HHS awarded $105M for pharmaceutical manufacturing, with 2 orders over 6 years

Contract Overview

Contract Amount: $104,962,000 ($105.0M)

Contractor: Emergent Manufacturing Operations Baltimore LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2014-09-30

End Date: 2020-03-31

Contract Duration: 2,009 days

Daily Burn Rate: $52.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19112

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $105.0 million to EMERGENT MANUFACTURING OPERATIONS BALTIMORE LLC for work described as: IGF::OT::IGF Key points: 1. The contract's value appears reasonable given the extended performance period and the nature of pharmaceutical manufacturing. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract was awarded as a firm fixed price, which shifts cost risk to the contractor. 4. The contract was awarded to a single entity, indicating a focus on specialized capabilities. 5. The contract's duration and value place it within a typical range for federal pharmaceutical support. 6. The contract was awarded by ASPR, a key agency for public health preparedness.

Value Assessment

Rating: good

The total award of $104.96 million over approximately six years (September 2014 to March 2020) for pharmaceutical preparation manufacturing suggests a moderate annual spend. Benchmarking against similar federal contracts for specialized manufacturing requires detailed analysis of scope and scale, but the firm fixed-price structure indicates a defined cost expectation. The contract's value seems aligned with the complexities and regulatory requirements inherent in pharmaceutical production for government needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two delivery orders suggests that the initial award was structured to allow for phased execution or specific project needs. While the number of bidders is not explicitly stated, full and open competition generally promotes a wider range of offers and can lead to better price discovery.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government sought the best value through an open process.

Public Impact

The primary beneficiaries are federal agencies requiring specialized pharmaceutical manufacturing capabilities, likely for public health preparedness or strategic stockpiling. The services delivered involve the manufacturing of pharmaceuticals, a critical component of healthcare and emergency response. The contract was awarded to a company located in Pennsylvania, indicating a potential geographic impact on the regional economy and workforce. This contract supports the pharmaceutical manufacturing sector, contributing to the nation's capacity for producing essential medicines.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if delivery orders expand beyond initial expectations.
Reliance on a single contractor for critical pharmaceutical manufacturing could pose supply chain risks.
Ensuring ongoing quality control and compliance throughout the contract's extended period is crucial.

Positive Signals

Firm fixed-price contract structure provides cost certainty.
Full and open competition suggests a robust selection process.
Long-term nature of the contract allows for sustained support and relationship building.
Awarded by a key preparedness agency (ASPR) indicates strategic importance.

Sector Analysis

The pharmaceutical preparation manufacturing sector is highly regulated and capital-intensive, involving complex processes for producing drugs and related materials. Federal spending in this area often supports national health security, emergency preparedness, and the maintenance of strategic reserves. Comparable spending benchmarks would typically involve analyzing contracts for vaccine production, specialized drug manufacturing, or the creation of medical countermeasures. This contract fits within the broader landscape of federal investment in maintaining a robust domestic pharmaceutical industrial base.

Small Business Impact

There is no indication that this contract included a small business set-aside. The nature of pharmaceutical manufacturing often requires significant infrastructure and specialized expertise, which may favor larger, established firms. Subcontracting opportunities for small businesses could exist if the prime contractor engages them for specific components or services, but this is not explicitly detailed in the provided data. The overall impact on the small business ecosystem would depend on the extent of any subcontracting.

Oversight & Accountability

Oversight for this contract would likely fall under the Department of Health and Human Services, specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified goods or services within the agreed-upon cost. Transparency is generally maintained through federal contract databases, though specific performance metrics and detailed oversight reports may not always be publicly accessible. The Inspector General for HHS would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Strategic National Stockpile
Biomedical Advanced Research and Development Authority (BARDA) contracts
Department of Defense pharmaceutical procurements
National Institutes of Health (NIH) research and development grants

Risk Flags

Contract duration exceeds typical shorter-term procurements.
Potential for supply chain vulnerability due to reliance on specific manufacturing capabilities.
Need for ongoing quality assurance in a highly regulated industry.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $105.0 million to EMERGENT MANUFACTURING OPERATIONS BALTIMORE LLC. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is EMERGENT MANUFACTURING OPERATIONS BALTIMORE 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 $105.0 million.

What is the period of performance?

Start: 2014-09-30. End: 2020-03-31.

What was the specific nature of the pharmaceutical preparations manufactured under this contract?

The provided data indicates the contract was for 'Pharmaceutical Preparation Manufacturing' (NAICS 325412). However, the specific types of pharmaceutical preparations are not detailed. Given the awarding agency, the Office of Assistant Secretary for Preparedness and Response (ASPR), it is highly probable that these preparations were related to public health emergencies, pandemic preparedness, or the maintenance of the Strategic National Stockpile. This could include antivirals, antibiotics, vaccines, or other critical medical countermeasures. Further investigation into the specific delivery orders or contract modifications would be necessary to ascertain the exact products.

How does the awarded amount of $104.96 million compare to similar federal contracts for pharmaceutical manufacturing?

Benchmarking this $104.96 million contract requires a detailed comparison of scope, scale, duration, and specific product requirements. Federal contracts for pharmaceutical manufacturing can vary significantly, from small R&D grants to multi-billion dollar agreements for vaccine production or large-scale drug manufacturing. Given this contract's ~6-year duration and its award by ASPR, the value appears moderate for supporting preparedness or stockpile needs. Contracts for novel drug development or large-scale vaccine production for a national rollout would likely be substantially higher. Conversely, smaller contracts might focus on specific niche preparations or research.

What are the key risks associated with a firm fixed-price contract for pharmaceutical manufacturing over a six-year period?

A primary risk with a firm fixed-price (FFP) contract over an extended period like six years is the potential for the contractor to face unforeseen cost increases due to market fluctuations in raw materials, labor, or energy, which they must absorb. Conversely, if costs decrease significantly, the government might overpay relative to actual expenses. For pharmaceutical manufacturing, risks also include potential delays in regulatory approvals, supply chain disruptions for critical ingredients, or the need for contract modifications if the product requirements evolve due to new scientific understanding or changing public health needs. Ensuring the contractor maintains stringent quality control and compliance throughout the long duration is also a continuous risk.

What does the 'PA' contract status code signify in this context?

The 'PA' contract status code typically signifies 'Production Award' or a similar designation indicating that the contract is for the production phase of a product or service, rather than research and development or initial prototyping. In the context of pharmaceutical preparation manufacturing, 'PA' suggests that the contract was awarded for the actual manufacturing and delivery of established pharmaceutical products. This aligns with the firm fixed-price nature and the substantial award amount, indicating a commitment to producing a defined quantity or type of pharmaceutical preparation.

What is the significance of the contract being awarded to 'EMERGENT MANUFACTURING OPERATIONS BALTIMORE LLC'?

The award to 'EMERGENT MANUFACTURING OPERATIONS BALTIMORE LLC' signifies the government's selection of this specific entity for its capabilities in pharmaceutical preparation manufacturing. Emergent BioSolutions (the parent company) is known for its work in biodefense and public health threats, often producing medical countermeasures. This award suggests that the company met the government's stringent requirements for quality, capacity, regulatory compliance, and potentially, its ability to scale production rapidly. The government likely assessed Emergent's track record, facilities, and expertise as critical factors in awarding this significant contract.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 5901 E LOMBARD ST, BALTIMORE, MD, 21224

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: $104,962,000

Exercised Options: $104,962,000

Current Obligation: $104,962,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSO100201300008I

IDV Type: IDC

Timeline