HHS awarded $76.4M contract for research support, spanning 15 years

Contract Overview

Contract Amount: $76,392,117 ($76.4M)

Contractor: University of North Carolina a

Awarding Agency: Department of Health and Human Services

Start Date: 1999-09-15

End Date: 2014-08-20

Contract Duration: 5,453 days

Daily Burn Rate: $14.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Healthcare

Place of Performance

Location: CHAPEL HILL, ORANGE County, NORTH CAROLINA, 27599

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $76.4 million to UNIVERSITY OF NORTH CAROLINA A for work described as: Key points: 1. Contract value represents significant long-term investment in research infrastructure. 2. Long contract duration suggests a stable, ongoing need for services. 3. Single award indicates potential for deep contractor expertise but limits competitive pressure. 4. Performance period spans over a decade, requiring sustained quality. 5. The contract type (Cost No Fee) shifts risk to the government. 6. Geographic location in North Carolina may indicate regional research strengths.

Value Assessment

Rating: fair

The contract's total value of $76.4 million over 15 years averages approximately $5.1 million annually. Without specific service details or benchmarks for similar research support contracts, a precise value-for-money assessment is challenging. However, the Cost No Fee (Cost Plus Fixed Fee or Cost Plus Incentive Fee would be more common for performance-based contracts) contract type places the financial risk on the government, which can lead to higher overall costs if not managed carefully. The long duration suggests a stable relationship, but the lack of detailed performance metrics makes it difficult to benchmark against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the data indicates only two bids were received. While full and open competition is the preferred method, a low number of bids can sometimes indicate a specialized market or potential barriers to entry for other firms. This level of competition may not have driven the most aggressive pricing.

Taxpayer Impact: Taxpayers benefit from the potential for a qualified vendor to be selected through a competitive process. However, with only two bids, the price discovery might not have been as robust as with a larger pool of competitors, potentially leading to less cost savings.

Public Impact

The University of North Carolina is the primary beneficiary, receiving substantial funding for research operations. The contract supports critical research activities, likely contributing to advancements in health and science. The geographic impact is centered in North Carolina, potentially boosting the local research ecosystem and economy. Workforce implications include employment opportunities for researchers, administrative staff, and support personnel at the university.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost No Fee contract type increases government financial risk.
Low number of bids (2) in a full and open competition may limit price optimization.
Long contract duration (15 years) requires sustained government oversight to ensure continued value.
Lack of specific service details makes it difficult to assess performance and value comprehensively.

Positive Signals

Awarded under full and open competition, ensuring a broad initial opportunity for vendors.
Long-term contract provides stability for critical research support services.
The University of North Carolina is a well-established research institution, suggesting a capable contractor.
The contract spans a significant period, indicating a sustained and important need for the services.

Sector Analysis

This contract falls within the broader Health and Human Services sector, specifically supporting research and development activities. The market for research support services is substantial, encompassing a wide range of scientific disciplines and administrative functions. Comparable spending benchmarks would typically involve analyzing other large, long-term research grants and contracts awarded by agencies like NIH to academic institutions or research organizations. The $76.4 million over 15 years positions this as a significant, albeit potentially specialized, investment within the federal research landscape.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. As a large definitive contract awarded to a major university, it is unlikely that small businesses would be primary recipients, though they could potentially be involved as subcontractors. Further analysis would be needed to determine the extent of small business participation through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services, specifically the National Institutes of Health (NIH). Given the Cost No Fee structure and long duration, robust oversight mechanisms would be crucial. This would likely involve regular performance reviews, financial audits, and adherence to reporting requirements. Transparency would depend on the public availability of contract performance reports and any associated Inspector General reviews.

Related Government Programs

NIH Research Grants
University Research Support Contracts
Federal Health Research Funding
Cost-Reimbursement Contracts

Risk Flags

Cost-Plus contract type
Long contract duration
Low number of bids

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $76.4 million to UNIVERSITY OF NORTH CAROLINA A. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is UNIVERSITY OF NORTH CAROLINA A.

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 $76.4 million.

What is the period of performance?

Start: 1999-09-15. End: 2014-08-20.

What specific research areas or projects does this contract support?

The provided data does not specify the exact research areas or projects funded by this $76.4 million contract. As it was awarded by the National Institutes of Health (NIH) to the University of North Carolina, it is highly probable that the contract supports biomedical or health-related research. NIH funds a vast array of scientific endeavors, from basic science to clinical trials, across numerous institutes and centers. To determine the specific focus, one would need to consult the contract's statement of work (SOW) or related documentation, which would detail the objectives, deliverables, and scientific domains covered by the agreement. This information is typically available through federal procurement databases or agency public affairs offices upon request.

How does the annual average cost of $5.1 million compare to similar research support contracts?

Benchmarking the annual average cost of $5.1 million requires detailed comparison with similar contracts. Factors influencing cost include the scope of services (e.g., administrative support, laboratory management, data analysis, specialized equipment maintenance), the specific research disciplines involved, the size and reputation of the performing institution (University of North Carolina), and the prevailing market rates for such services. Contracts supporting large-scale, multi-disciplinary research centers or long-term clinical studies might command higher annual figures. Conversely, contracts focused on more administrative or narrowly defined technical support might be lower. Without access to the contract's detailed statement of work and a database of comparable NIH contracts, a precise benchmark is difficult. However, $5.1 million annually for comprehensive research support at a major university is plausible, though careful scrutiny of the services rendered versus the cost is warranted.

What are the primary risks associated with a 'Cost No Fee' contract structure over 15 years?

The primary risk associated with a 'Cost No Fee' (CNF) contract structure, especially over a 15-year period, is the significant financial exposure for the government. In a CNF agreement, the government reimburses the contractor for all allowable costs incurred, regardless of whether the project achieves its objectives or meets performance targets. This shifts the cost risk entirely to the government. Over a long duration, there's a heightened risk of cost overruns, inefficient practices, or scope creep, as the contractor has less direct financial incentive to control expenses. Effective oversight, stringent cost controls, and clear performance metrics are essential to mitigate these risks. Without them, the total expenditure could far exceed initial estimates or the value derived from the research support.

What does the low number of bids (2) in a 'Full and Open Competition' suggest about the market for these services?

A low number of bids, such as two, in a 'Full and Open Competition' can suggest several market dynamics. It might indicate that the required services are highly specialized, requiring unique expertise or infrastructure that only a limited number of entities possess. Alternatively, there could be significant barriers to entry, such as high startup costs, complex qualification requirements, or long lead times for preparation, which deterred potential bidders. It could also imply that the market is relatively small or that incumbent contractors have established strong relationships or competitive advantages. From a taxpayer perspective, fewer bidders may mean less competitive pressure on pricing and potentially a higher final contract cost than if a larger pool of vendors had competed.

How has federal spending on research support services evolved, and where does this contract fit?

Federal spending on research support services has generally trended upwards over the past few decades, driven by increasing investment in scientific discovery, technological innovation, and public health initiatives. Agencies like NIH consistently represent a significant portion of this spending. This $76.4 million contract, awarded in 1999 and spanning 15 years, reflects a substantial, long-term commitment to supporting research infrastructure at a major academic institution. It fits within the broader category of grants and contracts that enable federal agencies to leverage external expertise and facilities to achieve their research missions. While specific year-over-year spending trends for 'research support' can fluctuate based on appropriations and national priorities, such long-duration, high-value contracts are indicative of the government's strategy to ensure sustained capacity for critical research endeavors.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST NO FEE (S)

Contractor Details

Address: 440 W FRANKLIN ST, CHAPEL HILL

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

Financial Breakdown

Contract Ceiling: $211,260,080

Exercised Options: $211,263,461

Current Obligation: $76,392,117

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline