product manufacturing implies a long-term strategic need, potentially for maintaining readiness or supporting ongoing product lifecycles. The primary implication is the risk of technological obsolescence or the emergence of superior alternatives during the contract period. The field of biotechnology and biological manufacturing is rapidly evolving. While the initial technology may be state-of-the-art, advancements could occur that make the contracted product or process less optimal over time. Mitigating this risk requires robust contract management, including provisions for incorporating new technologies or adapting to scientific breakthroughs where feasible, and careful initial selection of technologies with a reasonable expected lifespan.

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: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3 CEDARBROOK DR STE 1, CRANBURY, NJ, 08512

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

Financial Breakdown

Contract Ceiling: $164,816,922

Exercised Options: $86,180,679

Current Obligation: $86,180,679

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline