HHS awards $805M for ACAM2000 Smallpox Vaccine to Emergent Product Development
Contract Overview
Contract Amount: $804,857,151 ($804.9M)
Contractor: Emergent Product Development Gaithersburg Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2019-08-30
End Date: 2029-08-29
Contract Duration: 3,652 days
Daily Burn Rate: $220.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: ACAM2000, SMALLPOX (VACCINIA) VACCINE, LIVE (ACAM)
Place of Performance
Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $804.9 million to EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC. for work described as: ACAM2000, SMALLPOX (VACCINIA) VACCINE, LIVE (ACAM) Key points: 1. The contract supports the production and supply of a critical vaccine for national biodefense. 2. Emergent Product Development is the sole manufacturer of ACAM2000, limiting competition. 3. The long-term nature of the contract (10 years) presents potential risks of price escalation and technological obsolescence. 4. Spending in the Biological Product Manufacturing sector can be highly variable due to R&D costs and market demand.
Value Assessment
Rating: fair
The contract value of $805M over 10 years averages $80.5M annually. Benchmarking is difficult due to the specialized nature of smallpox vaccines and Emergent's sole manufacturing status.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under full and open competition, but Emergent is the sole source for ACAM2000. This limits price discovery and negotiation leverage.
Taxpayer Impact: Taxpayers are funding a critical national security asset, but the lack of competition may lead to higher costs than if alternatives existed.
Public Impact
Ensures availability of a vaccine against smallpox, a potential bioterrorism threat. Supports domestic manufacturing capabilities for essential medical countermeasures. Long-term commitment provides supply chain stability for a critical public health need.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole source dependency
- Long-term price risk
- Technological obsolescence risk
Positive Signals
- Critical national security asset
- Domestic manufacturing support
- Guaranteed supply chain
Sector Analysis
This contract falls within the Biological Product (except Diagnostic) Manufacturing sector, which is characterized by high R&D investment, stringent regulatory requirements, and significant government funding for biodefense and public health preparedness.
Small Business Impact
The contract was awarded to Emergent Product Development, a large business. There is no indication of subcontracting opportunities for small businesses within this specific award.
Oversight & Accountability
The Department of Health and Human Services, specifically the Office of the Assistant Secretary for Preparedness and Response, is responsible for this contract. Oversight will focus on delivery schedules, quality control, and adherence to contract terms.
Related Government Programs
- Biological Product (except Diagnostic) Manufacturing
- Department of Health and Human Services Contracting
- Office of Assistant Secretary for Preparedness and Response Programs
Risk Flags
- Sole source dependency
- Long-term contract duration
- Potential for price escalation
- Risk of technological obsolescence
- Limited competition impacting price discovery
Tags
biological-product-except-diagnostic-man, department-of-health-and-human-services, md, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $804.9 million to EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC.. ACAM2000, SMALLPOX (VACCINIA) VACCINE, LIVE (ACAM)
Who is the contractor on this award?
The obligated recipient is EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG 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 $804.9 million.
What is the period of performance?
Start: 2019-08-30. End: 2029-08-29.
What is the cost-effectiveness of this long-term sole-source contract compared to potential alternative strategies for ensuring smallpox vaccine availability?
Assessing cost-effectiveness is challenging due to Emergent's sole manufacturing status for ACAM2000. Alternative strategies might include investing in R&D for competing vaccines, stockpiling existing supplies, or international partnerships. However, the current contract provides a guaranteed domestic supply, which is a significant strategic advantage, albeit potentially at a premium.
What are the specific risks associated with relying on a single manufacturer for a decade, and what mitigation strategies are in place?
Risks include potential manufacturing disruptions, price increases due to lack of competition, and the possibility of the vaccine becoming outdated if newer technologies emerge. Mitigation strategies likely involve stringent performance monitoring, regular price reviews, and contingency planning for supply chain failures. The government may also explore options to encourage development of alternative vaccines.
How does this contract contribute to the broader goal of national biodefense preparedness beyond just smallpox vaccine availability?
This contract directly supports national biodefense by ensuring a critical medical countermeasure is available. It also bolsters domestic manufacturing capacity for biological products, which is a key component of pandemic and bioterrorism preparedness. Maintaining this capability strengthens the nation's ability to respond to a wide range of biological threats.
Industry Classification
NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 2018N67925
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Emergent Biosolutions Inc.
Address: 300 PROFESSIONAL DR, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $804,857,151
Exercised Options: $804,857,151
Current Obligation: $804,857,151
Actual Outlays: $457,855,091
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-08-30
Current End Date: 2029-08-29
Potential End Date: 2029-08-29 00:00:00
Last Modified: 2025-09-05
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