HHS Awards $143.7M for Pharmaceutical Consumables to Flexbiosys Inc. Amidst Long-Term Demand

Contract Overview

Contract Amount: $14,372,753 ($14.4M)

Contractor: Flexbiosys Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-30

End Date: 2035-08-31

Contract Duration: 5,083 days

Daily Burn Rate: $2.8K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PHARMACEUTICAL CONSUMABLES EXPANSION AND ACCELERATION: SINGLE USE BAGS, ASSEMBLIES, AND TUBING

Place of Performance

Location: LEBANON, HUNTERDON County, NEW JERSEY, 08833

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.4 million to FLEXBIOSYS INC for work described as: PHARMACEUTICAL CONSUMABLES EXPANSION AND ACCELERATION: SINGLE USE BAGS, ASSEMBLIES, AND TUBING Key points: 1. The contract focuses on single-use bags, assemblies, and tubing, critical for pharmaceutical manufacturing. 2. Flexbiosys Inc. secured this award, indicating potential market concentration or specialized capabilities. 3. The long duration (ending 2035) suggests sustained demand or strategic stockpiling needs. 4. The contract's value of $143.7M over its term warrants scrutiny for cost-effectiveness and necessity.

Value Assessment

Rating: fair

The total award value is $143.7M over approximately 14 years. Without specific unit pricing or volume data, a direct per-unit cost comparison is difficult. However, the extended duration suggests a significant, ongoing need for these consumables.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), suggesting it was intended for smaller value procurements. The fact that it was competed indicates some level of market outreach, but the long-term nature and significant value might warrant a more robust competition strategy.

Taxpayer Impact: The long-term commitment of $143.7M represents a substantial taxpayer investment. Ensuring competitive pricing throughout the contract's life and verifying the necessity of such a long duration are key to maximizing taxpayer value.

Public Impact

Ensures a steady supply of critical pharmaceutical consumables for potential future health emergencies or ongoing operations. Supports domestic manufacturing capabilities within the pharmaceutical supply chain. The long contract term could lock in prices, potentially benefiting the government if prices rise, but also risking overpayment if prices fall.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration may not reflect evolving market needs or technological advancements.
Potential for price increases over the contract's extended term.
Limited visibility into specific unit costs and volumes awarded.

Positive Signals

Ensures supply chain resilience for critical pharmaceutical components.
Awarded through a competed process, suggesting some level of market engagement.
Supports domestic industry and preparedness.

Sector Analysis

This contract falls within the Plastics Material and Resin Manufacturing sector, specifically serving the pharmaceutical industry's need for single-use components. Spending in this area is often driven by healthcare demand, regulatory requirements, and public health preparedness initiatives.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. Given the contract's value and the nature of the products, it is possible that larger manufacturers or specialized suppliers were the primary bidders.

Oversight & Accountability

The contract was awarded by the Department of Health and Human Services, Office of Assistant Secretary for Preparedness and Response, suggesting a focus on public health and emergency preparedness. Oversight would likely involve monitoring delivery schedules, quality control, and adherence to contract terms.

Related Government Programs

Plastics Material and Resin Manufacturing
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Long contract duration (14 years)
Potential for price escalation over time
Limited visibility into unit costs and volumes
Unusual use of SAP for a large, long-term contract

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.4 million to FLEXBIOSYS INC. PHARMACEUTICAL CONSUMABLES EXPANSION AND ACCELERATION: SINGLE USE BAGS, ASSEMBLIES, AND TUBING

Who is the contractor on this award?

The obligated recipient is FLEXBIOSYS 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 $14.4 million.

What is the period of performance?

Start: 2021-09-30. End: 2035-08-31.

What is the projected annual spending under this contract, and how does it compare to historical spending for similar consumables?

The total award is $143.7M over approximately 14 years (from 2021 to 2035). This averages to roughly $10.26M per year. Without historical data for these specific consumables or comparable contracts, it's difficult to definitively benchmark this spending. However, this annual figure should be compared against industry benchmarks and previous procurement data to assess its reasonableness and identify potential cost savings.

What specific risks are associated with a single-source supplier for critical pharmaceutical consumables over such a long period?

A long-term single-source arrangement, even if initially competed, can lead to reduced negotiating leverage over time, potentially resulting in higher prices than market rates. It also increases vulnerability to supply chain disruptions if the sole supplier faces production issues, quality control failures, or financial instability. Furthermore, it may stifle innovation if alternative, potentially superior, products emerge.

How does the 'competed under SAP' designation align with the significant long-term value of this contract?

Simplified Acquisition Procedures (SAP) are typically used for purchases below certain thresholds (e.g., $250,000). Awarding a $143.7M contract over 14 years under SAP is unusual and potentially indicates that the contract was structured in phases or that the initial award was under SAP with subsequent modifications or extensions. This warrants further investigation to ensure proper procurement procedures were followed for the full value and duration.

Industry Classification

NAICS: Manufacturing › Resin, Synthetic Rubber, and Artificial and Synthetic Fibers and Filaments Manufacturing › Plastics Material and Resin Manufacturing

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75A50121R00043

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 291 US HIGHWAY 22 STE 32, LEBANON, NJ, 08833

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $14,372,753

Exercised Options: $14,372,753

Current Obligation: $14,372,753

Actual Outlays: $14,372,753

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline