HHS awarded $157M for biological product manufacturing, with a significant portion potentially going to a single large business

Contract Overview

Contract Amount: $157,298,365 ($157.3M)

Contractor: Amgen USA Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-25

End Date: 2018-09-18

Contract Duration: 1,819 days

Daily Burn Rate: $86.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF TASK ORDER 1 UNDER RFP-12-100-SOL-00016

Place of Performance

Location: NEWBURY PARK, VENTURA County, CALIFORNIA, 91320

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $157.3 million to AMGEN USA INC for work described as: IGF::OT::IGF TASK ORDER 1 UNDER RFP-12-100-SOL-00016 Key points: 1. The contract's value of $157 million over five years suggests a substantial investment in biological product manufacturing capabilities. 2. While the contract was competed, the relatively low number of bids (2) warrants scrutiny regarding the breadth of competition. 3. The fixed-price contract type offers cost certainty but may limit flexibility if unforeseen issues arise in manufacturing. 4. The duration of 1819 days indicates a long-term need for these biological products, potentially for preparedness or ongoing supply. 5. The contract's focus on biological product manufacturing places it within a critical and often high-cost sector of healthcare. 6. The absence of small business set-aside flags suggests this contract was primarily aimed at larger, established manufacturers.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the biological products procured. However, a $157 million award over five years for manufacturing services indicates a significant investment. The contract was awarded under a firm-fixed-price structure, which typically aims for cost control. Further analysis would require comparing the per-unit cost of the manufactured products against market rates or similar government procurements to assess true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive sign for taxpayer value. However, only two bids were received. This limited number of bidders could indicate high barriers to entry in this specialized manufacturing sector, or potentially a lack of outreach to a wider pool of qualified vendors. While competition occurred, the low bid count might have constrained price negotiation.

Taxpayer Impact: A limited number of bidders, even in a full and open competition, can sometimes lead to higher prices than if more vendors were vying for the contract, potentially impacting the efficient use of taxpayer funds.

Public Impact

The primary beneficiaries are likely government agencies requiring a steady supply of specific biological products, potentially for public health initiatives or emergency preparedness. The services delivered involve the manufacturing of biological products, which are critical for various medical and research applications. The contract is associated with a California-based contractor, suggesting potential economic impact and job creation within that state. The workforce implications would involve skilled labor in biological manufacturing, quality control, and related scientific fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) raises questions about whether the government secured the best possible pricing.
The fixed-price nature might not adequately account for potential cost overruns in complex biological manufacturing.
Lack of small business participation could limit opportunities for smaller, innovative firms in this sector.

Positive Signals

Awarded under full and open competition, adhering to standard procurement practices.
Firm-fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable, ongoing need for the procured biological products.

Sector Analysis

The biological product manufacturing sector is a highly specialized and regulated industry. It encompasses the production of a wide range of goods, from vaccines and therapeutics to diagnostic agents. This contract likely fits within the broader pharmaceutical and biotechnology market, which is characterized by significant R&D investment, stringent quality control, and complex supply chains. Government spending in this area often supports national health security, research initiatives, and the availability of essential medicines.

Small Business Impact

This contract was not set aside for small businesses, and the contractor is likely a large entity given the award amount. There is no explicit mention of subcontracting plans for small businesses. This suggests that opportunities for small businesses within this specific procurement may be limited, potentially concentrating the economic benefits among larger corporations.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) contracting officers and program managers. The Inspector General's office within HHS would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is generally maintained through contract databases, but specific performance metrics and detailed spending breakdowns may not be publicly available.

Related Government Programs

Biologics Contract Manufacturing
Pharmaceutical Manufacturing
Public Health Preparedness Contracts
Medical Countermeasures Procurement
Biotechnology Industry Support

Risk Flags

Limited Competition
Potential for Sole-Source Dependency
High Contract Value
Specialized Industry Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $157.3 million to AMGEN USA INC. IGF::OT::IGF TASK ORDER 1 UNDER RFP-12-100-SOL-00016

Who is the contractor on this award?

The obligated recipient is AMGEN USA 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 $157.3 million.

What is the period of performance?

Start: 2013-09-25. End: 2018-09-18.

What specific types of biological products are being manufactured under this contract?

The provided data indicates the contract is for 'Biological Product (except Diagnostic) Manufacturing' but does not specify the exact products. Given the awarding agency (HHS, specifically ASPR), these products could range from vaccines and therapeutics for public health emergencies to specialized biological agents for research or stockpiling. Without further details, it's impossible to pinpoint the exact nature of the biological products, which would significantly impact the assessment of their criticality and value.

How does the awarded amount of $157 million compare to similar biological product manufacturing contracts?

Comparing the $157 million award requires context on the specific biological products and their manufacturing complexity. Contracts for large-scale vaccine production or complex therapeutic manufacturing can easily reach these figures over a multi-year period. However, without knowing the quantity, type, and duration of manufacturing for this specific contract, a direct comparison is difficult. Benchmarking against contracts for similar product categories and volumes would be necessary to determine if this represents a fair market price or an outlier.

What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?

The provided data does not include specific Key Performance Indicators (KPIs) for this contract. Typically, for manufacturing contracts, KPIs would relate to production volume, quality control standards (e.g., defect rates, adherence to Good Manufacturing Practices - GMP), delivery timelines, and adherence to specifications. Performance against these would be monitored by the contracting officer's representative (COR). Without access to performance reports or contract-specific documentation, assessing the contractor's track record on this award is not possible from the given information.

What is the historical spending trend for biological product manufacturing by the Department of Health and Human Services?

Historical spending on biological product manufacturing by HHS can fluctuate significantly based on public health needs, such as pandemic responses or the development of new medical countermeasures. Over the period this contract was active (2013-2018), HHS likely maintained consistent or increasing investment in this area due to ongoing research and preparedness efforts. Analyzing broader HHS budgets and specific solicitations for biologics manufacturing over the past decade would reveal trends, potentially showing increased focus following events like the H1N1 pandemic or anticipation of future health crises.

What is the risk associated with relying on only two bidders for a critical biological product manufacturing contract?

Relying on only two bidders for a critical biological product manufacturing contract introduces several risks. Firstly, it limits the government's ability to negotiate the best possible price, as competition is inherently reduced. Secondly, it increases the risk of supply chain disruption if one of the two contractors faces production issues, defaults, or decides to exit the market. This concentration of capability could also lead to less innovation over time if only a few players dominate the landscape. Ensuring robust contingency plans and potentially seeking to broaden the vendor base for future procurements would mitigate these risks.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12100SOL00016

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Amgen Inc. (UEI: 039976196)

Address: 1 AMGEN CTR DR, THOUSAND OAKS, CA, 91320

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

Financial Breakdown

Contract Ceiling: $157,298,365

Exercised Options: $157,298,365

Current Obligation: $157,298,365

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: SUPPLIES OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSO100201300006I

IDV Type: IDC

Timeline