HHS awarded $28.8M for pharmaceutical preparation manufacturing, with Meridian Medical Technologies as the sole awardee

Contract Overview

Contract Amount: $28,788,122 ($28.8M)

Contractor: Meridian Medical Technologies, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-30

End Date: 2018-09-27

Contract Duration: 1,823 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONSMERIDIAN MEDICAL TECHNOLOGIES, INC.

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $28.8 million to MERIDIAN MEDICAL TECHNOLOGIES, LLC for work described as: IGF::OT::IGF FOR OTHER FUNCTIONSMERIDIAN MEDICAL TECHNOLOGIES, INC. Key points: 1. The contract's value of $28.8 million over five years suggests a significant investment in pharmaceutical preparedness. 2. The award was made under full and open competition, indicating a broad search for qualified vendors. 3. The contract type, Cost Plus Fixed Fee, allows for flexibility in project scope while ensuring a defined profit margin. 4. The duration of 1823 days (approximately 5 years) points to a long-term need for these pharmaceutical supplies. 5. The contract falls under the Pharmaceutical Preparation Manufacturing sector, crucial for public health emergencies. 6. The geographic location of the contractor in Maryland may influence distribution logistics.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the pharmaceuticals procured. However, a $28.8 million award over five years for pharmaceutical preparation manufacturing indicates a substantial commitment. The Cost Plus Fixed Fee structure means the government covers costs plus a predetermined fee, which can sometimes lead to higher overall spending if costs are not tightly managed. Further analysis would require comparing the unit costs of the specific pharmaceutical products against market rates or similar government contracts.

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. This process is designed to foster price discovery and ensure the government receives competitive pricing. The number of bidders is not specified, but the 'full and open' designation implies a robust competitive environment was sought.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through market forces, leading to better value for the funds expended.

Public Impact

The primary beneficiaries are likely the public, through the assurance of pharmaceutical supplies for potential health emergencies. The services delivered involve the manufacturing and preparation of pharmaceuticals, ensuring availability and readiness. The geographic impact is national, as the pharmaceuticals are intended for strategic national stockpiles or emergency response. Workforce implications include jobs in pharmaceutical manufacturing, quality control, and logistics within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending if cost controls are not rigorously applied.
Lack of specific product details makes it difficult to assess true value for money.
The five-year duration might not align with the shelf-life or evolving needs of certain pharmaceuticals.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract addresses a critical need for pharmaceutical preparedness.
The fixed fee component provides some predictability in contractor profit.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, a critical component of the healthcare and defense industrial base. This sector is characterized by high regulatory standards, complex supply chains, and significant R&D investment. Government spending in this area often focuses on ensuring national stockpiles for public health emergencies, such as pandemics or bioterrorism events. Comparable spending benchmarks would depend on the specific types and quantities of pharmaceuticals being manufactured.

Small Business Impact

There is no indication that this contract included small business set-asides. The prime contractor, Meridian Medical Technologies, LLC, is not typically classified as a small business. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The overall impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). Mechanisms would include regular reporting requirements, performance reviews, and potentially audits. Transparency is facilitated by contract databases like FPDS, but detailed operational oversight specifics are usually internal to the agency.

Related Government Programs

Strategic National Stockpile
Biomedical Advanced Research and Development Authority (BARDA) contracts
Public Health Emergency Preparedness

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Lack of specific product details hinders comprehensive value assessment.
Contract duration may not align with pharmaceutical shelf-life or evolving needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $28.8 million to MERIDIAN MEDICAL TECHNOLOGIES, LLC. IGF::OT::IGF FOR OTHER FUNCTIONSMERIDIAN MEDICAL TECHNOLOGIES, INC.

Who is the contractor on this award?

The obligated recipient is MERIDIAN MEDICAL TECHNOLOGIES, LLC.

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 $28.8 million.

What is the period of performance?

Start: 2013-09-30. End: 2018-09-27.

What specific pharmaceutical products are covered under this contract?

The provided data does not specify the exact pharmaceutical products manufactured under this contract. It falls under the general category of 'Pharmaceutical Preparation Manufacturing.' To fully assess the contract's value and impact, understanding the specific drugs, vaccines, or medical countermeasures procured is essential. This information would allow for a comparison against market prices, shelf-life considerations, and the criticality of the items for national health security. Without this detail, the analysis remains at a high level, focusing on the manufacturing process and preparedness aspect rather than the intrinsic value of the end products.

How does the $28.8 million value compare to similar pharmaceutical preparedness contracts?

Comparing the $28.8 million value requires context on the specific nature of the pharmaceuticals and the duration of similar contracts. Contracts for essential medicines or pandemic-specific countermeasures can vary widely in cost. For instance, contracts for vaccine development and manufacturing can run into hundreds of millions, while those for stockpiling existing drugs might be significantly less. The five-year term of this contract ($5.76 million annually on average) suggests a sustained need. To provide a precise comparison, one would need to identify contracts with similar objectives (e.g., maintaining a stockpile of specific therapeutic agents) and similar timeframes, adjusting for inflation and the scale of production.

What are the key performance indicators (KPIs) used to evaluate Meridian Medical Technologies' performance?

The provided data does not detail the specific Key Performance Indicators (KPIs) for this contract. However, typical KPIs for pharmaceutical manufacturing contracts awarded under a Cost Plus Fixed Fee structure would likely include metrics related to production quality (e.g., adherence to Good Manufacturing Practices - GMP), delivery timelines, inventory management, and compliance with regulatory standards. Performance would also be assessed against the fixed fee, ensuring the contractor meets contractual obligations efficiently. The agency (HHS/ASPR) would establish these KPIs to ensure the readiness and availability of critical pharmaceutical supplies.

What is the historical spending pattern for pharmaceutical preparation manufacturing by HHS?

Historical spending patterns for pharmaceutical preparation manufacturing by HHS are substantial, particularly in recent years due to increased focus on pandemic preparedness. While this specific $28.8 million contract spans from 2013 to 2018, broader HHS spending in this category has likely fluctuated based on perceived threats and strategic priorities. For example, spending may have increased significantly during and after the COVID-19 pandemic. Analyzing historical data from sources like USAspending.gov or agency budget reports would reveal trends, identify major awardees, and highlight shifts in investment towards different types of pharmaceutical preparedness.

What are the risks associated with a Cost Plus Fixed Fee contract for pharmaceutical manufacturing?

Cost Plus Fixed Fee (CPFF) contracts, like this one, carry inherent risks. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to cover all allowable costs plus a predetermined fee. If the contractor's costs escalate unexpectedly, the total contract value increases, potentially exceeding initial estimates. For pharmaceutical manufacturing, this could mean higher prices for essential medicines or countermeasures. Mitigating this risk requires robust government oversight, clear definitions of allowable costs, and strong negotiation of the fixed fee based on realistic cost projections.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation 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: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pfizer Inc (UEI: 001326495)

Address: 6350 STEVENS FOREST RD STE 301, COLUMBIA, MD, 21046

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: $28,788,122

Exercised Options: $28,788,122

Current Obligation: $28,788,122

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline