HHS awards $75M contract for burn injury optical imaging and AI to Spectral MD, Inc

Contract Overview

Contract Amount: $74,984,180 ($75.0M)

Contractor: Spectral MD, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2019-07-01

End Date: 2023-09-30

Contract Duration: 1,552 days

Daily Burn Rate: $48.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PORTABLE WOUND HEALING POTENTIAL IN MASS CASUALTY AND CONVENTIONAL BURN INJURIES OPTICAL IMAGING DEVICE AND MACHINE LEARNING ALGORITHM TO CLASSIFY BURN

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75201

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $75.0 million to SPECTRAL MD, INC. for work described as: PORTABLE WOUND HEALING POTENTIAL IN MASS CASUALTY AND CONVENTIONAL BURN INJURIES OPTICAL IMAGING DEVICE AND MACHINE LEARNING ALGORITHM TO CLASSIFY BURN Key points: 1. Contract awarded for advanced burn injury assessment technology. 2. Focus on optical imaging and machine learning for classification. 3. Aims to improve treatment in mass casualty and conventional burn scenarios. 4. Contract duration spans over four years. 5. Research and Development sector focus. 6. Awarded under full and open competition. 7. Potential for significant impact on emergency medical response.

Value Assessment

Rating: good

The contract value of $75 million over approximately four years suggests a substantial investment in developing novel medical technology. Benchmarking this against similar R&D contracts in advanced medical imaging and AI requires detailed analysis of specific technological maturity and scope. However, the award to a single entity for this developmental phase indicates a focused approach. The Cost Plus Fixed Fee (CPFF) pricing structure allows for flexibility during research while providing a defined profit margin for the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the open competition suggests a market capable of supporting this type of advanced R&D. This process is generally expected to yield competitive pricing and innovative solutions by allowing the government to select the most advantageous offer.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best value and encourages a wider range of technological advancements to be considered.

Public Impact

Benefits military personnel and civilian populations requiring advanced burn care. Delivers a novel optical imaging device and machine learning algorithm. Potential geographic impact across the United States in emergency response scenarios. Workforce implications include specialized roles in R&D, medical technology, and data science.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if research scope expands significantly.
Dependence on a single contractor for critical technology development.
Need for robust government oversight to ensure milestones are met and technology is effective.

Positive Signals

Addresses a critical need for improved burn injury assessment.
Leverages advanced technologies like AI and optical imaging.
Potential for significant improvements in patient outcomes and treatment efficiency.
Awarded through a competitive process, suggesting a strong initial proposal.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced medical technologies. The market for medical imaging and AI in healthcare is rapidly growing, driven by demand for more accurate diagnostics and personalized treatments. Comparable spending benchmarks would involve looking at other government investments in similar high-tech medical R&D initiatives, particularly those aimed at defense or public health preparedness.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests the primary focus was on securing specialized expertise for advanced R&D, potentially from larger, established firms or those with unique technological capabilities. Further analysis would be needed to determine if small businesses are involved in the supply chain or as potential future partners.

Oversight & Accountability

Oversight for this contract would likely reside within the Department of Health and Human Services, specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures would be tied to contract milestones, deliverables, and the successful development and validation of the optical imaging device and algorithm. Transparency is typically managed through contract reporting requirements and public contract databases, though specific project details may be sensitive.

Related Government Programs

Biomedical Advanced Research and Development Authority (BARDA) initiatives
Department of Defense medical research programs
National Institutes of Health (NIH) research grants
Advanced medical technology development contracts

Risk Flags

Technology development risk
Cost overrun potential
Market adoption uncertainty
Data privacy and security (if applicable to algorithm training)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $75.0 million to SPECTRAL MD, INC.. PORTABLE WOUND HEALING POTENTIAL IN MASS CASUALTY AND CONVENTIONAL BURN INJURIES OPTICAL IMAGING DEVICE AND MACHINE LEARNING ALGORITHM TO CLASSIFY BURN

Who is the contractor on this award?

The obligated recipient is SPECTRAL MD, 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 $75.0 million.

What is the period of performance?

Start: 2019-07-01. End: 2023-09-30.

What is the specific technological advancement Spectral MD, Inc. is developing under this contract?

Spectral MD, Inc. is developing an optical imaging device coupled with a machine learning algorithm designed to accurately classify the depth and severity of burn injuries. This technology aims to provide objective, real-time data to clinicians, moving beyond subjective visual assessment. The goal is to enable more precise and timely treatment decisions, particularly in high-pressure environments like mass casualty incidents or battlefield medicine. The system is intended to differentiate between superficial and deep tissue damage, guiding appropriate interventions and potentially reducing complications and recovery times.

How does the $75 million contract value compare to similar R&D investments in advanced medical imaging and AI?

A direct comparison of the $75 million contract value to similar R&D investments requires a detailed analysis of the specific technological maturity, scope of work, and duration of comparable contracts. However, this funding level is substantial and indicative of a significant commitment to developing a novel, potentially disruptive technology. Investments in advanced medical AI and imaging often range from tens to hundreds of millions of dollars, depending on the phase of development (from basic research to clinical trials and market readiness). This award suggests the government views this technology as having high potential impact and requires significant development effort.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risks associated with a CPFF contract, like this one, revolve around cost control and scope creep. While the fixed fee provides a guaranteed profit for the contractor, the 'cost plus' element means the government bears the risk of actual costs incurred. If the research and development prove more complex or require more resources than initially anticipated, the total cost to the government could exceed initial projections. Effective oversight is crucial to monitor expenditures, ensure efficient resource utilization, and manage any necessary adjustments to the scope of work to prevent uncontrolled cost escalation.

What is the expected impact of this technology on patient outcomes in burn care?

The expected impact of this technology on patient outcomes is significant. By providing objective, data-driven classification of burn severity, clinicians can make more informed treatment decisions, potentially leading to faster and more appropriate interventions. This could reduce the risk of complications, minimize scarring, and improve overall healing times. In mass casualty situations, the ability to rapidly and accurately triage burn victims based on injury depth could optimize resource allocation and improve survival rates. The technology aims to standardize burn assessment, reducing variability in care.

What is the historical spending pattern for similar R&D in burn treatment or medical imaging by HHS?

Historical spending patterns by HHS on R&D for burn treatment and advanced medical imaging reveal a consistent, albeit varied, investment. Agencies like the Biomedical Advanced Research and Development Authority (BARDA) within HHS frequently fund projects aimed at improving medical countermeasures and emergency response capabilities, including trauma and burn care. Investments in medical imaging and AI technologies have also been a growing area of focus across various HHS components, recognizing their potential to revolutionize diagnostics and treatment. While specific figures for 'burn imaging AI' are not readily available without deep database dives, the overall trend shows a strategic prioritization of technologies that enhance public health preparedness and medical innovation.

How will the success of this contract be measured?

The success of this contract will be measured through a series of defined milestones and deliverables outlined in the contract. Key performance indicators will likely include the successful development and validation of the optical imaging device, the accuracy and reliability of the machine learning algorithm in classifying burn injuries, and the system's performance under simulated or actual field conditions. Adherence to budget, timely completion of research phases, and the ultimate demonstration of the technology's efficacy and potential for clinical adoption will be critical metrics. Government acceptance of final deliverables and potential transition to further development or procurement phases will signify success.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: BAA18100SOL00003

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spectral MD Inc.

Address: 2515 MCKINNEY AVE STE 1000, DALLAS, TX, 75201

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

Financial Breakdown

Contract Ceiling: $74,984,180

Exercised Options: $74,984,180

Current Obligation: $74,984,180

Actual Outlays: $43,346,261

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline