HHS Awards Moderna $1.75 Billion for COVID-19 mRNA Vaccine Development and Manufacturing

Contract Overview

Contract Amount: $1,754,345,480 ($1.8B)

Contractor: Modernatx, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2020-04-03

End Date: 2025-06-15

Contract Duration: 1,899 days

Daily Burn Rate: $923.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: DEVELOPMENT OF MRNA VACCINE TO LICENSURE FOR THE PREVENTION OF COVID-19. CLIN 0001 - PRE-AWARD COST, CLIN 0002 - DEVELOPMENT OF MRNA VACCINE TO BLA AND CLIN 0003 - DOMESTIC MANUFACTURING SCALE-OUT

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02139

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.75 billion to MODERNATX, INC. for work described as: DEVELOPMENT OF MRNA VACCINE TO LICENSURE FOR THE PREVENTION OF COVID-19. CLIN 0001 - PRE-AWARD COST, CLIN 0002 - DEVELOPMENT OF MRNA VACCINE TO BLA AND CLIN 0003 - DOMESTIC MANUFACTURING SCALE-OUT Key points: 1. Significant investment in critical public health infrastructure. 2. Single awardee suggests potential for limited competition or unique capabilities. 3. Long-term contract duration indicates ongoing development and scaling needs. 4. Focus on domestic manufacturing addresses supply chain resilience.

Value Assessment

Rating: good

The total award of $1.75 billion is substantial, reflecting the complexity and scale of vaccine development and manufacturing. Benchmarking against similar large-scale biopharmaceutical development contracts is challenging due to the unique nature of pandemic response and novel technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple sources were considered. However, the single award to Moderna suggests they possessed the most advantageous proposal or unique capabilities for this specific requirement.

Taxpayer Impact: Taxpayer funds are being invested in a critical national health priority, aiming to secure a vital medical countermeasure against COVID-19.

Public Impact

Ensures domestic capacity for mRNA vaccine production, enhancing national security. Supports the development and scaling of a potentially life-saving vaccine. Contributes to economic activity within the biotechnology and pharmaceutical sectors. Addresses a critical public health need during a global pandemic.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in long-term development.
Reliance on a single manufacturer for a critical vaccine.
Uncertainty of vaccine efficacy and long-term market demand.

Positive Signals

Investment in cutting-edge mRNA technology.
Focus on domestic manufacturing strengthens supply chain.
Addresses a critical public health threat.

Sector Analysis

This contract falls within the Biotechnology and Pharmaceutical Manufacturing sector, specifically focusing on advanced biological product development. Spending in this area is often characterized by high R&D costs, long development cycles, and significant government investment, particularly during public health emergencies.

Small Business Impact

While the primary awardee is a large corporation, the contract may indirectly benefit small businesses through subcontracts for raw materials, manufacturing support, or specialized services. However, the direct award does not appear to prioritize small business participation.

Oversight & Accountability

The Department of Health and Human Services, through the Office of the Assistant Secretary for Preparedness and Response, is responsible for oversight. Contract performance will likely be monitored through regular reporting, milestone reviews, and financial audits to ensure progress and responsible use of funds.

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

High contract value.
Long contract duration.
Development of novel technology.
Reliance on a single source for critical supply.
Potential for cost overruns.
Uncertainty of market demand post-pandemic.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.75 billion to MODERNATX, INC.. DEVELOPMENT OF MRNA VACCINE TO LICENSURE FOR THE PREVENTION OF COVID-19. CLIN 0001 - PRE-AWARD COST, CLIN 0002 - DEVELOPMENT OF MRNA VACCINE TO BLA AND CLIN 0003 - DOMESTIC MANUFACTURING SCALE-OUT

Who is the contractor on this award?

The obligated recipient is MODERNATX, 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 $1.75 billion.

What is the period of performance?

Start: 2020-04-03. End: 2025-06-15.

What is the projected cost per vaccine dose, and how does it compare to other COVID-19 vaccines?

The provided data does not specify the cost per vaccine dose. The total contract value covers development, licensure, and manufacturing scale-out, encompassing significant R&D and infrastructure costs. A per-dose cost would likely be determined as manufacturing scales and production efficiencies are realized, and would need to be benchmarked against other mRNA vaccines and different vaccine platforms.

What are the specific risks associated with relying on a single manufacturer for a critical vaccine, and what mitigation strategies are in place?

The primary risk is supply chain disruption or manufacturing issues impacting national vaccine availability. Mitigation strategies could include government stockpiling, diversification of manufacturing capabilities through future contracts, and robust quality control measures. The contract's duration and scale suggest a strong commitment to ensuring Moderna's capacity.

How effective is the government's oversight in ensuring the efficient and timely development and manufacturing of the vaccine?

Effective oversight is crucial for managing a contract of this magnitude. The government's oversight mechanisms, including regular reporting, milestone tracking, and financial reviews, are designed to ensure progress and accountability. The success of these measures will be evident in the timely delivery of a safe and effective vaccine.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: 15100SOL00003

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 200 TECHNOLOGY SQ, CAMBRIDGE, MA, 02139

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

Financial Breakdown

Contract Ceiling: $1,754,345,480

Exercised Options: $1,754,345,480

Current Obligation: $1,754,345,480

Actual Outlays: $1,692,330,474

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline