HHS awards $69.7M contract to Pfizer for biotechnology R&D, spanning nearly a decade

Contract Overview

Contract Amount: $69,739,002 ($69.7M)

Contractor: Pfizer Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2015-09-15

End Date: 2025-09-30

Contract Duration: 3,668 days

Daily Burn Rate: $19.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: R&D

Official Description: IGF::OT::IGF

Plain-Language Summary

Department of Health and Human Services obligated $69.7 million to PFIZER INC for work described as: IGF::OT::IGF Key points: 1. Contract value represents a significant investment in biotechnology research and development. 2. Long contract duration suggests a sustained need for the services provided. 3. Pfizer's established presence in the pharmaceutical sector indicates a strong incumbent advantage. 4. The 'Cost No Fee' contract type shifts risk to the government for R&D efforts. 5. Full and open competition was utilized, suggesting a broad search for qualified contractors. 6. The contract's focus on R&D in biotechnology aligns with national health priorities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specific R&D focus and long duration. The 'Cost No Fee' structure, while common in R&D, means the government bears the financial risk if the research does not yield expected results. Without detailed breakdowns of research milestones and deliverables, assessing the precise value-for-money is difficult. However, the substantial award amount suggests a significant scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple potential bidders were solicited. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition aims to secure the best possible value for taxpayers by allowing a wide range of qualified entities to bid, potentially driving down costs through market forces.

Public Impact

The primary beneficiary is the Department of Health and Human Services, advancing its research and preparedness goals. The contract supports critical research and development in biotechnology, potentially leading to advancements in public health. Geographic impact is likely national, given the nature of federal R&D funding and its potential applications. Workforce implications include employment for scientists, researchers, and support staff within Pfizer and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' structure places the financial risk of research failure on the government.
Long-term R&D contracts can be subject to scope creep or evolving research needs.
Dependence on a single large contractor for critical R&D may limit future flexibility.
Assessing the true return on investment for R&D can be inherently difficult and time-consuming.

Positive Signals

Awarding to a well-established entity like Pfizer suggests a high likelihood of technical capability and project execution.
Full and open competition indicates an effort to find the most capable and cost-effective solution.
The long contract duration allows for sustained focus and development on complex research objectives.
The contract aligns with strategic national interests in biotechnology advancement.

Sector Analysis

This contract falls within the Biotechnology Research and Development sector, a critical area for advancing healthcare and addressing public health challenges. The market for biotechnology R&D is characterized by high innovation, significant investment, and a mix of large pharmaceutical companies and specialized research firms. Federal spending in this area often supports foundational research, vaccine development, and therapeutic innovation, with contracts ranging from small grants to large-scale development agreements.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Pfizer, is a large entity. It is possible that subcontracting opportunities may exist for small businesses within the biotechnology supply chain or specialized research areas, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services, specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms likely include regular progress reports, milestone reviews, and financial audits. The 'Cost No Fee' nature necessitates close monitoring of expenditures and research progress to ensure accountability and manage government risk.

Related Government Programs

Biotechnology Research Grants
Vaccine Development Programs
Medical Countermeasures Initiatives
National Institutes of Health (NIH) Research Contracts

Risk Flags

Long contract duration increases exposure to changing priorities and technological obsolescence.
'Cost No Fee' structure places financial risk entirely on the government.
R&D outcomes are inherently uncertain, posing a risk to return on investment.
Dependence on a single large contractor may limit future agility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $69.7 million to PFIZER INC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is PFIZER 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 $69.7 million.

What is the period of performance?

Start: 2015-09-15. End: 2025-09-30.

What is Pfizer's track record with similar government R&D contracts?

Pfizer has a long and extensive history of engaging with government agencies, particularly the Department of Health and Human Services (HHS) and the Department of Defense, on research and development initiatives. This includes significant work on vaccine development (e.g., COVID-19 vaccines), therapeutic research, and medical countermeasure development. Their track record generally indicates a strong capacity for large-scale R&D projects, navigating complex regulatory environments, and meeting stringent government requirements. However, like any large contractor, specific contract performance can vary, and a detailed review of past performance metrics for similar cost-reimbursable or cost-no-fee R&D contracts would be necessary for a comprehensive assessment.

How does the $69.7 million value compare to other federal biotechnology R&D contracts?

The $69.7 million award value for this 10-year contract is substantial but falls within the typical range for significant federal biotechnology research and development efforts. Large-scale projects, especially those involving vaccine development, advanced therapeutic research, or the creation of medical countermeasures, often command tens to hundreds of millions of dollars over several years. For instance, contracts awarded by agencies like the National Institutes of Health (NIH), Biomedical Advanced Research and Development Authority (BARDA), or the Defense Advanced Research Projects Agency (DARPA) for similar R&D objectives can easily reach or exceed this magnitude. The long duration (nearly 10 years) also contributes to the overall value, spreading the cost over an extended period.

What are the primary risks associated with a 'Cost No Fee' R&D contract of this nature?

The primary risk associated with a 'Cost No Fee' (CNF) contract, particularly in R&D, is that the government bears the full financial burden if the research project does not achieve its objectives or is terminated. Unlike cost-plus-fee contracts where the contractor has a financial incentive to manage costs effectively to earn their fee, in a CNF contract, the contractor is reimbursed for allowable costs but does not earn a separate fee. This can potentially reduce the contractor's motivation to control costs rigorously, although ethical considerations and future business prospects still play a role. The government also risks investing significant funds into research that may not yield a usable product or breakthrough, making robust oversight and clear performance metrics crucial.

What does the 'Research and Development in Biotechnology' (NAICS 541711) classification imply for this contract?

The NAICS code 541711, 'Research and Development in Biotechnology (except Nanotechnology),' signifies that the core purpose of this contract is to conduct scientific research and experimental development in the field of biotechnology. This typically involves work in areas such as genetic engineering, pharmaceutical development, biological manufacturing processes, and other life sciences applications. Contracts under this code often focus on innovation, discovery, and the creation of new knowledge or products. It implies a high degree of scientific expertise is required from the contractor, and the outcomes are often uncertain, aligning with the inherent risks of R&D.

How does the contract's duration (3668 days) impact its overall assessment?

The contract duration of 3668 days, approximately 10 years, is exceptionally long for a federal contract and indicates a strategic, long-term commitment by the Department of Health and Human Services to the specific biotechnology research objectives. Such extended periods are typically reserved for complex, multi-phase R&D projects where sustained effort and iterative development are necessary. This duration allows for deeper exploration, potential pivots in research direction based on findings, and the development of more mature technologies or products. However, it also increases the risk of budget fluctuations, changes in government priorities, and the potential for the contracted technology to become outdated before completion.

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

Solicitation ID: CBRNBAA13100SOL00013

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 235 E 42ND ST, NEW YORK, NY, 10017

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $94,738,336

Exercised Options: $94,738,336

Current Obligation: $69,739,002

Actual Outlays: $18,678,023

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline