HHS awards $75M+ R&D contract for advanced skin substitutes, with a 9-year duration

Contract Overview

Contract Amount: $75,284,563 ($75.3M)

Contractor: Stratatech Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2015-09-29

End Date: 2024-09-28

Contract Duration: 3,287 days

Daily Burn Rate: $22.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CELL BASED SKIN SUBS FOR DEFINITIVE CARE OF BURN INJURIES

Place of Performance

Location: MADISON, DANE County, WISCONSIN, 53719

State: Wisconsin Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $75.3 million to STRATATECH CORPORATION for work described as: CELL BASED SKIN SUBS FOR DEFINITIVE CARE OF BURN INJURIES Key points: 1. Contract awarded for critical medical research, potentially impacting patient care. 2. Long contract duration suggests a sustained need for the developed technology. 3. Research and Development in Biotechnology is a high-impact sector. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility in research but requires careful cost oversight. 5. The awardee has a significant contract value, indicating a strong position in this niche. 6. The contract's focus on burn injury care addresses a specific and severe medical need.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and long duration. The Cost Plus Fixed Fee structure means costs can fluctuate, making direct price comparisons difficult without detailed cost breakdowns. However, the total award amount over nine years suggests a substantial investment in developing advanced medical technology. Further analysis would require comparing the projected outcomes and the cost per unit of research progress against similar R&D efforts in regenerative medicine or advanced wound care.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With 3 bidders, the competition level appears moderate for a specialized R&D contract. This suggests that while there was interest, the pool of qualified contractors may be limited. Moderate competition can lead to a more balanced price discovery than a sole-source award, but may not achieve the aggressive pricing seen in highly commoditized markets.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for advanced medical research. Moderate competition helps ensure that the government is not overpaying for the research services, while also encouraging innovation from multiple sources.

Public Impact

Patients suffering from severe burn injuries stand to benefit from the development of advanced skin substitutes. The research aims to deliver improved treatment options and potentially faster healing times. The geographic impact is national, as the developed technology could be deployed across healthcare facilities. Workforce implications include potential job creation in biotechnology research and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively and prevent overruns.
The long duration of the contract necessitates ongoing performance monitoring to ensure milestones are met.
The specialized nature of the R&D may present challenges in assessing progress and value for money.

Positive Signals

Awarded through full and open competition, ensuring a broad search for qualified contractors.
The contract addresses a critical medical need, indicating a strong alignment with public health goals.
The significant investment signals a commitment to advancing medical technology.

Sector Analysis

This contract falls within the Biotechnology Research and Development sector, a rapidly evolving field focused on leveraging biological processes for innovation. The market for advanced wound care and regenerative medicine is substantial, driven by an aging population and increasing incidence of chronic wounds and severe injuries. This contract represents a significant investment in a niche area of medical technology, aiming to develop cutting-edge solutions that could set new benchmarks in patient treatment.

Small Business Impact

The contract data does not indicate any specific small business set-aside provisions. Given the specialized nature of the R&D and the significant contract value, it is likely that larger, established firms with extensive research capabilities were the primary bidders. There is no explicit information on subcontracting plans for small businesses, which could be an area for further inquiry to ensure opportunities are extended to the broader small business ecosystem.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely involve regular reviews of contractor expenditures, progress reports, and adherence to research milestones by the contracting officer and technical representatives. Accountability measures are built into the contract through performance metrics and payment schedules tied to deliverables. Transparency may be enhanced through public reporting on research outcomes, although proprietary information may limit full disclosure. The Inspector General's office may have jurisdiction depending on the specific funding and agency policies.

Related Government Programs

Biotechnology Research
Medical Device Development
Regenerative Medicine
Advanced Wound Care
Department of Health and Human Services Research Grants

Risk Flags

Long contract duration requires sustained oversight.
Cost Plus Fixed Fee structure necessitates careful cost management.
Specialized R&D may present challenges in performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $75.3 million to STRATATECH CORPORATION. CELL BASED SKIN SUBS FOR DEFINITIVE CARE OF BURN INJURIES

Who is the contractor on this award?

The obligated recipient is STRATATECH 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 $75.3 million.

What is the period of performance?

Start: 2015-09-29. End: 2024-09-28.

What is the track record of Stratatech Corporation in securing and performing on government R&D contracts, particularly in biotechnology?

Stratatech Corporation's track record with government R&D contracts, especially in biotechnology, would need to be thoroughly reviewed. Information on past performance, including successful delivery of research outcomes, adherence to budgets, and compliance with contract terms, is crucial. Analyzing previous awards, their values, durations, and the agency that issued them can provide insight into their capabilities and reliability. A history of successful, high-value R&D contracts suggests a strong capacity to manage complex projects and deliver innovative solutions. Conversely, any past performance issues, such as cost overruns, missed deadlines, or quality concerns, would raise red flags regarding their suitability for this significant award.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other R&D contract types in terms of value for money and risk for the government?

The Cost Plus Fixed Fee (CPFF) contract structure is often used for research and development where the scope of work is not precisely defined at the outset, allowing for flexibility as the project evolves. For the government, CPFF offers flexibility but carries a higher risk of cost overruns compared to fixed-price contracts, as the contractor is reimbursed for actual costs plus a predetermined fixed fee. This fee incentivizes the contractor to control costs to maximize their profit margin on the fee. Value for money is achieved if the research yields significant breakthroughs or innovations that justify the incurred costs. However, robust oversight is essential to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate for the effort involved. Other R&D contract types, like Cost-No-Fee or Firm-Fixed-Price (for well-defined R&D), shift risk differently.

What are the key performance indicators (KPIs) and milestones expected for this 9-year R&D contract, and how will progress be measured?

Key performance indicators (KPIs) and milestones for a 9-year R&D contract for skin substitutes would likely focus on the scientific and technical progress towards developing a viable product. These could include: successful completion of preclinical studies (e.g., in vitro and animal testing), demonstration of safety and efficacy in human clinical trials (Phase I, II, III), achievement of specific product characteristics (e.g., cell viability, integration with host tissue, durability), and regulatory milestones (e.g., Investigational New Drug applications, FDA approvals). Progress would be measured through regular technical progress reports, data submissions, peer-reviewed publications, and formal reviews at predetermined intervals. The contract would specify the criteria for successful completion of each milestone, which would then trigger payments of the fixed fee and reimbursement of costs.

What is the potential market size and impact of advanced skin substitutes for burn injuries, and how does this contract align with that?

Advanced skin substitutes for burn injuries represent a significant and growing market driven by the need for improved treatments that reduce scarring, infection risk, and recovery time. The global market for wound care, including advanced wound dressings and skin substitutes, is valued in the billions of dollars and is projected to continue expanding. This contract, with its substantial funding and long duration, directly aligns with capturing a significant portion of this market by fostering the development of potentially groundbreaking technologies. The success of this R&D effort could lead to a product that not only improves patient outcomes but also establishes a strong commercial position for the awardee, potentially displacing existing treatments and setting new standards of care.

How does the $75M+ award compare to historical federal spending on similar R&D initiatives in regenerative medicine or advanced wound care?

The $75 million-plus award for this 9-year R&D contract in advanced skin substitutes is a substantial investment, indicative of the government's commitment to critical medical advancements. To compare it to historical spending, one would need to analyze federal databases for R&D contracts within the regenerative medicine and advanced wound care sectors. Such analysis would reveal average contract values, durations, and the number of bidders for similar projects. For instance, comparing this to other large-scale NIH or BARDA-funded projects in tissue engineering or advanced biomaterials would provide context. A $75M+ award over 9 years suggests this is a high-priority, long-term research endeavor, potentially larger or more comprehensive than typical, shorter-term R&D grants or contracts in this field.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 15100SOL00018

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 510 CHARMANY DR STE 169, MADISON, WI, 53719

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

Financial Breakdown

Contract Ceiling: $235,674,166

Exercised Options: $75,284,563

Current Obligation: $75,284,563

Actual Outlays: $12,476,275

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline