HHS awarded $99.9M to Emergent BioDefense for R&D in Biotechnology, a sole-source contract

Contract Overview

Contract Amount: $99,941,720 ($99.9M)

Contractor: Emergent Biodefense Operations Lansing LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2017-03-16

End Date: 2019-03-15

Contract Duration: 729 days

Daily Burn Rate: $137.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: IGF::OT::IGF

Place of Performance

Location: LANSING, INGHAM County, MICHIGAN, 48906

State: Michigan Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $99.9 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC for work described as: IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development in Biotechnology is a critical sector for public health. 3. The contract duration of 729 days suggests a significant project scope. 4. Firm Fixed Price contract type aims to control costs, but competition is key. 5. The awardee, Emergent BioDefense, is a significant player in biodefense. 6. No small business set-aside was utilized for this large contract.

Value Assessment

Rating: questionable

Benchmarking the value of this $99.9 million contract is challenging without detailed task orders and deliverables. However, the sole-source nature raises concerns about whether the government achieved the best possible price. Comparing it to similar sole-source R&D contracts in biotechnology would be necessary for a more precise assessment. The firm fixed-price structure provides some cost certainty, but the lack of competition could lead to inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required services or supplies. The lack of competition means that the government did not benefit from a bidding process, which could have driven down prices and spurred innovation from multiple vendors. The justification for a sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects the most economical option available in the market.

Public Impact

The primary beneficiary is the Department of Health and Human Services, specifically the Office of Assistant Secretary for Preparedness and Response, in advancing biodefense capabilities. The contract supports research and development in biotechnology, potentially leading to advancements in medical countermeasures and public health preparedness. The geographic impact is primarily within Michigan, where the contractor is located, but the outcomes of the R&D could have national or global implications. Workforce implications may include specialized scientific and technical roles within Emergent BioDefense and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to limited competition.
Dependence on a single contractor for critical biodefense R&D.

Positive Signals

Focus on critical R&D in biotechnology for public health.
Firm Fixed Price contract provides cost certainty.
Contractor is a known entity in the biodefense sector.

Sector Analysis

The biotechnology research and development sector is characterized by high innovation, significant investment, and often long development cycles. Government contracts in this area are crucial for advancing public health initiatives, biodefense, and medical countermeasures. Spending in this sector can range from early-stage research to late-stage development and manufacturing. Comparable spending benchmarks would depend on the specific nature of the R&D, such as vaccine development, therapeutic research, or diagnostic tools.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a large sole-source award, the primary focus is likely on the capabilities of the prime contractor, Emergent BioDefense. This means opportunities for small businesses would likely be through direct subcontracting by Emergent, rather than through a mandated set-aside program.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve program managers within HHS, contract officers, and potentially the Inspector General's office if any irregularities arise. Transparency is limited due to the sole-source nature and the proprietary aspects of R&D. Accountability would be measured against the achievement of research milestones and deliverables outlined in the contract.

Related Government Programs

Biodefense Programs
Medical Countermeasures
Biotechnology Research Grants
Public Health Emergency Preparedness
National Biologics Security Enterprise

Risk Flags

Sole-source award without clear justification.
Potential for lack of competitive pricing.
Limited transparency on specific R&D deliverables.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $99.9 million to EMERGENT BIODEFENSE OPERATIONS LANSING LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is EMERGENT BIODEFENSE OPERATIONS LANSING 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 $99.9 million.

What is the period of performance?

Start: 2017-03-16. End: 2019-03-15.

What specific research and development activities were funded by this $99.9 million contract?

The provided data indicates the contract is for 'Research and Development in Biotechnology' awarded to Emergent BioDefense. However, the specific R&D activities, such as the development of vaccines, therapeutics, diagnostics, or other biodefense-related technologies, are not detailed in the summary data. A thorough review of the contract's statement of work (SOW) and any task orders would be necessary to understand the precise nature of the research, including the scientific objectives, methodologies, and expected outcomes. This level of detail is crucial for assessing the contract's alignment with public health priorities and the value derived from the investment.

What is Emergent BioDefense's track record with government contracts, particularly sole-source awards?

Emergent BioDefense has a significant history of contracting with U.S. government agencies, particularly the Department of Health and Human Services (HHS) and the Department of Defense, often related to biodefense and public health preparedness. They have been a key contractor for products like anthrax vaccines (BioThrax) and smallpox vaccines (ACAM2000). Their track record includes both competitively awarded and sole-source contracts. Sole-source awards to Emergent have sometimes drawn scrutiny regarding pricing and justification, highlighting the importance of robust oversight and competitive processes where feasible. Understanding their performance on previous sole-source R&D contracts would provide context for this award.

How does the $99.9 million award compare to other biotechnology R&D contracts awarded by HHS?

Without specific details on the scope and deliverables of this $99.9 million contract, a direct comparison to other HHS biotechnology R&D contracts is difficult. However, this amount represents a substantial investment. HHS awards numerous contracts in the R&D space, ranging from small grants for early-stage research to multi-million dollar agreements for advanced development and manufacturing. To benchmark this award, one would need to identify comparable contracts based on research area (e.g., infectious disease, biowarfare defense), contract type (e.g., cost-plus, fixed-price), and contract duration. The sole-source nature of this award also distinguishes it from competitively bid R&D contracts, which typically aim for greater price efficiency.

What are the key risks associated with a sole-source R&D contract of this magnitude?

The primary risks associated with a sole-source R&D contract of this magnitude include: 1) **Price:** The absence of competition can lead to higher prices than might be achieved through a competitive bidding process. 2) **Innovation Stagnation:** Relying on a single contractor may limit exposure to diverse innovative approaches that could emerge from a competitive environment. 3) **Contractor Performance:** If the sole-source contractor underperforms or faces financial difficulties, the government has limited alternatives for continuing the critical R&D. 4) **Scope Creep:** Without the pressure of competing offers, there might be a greater tendency for contract scope to expand without corresponding price adjustments. Robust oversight and clear performance metrics are essential to mitigate these risks.

What historical spending patterns exist for biotechnology R&D within HHS, and how does this contract fit?

HHS has consistently allocated significant funding towards biotechnology R&D, driven by its mission to protect and improve the health of Americans. Historical spending patterns show substantial investments in areas such as vaccine development, infectious disease research, cancer research, and biodefense countermeasures. This $99.9 million contract, awarded to Emergent BioDefense for R&D in biotechnology, aligns with HHS's strategic focus on preparedness and response to public health threats. It represents a significant, albeit singular, investment within the broader portfolio of HHS R&D spending, likely aimed at addressing specific national security or public health vulnerabilities.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 17100SOL00010

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emergent Biosolutions Inc. (UEI: 173570271)

Address: 3500 N MARTIN LUTHER KING JR BLVD # 1, LANSING, MI, 48906

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: $99,941,720

Exercised Options: $99,941,720

Current Obligation: $99,941,720

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline