HHS awarded CUBRC $61.3M for novel antibiotic development, a 7-year R&D effort

Contract Overview

Contract Amount: $61,300,216 ($61.3M)

Contractor: Cubrc, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2012-02-01

End Date: 2019-12-31

Contract Duration: 2,890 days

Daily Burn Rate: $21.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CUBRC: DEVELOPMENT OF A NOVEL ANTIBIOTIC FOR THE TREATMENT OF SELECT BACTERIAL INFECTIONS.

Place of Performance

Location: BUFFALO, ERIE County, NEW YORK, 14225

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $61.3 million to CUBRC, INC. for work described as: CUBRC: DEVELOPMENT OF A NOVEL ANTIBIOTIC FOR THE TREATMENT OF SELECT BACTERIAL INFECTIONS. Key points: 1. The contract's value of over $61 million for a 7-year research and development project suggests a significant investment in addressing critical bacterial infections. 2. Full and open competition was utilized, indicating a broad search for qualified contractors, which can lead to better pricing and innovation. 3. The 'Cost Plus Fixed Fee' contract type carries inherent risks of cost overruns, requiring robust oversight to manage expenses effectively. 4. The project's focus on antibiotic development places it within a critical sector for public health preparedness and response. 5. Performance duration of nearly 8 years highlights the long-term nature of complex R&D initiatives. 6. The contract was awarded to CUBRC, Inc., a single entity, suggesting specialized capabilities were sought for this specific research.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the research scope and deliverables. However, $61.3 million over nearly 8 years for advanced R&D in antibiotic development is substantial. The 'Cost Plus Fixed Fee' structure, while common in R&D, can lead to higher costs compared to fixed-price contracts if not managed tightly. Comparing it to similar government-funded antibiotic research programs would provide a clearer picture of value for money, but such data is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. This approach generally fosters a competitive environment, potentially leading to more favorable pricing and innovative solutions. The number of bidders (4) indicates a moderate level of competition for this specialized R&D requirement.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value by allowing a wide range of contractors to compete, driving down costs and encouraging innovation.

Public Impact

The primary beneficiaries are public health, through the potential development of new antibiotics to combat resistant bacterial infections. The service delivered is research and development aimed at creating a novel therapeutic agent. The geographic impact is national, focusing on improving the US's capacity to handle public health emergencies related to infectious diseases. Workforce implications include employment for scientists, researchers, and support staff at CUBRC, Inc. and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored.
Long project duration (nearly 8 years) increases the risk of scope creep or changes in research priorities.
Reliance on a single contractor (CUBRC, Inc.) for this critical R&D may pose a risk if performance falters.

Positive Signals

Awarded under full and open competition, suggesting a thorough vetting process and potential for competitive pricing.
Focus on a critical public health need (antibiotic resistance) aligns with national priorities.
Significant investment indicates a commitment to advancing medical countermeasures.

Sector Analysis

This contract falls within the Biotechnology Research and Development sector, a critical area for national security and public health. The market for antibiotic development is complex, facing challenges from scientific hurdles to economic viability. Government funding, like this contract, is crucial for de-risking early-stage research and incentivizing the development of novel treatments for infectious diseases, especially those with high public health impact or potential for antimicrobial resistance.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the specialized nature of advanced R&D in biotechnology, it is likely that the prime contractor, CUBRC, Inc., possesses unique capabilities. However, opportunities for small businesses may exist through subcontracting, depending on CUBRC's procurement strategy and the specific research needs.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms would include regular progress reports, milestone reviews, and financial audits. Transparency is facilitated through contract award data, though detailed research progress is often proprietary. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Biotechnology Research
Antibiotic Development Programs
Public Health Preparedness
Medical Countermeasures
National Institutes of Health (NIH) Research Grants
Department of Defense (DoD) Medical Research

Risk Flags

Cost Overruns Risk (CPFF Contract)
Long Project Duration
Specialized R&D Focus
Potential for Limited Commercial Viability (Antibiotic Market Challenges)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $61.3 million to CUBRC, INC.. CUBRC: DEVELOPMENT OF A NOVEL ANTIBIOTIC FOR THE TREATMENT OF SELECT BACTERIAL INFECTIONS.

Who is the contractor on this award?

The obligated recipient is CUBRC, 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 $61.3 million.

What is the period of performance?

Start: 2012-02-01. End: 2019-12-31.

What is CUBRC, Inc.'s track record in developing novel antibiotics or similar biomedical products?

CUBRC, Inc. is primarily known for its work in defense-related research and development, including areas like sensor technology, advanced computing, and electronic warfare. While they possess significant R&D capabilities, their specific track record in developing novel antibiotics or bringing pharmaceutical products to market is less prominent compared to dedicated biotechnology or pharmaceutical firms. This contract represents a significant diversification into the biomedical R&D space for the company. Further investigation into their specific biomedical research portfolio and any prior successes in drug development would be necessary for a comprehensive assessment of their suitability and past performance in this particular domain.

How does the $61.3 million cost compare to similar government-funded antibiotic R&D projects?

Comparing the $61.3 million cost directly to similar projects is complex due to variations in research scope, duration, and specific objectives. However, government funding for antibiotic R&D can range widely, from smaller grants for early-stage discovery to multi-year, multi-million dollar contracts for advanced development. Projects focused on novel mechanisms of action, targeting highly resistant pathogens, or involving extensive preclinical and clinical development phases typically command higher budgets. Given this contract's 7-year duration and focus on developing a 'novel antibiotic,' the $61.3 million appears to be within the expected range for a substantial, long-term R&D investment in this critical but challenging field. Benchmarking against specific programs like BARDA (Biomedical Advanced Research and Development Authority) initiatives could provide more precise comparisons.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract for antibiotic development?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for antibiotic development revolve around cost control and contractor efficiency. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This can incentivize cost-consciousness up to a point, but it also means that if research proves more expensive than initially anticipated, the government bears the cost. There's a risk of scope creep, where research objectives expand beyond the original intent, leading to increased costs. Furthermore, the fixed fee might not adequately incentivize the contractor to find the most cost-effective research methods if they are guaranteed their profit regardless of efficiency. Robust oversight, clear milestones, and stringent review of cost proposals are essential to mitigate these risks.

What is the expected impact of this contract on the development of treatments for antibiotic-resistant bacteria?

This contract is directly aimed at addressing the critical threat of antibiotic-resistant bacteria by funding the development of a novel antibiotic. The success of this project could lead to a new therapeutic option for treating infections caused by pathogens that are no longer effectively treated by existing drugs. Such advancements are crucial for maintaining the efficacy of modern medicine, which relies heavily on the ability to treat bacterial infections. The development of new antibiotics is a lengthy and high-risk endeavor, making government investment like this vital for stimulating innovation in an area where market incentives alone have often been insufficient.

How has federal spending on antibiotic R&D evolved, and does this contract represent a significant trend?

Federal spending on antibiotic R&D has seen fluctuations but has generally been recognized as insufficient to meet the growing threat of antimicrobial resistance (AMR). In recent years, there has been increased attention and dedicated funding initiatives from agencies like HHS (including ASPR and NIH) and DoD to incentivize the development of new antibiotics and diagnostics. This $61.3 million contract awarded to CUBRC, Inc. represents a significant, single-source investment within this broader trend of increased federal focus on AMR countermeasures. It aligns with strategic goals to bolster the nation's pipeline of effective treatments against resistant pathogens, reflecting a growing commitment rather than an isolated event.

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: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4455 GENESEE ST, BUFFALO, NY, 14225

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

Financial Breakdown

Contract Ceiling: $87,625,099

Exercised Options: $61,300,216

Current Obligation: $61,300,216

Actual Outlays: $1,898

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $51,238,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline