DoD's $277M Medical Countermeasures Contract Shows Strong Value Despite Long Duration

Contract Overview

Contract Amount: $276,824,216 ($276.8M)

Contractor: Resilience Government Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-03-20

End Date: 2023-03-20

Contract Duration: 3,652 days

Daily Burn Rate: $75.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: MEDICAL COUNTERMEASURES ADVANCED DEVELOPMENT AND MANUFACTURING (MCM ADM) CAPABILITY

Place of Performance

Location: ALACHUA, ALACHUA County, FLORIDA, 32615

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $276.8 million to RESILIENCE GOVERNMENT SERVICES, INC. for work described as: MEDICAL COUNTERMEASURES ADVANCED DEVELOPMENT AND MANUFACTURING (MCM ADM) CAPABILITY Key points: 1. Contract demonstrates a commitment to long-term national health security through advanced manufacturing capabilities. 2. The use of a Cost Plus Fixed Fee (CPFF) pricing structure suggests a focus on managing complex R&D projects where costs can be variable. 3. The contract's duration of 10 years indicates a strategic, sustained investment in a critical capability. 4. While specific performance metrics are not detailed, the sustained award suggests satisfactory performance over its lifespan. 5. This contract positions the Department of Defense as a key player in ensuring the availability of essential medical countermeasures. 6. The significant investment underscores the importance of domestic manufacturing capacity for national security.

Value Assessment

Rating: good

The total award of $276.8 million over 10 years for advanced development and manufacturing of medical countermeasures represents a substantial, long-term investment. Benchmarking this against similar large-scale R&D and manufacturing contracts for specialized medical supplies is challenging due to the unique nature of national security-related countermeasures. However, the sustained funding over a decade suggests a consistent need and potentially a competitive pricing structure that has allowed for the delivery of critical capabilities. The CPFF contract type, while potentially leading to higher costs than fixed-price contracts, is often appropriate for complex development efforts where scope and cost are difficult to define upfront, aiming to balance contractor incentive with cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders, as suggested by the 'no' field, implies a reasonable level of competition for this specialized requirement. Full and open competition generally fosters price discovery and encourages contractors to offer competitive terms. The specific details of the bidding process and the number of proposals received would provide further insight into the intensity of the competition and its impact on the final negotiated price.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions. It ensures that government funds are used efficiently by selecting the best value offer from a broad pool of potential contractors.

Public Impact

The primary beneficiaries are the U.S. military personnel and potentially the broader civilian population, who gain access to advanced medical countermeasures during health crises or for specific operational needs. The contract supports the development and manufacturing of critical pharmaceutical preparations, enhancing national biodefense and public health preparedness. The geographic impact is primarily centered in Florida, where the contractor is located, potentially creating or sustaining high-skilled jobs in the pharmaceutical manufacturing sector. Workforce implications include the need for specialized scientific, engineering, and manufacturing personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 10-year duration of the contract, while indicating long-term commitment, also presents a risk of potential cost overruns or technological obsolescence if not actively managed and reviewed.
The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur more costs, as a portion of their profit is tied to the total cost, requiring robust oversight to ensure cost efficiency.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded a fair price and good value.
The sustained, long-term nature of the contract indicates a critical and ongoing need for these medical countermeasures, highlighting its strategic importance.
The contract supports advanced development and manufacturing capabilities, contributing to national health security and readiness.
The contractor's sustained award over a decade implies a track record of meeting the government's requirements and delivering on complex projects.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a highly specialized and regulated industry critical for national security and public health. This contract falls within the broader chemical and pharmaceutical manufacturing industry, which involves significant research and development, stringent quality control, and complex supply chains. The market size for such specialized medical countermeasures is driven by government demand for biodefense and pandemic preparedness. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of advanced development and the unique requirements of government contracts, but investments in this area are typically substantial and long-term.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Resilience Government Services, Inc., is likely a large business. There is no explicit information provided regarding subcontracting plans or goals for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem, though large prime contracts can sometimes lead to subcontracting opportunities for specialized services or supplies.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Given the Cost Plus Fixed Fee (CPFF) structure, rigorous financial oversight and auditing are crucial to ensure that costs are reasonable and allocable. The contract's long duration necessitates ongoing performance reviews and potential modifications to adapt to evolving threats and technologies. Transparency would be enhanced through regular reporting requirements from the contractor and potential reviews by the Government Accountability Office (GAO) or the Department of Defense's Inspector General, although specific IG jurisdiction details are not provided.

Related Government Programs

Biomedical Advanced Research and Development Authority (BARDA) contracts
Department of Health and Human Services (HHS) pandemic preparedness initiatives
Department of Defense (DoD) chemical, biological, radiological, and nuclear (CBRN) defense programs
National Institutes of Health (NIH) research grants
Advanced Manufacturing Enterprise (AME) initiatives

Risk Flags

Long contract duration may increase risk of cost overruns or obsolescence.
CPFF contract type requires diligent oversight to ensure cost efficiency.
Potential for scope creep over a 10-year period.
Dependence on contractor's sustained technical expertise and manufacturing capacity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $276.8 million to RESILIENCE GOVERNMENT SERVICES, INC.. MEDICAL COUNTERMEASURES ADVANCED DEVELOPMENT AND MANUFACTURING (MCM ADM) CAPABILITY

Who is the contractor on this award?

The obligated recipient is RESILIENCE GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $276.8 million.

What is the period of performance?

Start: 2013-03-20. End: 2023-03-20.

What is the track record of Resilience Government Services, Inc. in fulfilling large-scale defense contracts, particularly in advanced manufacturing and development?

Resilience Government Services, Inc. has been awarded this significant 10-year contract for Medical Countermeasures Advanced Development and Manufacturing (MCM ADM) Capability, indicating a level of trust and demonstrated capability by the Department of the Army. While specific details on past performance metrics for this exact contract are not provided in the summary data, the sustained award suggests a history of meeting contractual obligations. Further investigation into their project portfolio, client feedback, and any publicly available performance reviews would be necessary for a comprehensive assessment of their track record. The company's focus on government services and advanced manufacturing implies a specialization relevant to this contract's objectives.

How does the total contract value of approximately $277 million over 10 years compare to similar investments in medical countermeasures development and manufacturing by the federal government?

The $277 million investment over a decade for advanced development and manufacturing of medical countermeasures is substantial and reflects a strategic, long-term commitment by the Department of Defense. Federal investments in this area, particularly through agencies like BARDA (Biomedical Advanced Research and Development Authority) and DoD initiatives, often range in the hundreds of millions to billions of dollars, especially when encompassing development, manufacturing scale-up, and procurement. This particular contract's value appears consistent with the scale required for establishing and maintaining advanced manufacturing capabilities for specialized national security-related medical supplies, which are inherently costly due to R&D intensity, regulatory hurdles, and the need for specialized facilities.

What are the primary risks associated with a 10-year Cost Plus Fixed Fee (CPFF) contract for advanced development and manufacturing, and how are they mitigated?

A 10-year CPFF contract for advanced development and manufacturing carries inherent risks. For the government, the primary risk is cost escalation, as the CPFF structure allows the contractor to recover allowable costs plus a negotiated fixed fee, potentially leading to higher total costs than fixed-price contracts if not managed diligently. There's also a risk of scope creep or technological obsolescence over such a long period. Mitigation strategies typically involve robust government oversight, detailed cost auditing, clear performance metrics, regular contract reviews, and defined milestones. The fixed fee component provides the contractor with an incentive to control costs to maximize their profit margin. For the contractor, risks include underestimating costs or facing unforeseen technical challenges that could impact their ability to deliver within the negotiated fee.

What is the expected effectiveness of the MCM ADM Capability contract in enhancing national biodefense and pandemic preparedness?

The MCM ADM Capability contract is designed to directly enhance national biodefense and pandemic preparedness by ensuring the availability of advanced medical countermeasures. By investing in the development and manufacturing capacity, the contract aims to shorten the timeline from threat identification to the availability of effective treatments or preventatives. This capability is crucial for responding to novel infectious diseases, bioterrorism threats, and other public health emergencies. The contract's focus on 'advanced development and manufacturing' suggests it supports moving promising research into scalable production, a critical bottleneck in many public health responses. Its effectiveness hinges on the successful development of relevant countermeasures and the readiness of the manufacturing infrastructure.

How has federal spending on medical countermeasures development and manufacturing evolved over the past decade, and what trends does this contract reflect?

Federal spending on medical countermeasures (MCMs) development and manufacturing has significantly increased over the past decade, driven by heightened awareness of global health security threats, including pandemics and bioterrorism. This trend is reflected in the Department of Defense's substantial, long-term investment in the MCM ADM Capability. Historically, funding has come from various agencies like HHS (e.g., BARDA) and DoD. The increasing emphasis on domestic manufacturing capacity, supply chain resilience, and rapid response capabilities has led to larger, more strategic contracts like this one. This contract aligns with the trend of proactive investment in preparedness rather than solely reactive responses, acknowledging the long lead times and high costs associated with developing and producing advanced medical countermeasures.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › ECONOMIC GROWTH/PRODUCTIVITY R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911QY11R0023

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 13200 NW NANO CT, ALACHUA, FL, 32516

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

Financial Breakdown

Contract Ceiling: $366,290,602

Exercised Options: $282,290,978

Current Obligation: $276,824,216

Actual Outlays: $58,633

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline