Charles River Laboratories awarded $142M contract for government-owned, contractor-operated R&D facilities

Contract Overview

Contract Amount: $14,199,239 ($14.2M)

Contractor: Charles River Laboratories, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2001-09-14

End Date: 2014-02-06

Contract Duration: 4,528 days

Daily Burn Rate: $3.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: OPER OF GOVT R&D GOCO FACILITIES

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.2 million to CHARLES RIVER LABORATORIES, INC. for work described as: OPER OF GOVT R&D GOCO FACILITIES Key points: 1. Contract value represents significant investment in outsourced research infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for specialized services. 3. Contract duration indicates a long-term commitment to the service provider. 4. Performance-based elements likely tied to research outcomes and facility management efficiency. 5. Sector positioning highlights the critical role of private contractors in supporting federal R&D.

Value Assessment

Rating: good

The contract value of $142 million over its period of performance suggests a substantial investment. Benchmarking this against similar contracts for operating government-owned research facilities is challenging without more specific service details. However, the Cost Plus Award Fee (CPA F) structure implies that the contractor's fee is tied to performance, which can incentivize efficiency and effectiveness. The pricing structure, while not directly comparable without market data, aims to balance cost control with achieving specific research and operational goals.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. This approach is generally favored for ensuring fair pricing and access to the best available services. The presence of two bidders suggests a degree of competition, though the specific number of proposals received and the evaluation process would provide a clearer picture of the competitive intensity and its impact on price discovery.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and a wider range of innovative solutions.

Public Impact

The primary beneficiaries are federal research agencies, such as NIH, which rely on these facilities to conduct critical scientific studies. The contract supports the operation and maintenance of specialized research laboratories, ensuring continuity of government R&D programs. Geographic impact is localized to the facility's location in Maryland, providing essential infrastructure for scientific advancement. Workforce implications include employment opportunities for scientists, technicians, and support staff at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance targets are not well-defined or managed.
Dependence on a single contractor for critical R&D infrastructure could pose a risk if performance degrades or the contractor faces financial instability.

Positive Signals

Awarding under full and open competition suggests a robust selection process, likely identifying a capable and competitive provider.
The long contract duration (4528 days) indicates a stable, long-term relationship, suggesting satisfactory performance and reliability.
The Cost Plus Award Fee structure, if managed effectively, can align contractor incentives with government objectives, promoting high performance.

Sector Analysis

This contract falls within the broader sector of scientific research and development services, specifically focusing on the operation of government-owned, contractor-operated (GOCO) facilities. This model is common in sectors requiring highly specialized infrastructure and expertise, such as life sciences and advanced materials. Comparable spending benchmarks would involve analyzing other GOCO facility management contracts across various federal agencies, which often represent significant, long-term investments in research capabilities.

Small Business Impact

There is no explicit indication of small business set-asides for this contract. However, the prime contractor, Charles River Laboratories, Inc., may engage small businesses as subcontractors for specialized services or supplies. The impact on the small business ecosystem would depend on the extent of subcontracting opportunities created by this large prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of Health and Human Services, specifically NIH) through contract officers and technical representatives. Accountability measures are embedded in the Cost Plus Award Fee structure, linking contractor compensation to performance. Transparency is generally maintained through contract databases and reporting requirements, though specific operational details may be proprietary. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

NIH Research Services
Government-Owned Contractor-Operated Facilities
Biomedical Research Support
Laboratory Operations and Management

Risk Flags

Long contract duration increases risk of performance degradation or evolving needs.
Cost Plus Award Fee structure requires diligent oversight to ensure value for money.
Dependence on a single contractor for critical infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.2 million to CHARLES RIVER LABORATORIES, INC.. OPER OF GOVT R&D GOCO FACILITIES

Who is the contractor on this award?

The obligated recipient is CHARLES RIVER LABORATORIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2001-09-14. End: 2014-02-06.

What is the historical spending pattern for Charles River Laboratories, Inc. with the federal government, particularly for similar R&D facility operations?

Charles River Laboratories, Inc. has a significant history of federal contracting, primarily within the Department of Health and Human Services and the Department of Defense. Their awards often relate to preclinical services, drug development support, and the operation of research facilities. Analyzing their historical spending patterns reveals a consistent reliance on their expertise for specialized biological and research services. For GOCO facilities specifically, their track record suggests a capacity for managing complex, long-term government research infrastructure, often involving substantial contract values over extended periods. This particular $142 million contract aligns with their established profile as a key provider of outsourced R&D support services to federal agencies.

How does the Cost Plus Award Fee (CPA F) structure in this contract compare to other federal R&D facility contracts?

The Cost Plus Award Fee (CPA F) structure is a common contracting method for complex services where performance outcomes are difficult to define precisely upfront or are subject to change, such as in research and development. In this type of contract, the contractor is reimbursed for allowable costs plus a fee that is composed of a fixed base fee and an award amount that is earned based on meeting or exceeding performance objectives. Compared to other federal R&D facility contracts, CPA F offers flexibility but requires robust performance metrics and oversight to ensure value for money. Other contracts might use Firm-Fixed-Price (FFP) for more defined scopes or Cost Plus Incentive Fee (CPIF) to share risks and rewards more directly. The choice of CPA F here suggests NIH prioritized incentivizing specific performance targets within a flexible cost reimbursement framework for operating these specialized facilities.

What are the key performance indicators (KPIs) likely used to determine the award fee for this contract?

For a contract involving the operation of government-owned, contractor-operated (GOCO) R&D facilities, key performance indicators (KPIs) for determining the award fee would likely focus on several critical areas. These could include the successful and timely execution of research protocols and experiments, adherence to stringent safety and environmental regulations, efficient facility maintenance and uptime, effective management of laboratory resources (equipment, supplies), and the quality and reproducibility of research data generated. Additionally, KPIs might encompass cost control measures, personnel qualifications and retention, and compliance with reporting requirements. The specific KPIs would be detailed in the contract's Performance Work Statement (PWS) and serve as the basis for evaluating the contractor's performance against established targets to justify the award fee.

What is the potential impact of this contract on the broader biomedical research ecosystem in Maryland?

This $142 million contract for operating R&D facilities has a significant positive impact on the biomedical research ecosystem in Maryland. Firstly, it ensures the continued operation and advancement of critical federal research capabilities, supporting NIH's mission. Secondly, it generates substantial economic activity through direct employment at the facility, requiring skilled personnel such as scientists, technicians, veterinarians, and administrative staff. Thirdly, it stimulates indirect economic benefits through local procurement of goods and services, supporting a network of suppliers and service providers. Furthermore, the presence of such a large-scale GOCO facility can foster collaboration and knowledge sharing within the region's vibrant life sciences cluster, potentially attracting further investment and talent to Maryland.

Given the long duration (over 12 years), what are the primary risks associated with contract performance and management?

The extended duration of this contract (4528 days, approximately 12.4 years) presents several primary risks. One significant risk is 'scope creep' or evolving research needs that may not be adequately captured in the initial contract, potentially leading to cost increases or disputes if not managed through formal modification processes. Another risk is contractor complacency or a decline in performance over time, necessitating vigilant oversight and performance monitoring. Technological obsolescence in research equipment or methodologies could also become a factor, requiring proactive planning for upgrades or replacements. Furthermore, long-term reliance on a single contractor can reduce flexibility and bargaining power for future procurements. Ensuring consistent quality, maintaining up-to-date safety protocols, and managing personnel turnover effectively over such a long period are also critical challenges.

Industry Classification

NAICS: Agriculture, Forestry, Fishing and Hunting › Other Animal Production › All Other Animal Production

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Charles River Laboratories International, Inc. (UEI: 110376014)

Address: 251 BALLARDVALE ST, WILMINGTON, MA, 06

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

Financial Breakdown

Contract Ceiling: $655,336,614

Exercised Options: $398,240,036

Current Obligation: $14,199,239

Timeline