HHS awards $774M R&D contract for critical care treatment, with a decade-long performance period

Contract Overview

Contract Amount: $773,879,007 ($773.9M)

Contractor: Amgen USA Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-30

End Date: 2032-09-29

Contract Duration: 3,652 days

Daily Burn Rate: $211.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: TREATMENT FOR USE IN A MASS CASUALTY EVENT WHERE THROMBOCYTOPENIA OR PLATELET LOSS IS A MAJOR CONCERN.

Place of Performance

Location: NEWBURY PARK, VENTURA County, CALIFORNIA, 91320

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $773.9 million to AMGEN USA INC for work described as: TREATMENT FOR USE IN A MASS CASUALTY EVENT WHERE THROMBOCYTOPENIA OR PLATELET LOSS IS A MAJOR CONCERN. Key points: 1. The contract's substantial value suggests a significant investment in a critical medical countermeasure. 2. The long performance period indicates a need for sustained development and potential future production. 3. The 'Research and Development in Biotechnology' classification points to innovation in a high-stakes sector. 4. The firm fixed-price contract structure aims to control costs for the government. 5. The contract's focus on mass casualty events highlights its role in national preparedness. 6. The single award suggests a specialized capability required for this specific treatment.

Value Assessment

Rating: good

The contract value of $773.9 million over 10 years represents a significant investment in a specialized medical countermeasure. Benchmarking this against similar R&D contracts for biodefense or advanced medical treatments is challenging due to the unique nature of the 'TREATMENT FOR USE IN A MASS CASUALTY EVENT WHERE THROMBOCYTOPENIA OR PLATELET LOSS IS A MAJOR CONCERN.' However, the firm fixed-price structure provides cost certainty for the government over the contract's life. The value appears commensurate with the long-term research and development required for such a critical capability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the competitive process is expected to have driven a fair market price for the research and development services. The agency's decision to pursue full and open competition suggests confidence in the availability of qualified sources for this specialized biotechnology R&D.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, ensuring the government receives optimal value for its investment in critical medical countermeasures.

Public Impact

The primary beneficiaries are the public, who will gain access to a potentially life-saving treatment during mass casualty events. The contract will deliver advanced research and development services in biotechnology, specifically for treating thrombocytopenia or platelet loss. The geographic impact is national, focusing on enhancing the Strategic National Stockpile and overall public health security. Workforce implications include specialized roles for scientists, researchers, and biotechnologists within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term R&D contracts carry inherent risks related to scientific feasibility and marketability.
Dependence on a single contractor for a critical countermeasure could pose supply chain risks.
The effectiveness of the treatment in real-world mass casualty scenarios will require rigorous testing and validation.

Positive Signals

The contract addresses a critical public health need for mass casualty preparedness.
The firm fixed-price structure provides cost control and predictability for the government.
Full and open competition suggests a robust selection process and potential for innovation.
The long performance period allows for sustained development and potential scaling of the treatment.

Sector Analysis

This contract falls within the Biotechnology Research and Development sector, a critical area for national security and public health. The market for biodefense countermeasures is specialized, driven by government funding and the need to address emerging threats. Spending in this sector is often characterized by long development cycles, high R&D costs, and significant regulatory hurdles. Comparable spending benchmarks are difficult to establish due to the unique nature of the specific medical countermeasure being developed.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the substantial value and specialized nature of biotechnology R&D, it is likely that large, experienced firms with extensive research capabilities are best positioned to compete. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage smaller, innovative firms in specific aspects of the research or manufacturing process.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms may include regular progress reports, milestone reviews, and adherence to federal acquisition regulations. Transparency is generally maintained through contract award announcements and public databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Biodefense Countermeasures
Strategic National Stockpile
Medical Countermeasure Development
Biotechnology Research
Public Health Emergency Preparedness

Risk Flags

Long-term R&D project risks
Potential for scientific or technical failure
Dependence on single source for critical countermeasure
Uncertainty of real-world effectiveness
Regulatory approval challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $773.9 million to AMGEN USA INC. TREATMENT FOR USE IN A MASS CASUALTY EVENT WHERE THROMBOCYTOPENIA OR PLATELET LOSS IS A MAJOR CONCERN.

Who is the contractor on this award?

The obligated recipient is AMGEN USA 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 $773.9 million.

What is the period of performance?

Start: 2022-09-30. End: 2032-09-29.

What is the specific nature of the 'TREATMENT FOR USE IN A MASS CASUALTY EVENT WHERE THROMBOCYTOPENIA OR PLATELET LOSS IS A MAJOR CONCERN' being developed?

The provided data describes the intended use of the treatment rather than its specific pharmacological or biological nature. It is designed to address conditions of low platelet count (thrombocytopenia) or significant platelet loss that may occur during mass casualty events. These events could include terrorist attacks, natural disasters, or pandemics. The development likely focuses on novel therapeutics, such as platelet-stimulating agents, transfusion alternatives, or agents that prevent platelet destruction. Further details on the specific drug or technology would typically be found in the contract's statement of work or associated technical documentation, which are not publicly available in this dataset.

How does the $774 million contract value compare to typical R&D spending for biodefense countermeasures?

The $774 million contract value over a decade is substantial and reflects the high costs associated with advanced biotechnology research and development, particularly for novel countermeasures against rare but high-impact threats. Biodefense R&D contracts can range widely, from tens of millions for early-stage research to hundreds of millions or even billions for late-stage development, clinical trials, and initial manufacturing scale-up. Given the critical nature of addressing mass casualty events and the long development timelines inherent in biotechnology, this investment appears to be within the expected range for a comprehensive, multi-year effort aimed at developing a critical medical countermeasure for the Strategic National Stockpile.

What are the primary risks associated with a 10-year R&D contract for a novel medical treatment?

The primary risks associated with a 10-year R&D contract for a novel medical treatment are multifaceted. Scientific risk is paramount: the research may not yield a viable product, or the efficacy and safety may not be proven through clinical trials. Technical risk involves the challenges of scaling up production from laboratory to industrial levels. Market risk, while less direct for a government-funded countermeasure, exists if the threat landscape shifts or if alternative treatments emerge. Furthermore, there's a risk of cost overruns, although the firm fixed-price structure aims to mitigate this. Finally, regulatory hurdles for FDA approval can cause significant delays and require substantial additional investment. The long duration also increases the risk of contractor performance issues or changes in government priorities.

What does the 'full and open competition' designation imply for the contractor selection and potential innovation?

The 'full and open competition' designation signifies that the Department of Health and Human Services (HHS) solicited proposals from all responsible sources and that no restrictions were placed on the type of business or organization that could submit an offer. This process is designed to maximize competition, leading to potentially lower prices, higher quality services, and greater innovation as contractors vie for the award. It implies that HHS assessed the market and determined that multiple capable entities existed to fulfill the requirement. The selection of a contractor through this method suggests that the chosen entity, AMGEN USA INC, offered the best value proposition based on the evaluation criteria set forth in the solicitation, potentially including technical merit, past performance, and price.

How does this contract contribute to the broader goals of national biodefense and public health preparedness?

This contract directly contributes to national biodefense and public health preparedness by investing in the development of a critical medical countermeasure. Thrombocytopenia or platelet loss can be a severe complication in various scenarios, including chemical or biological attacks, radiation exposure, or severe infections. By funding the R&D for a treatment specifically targeting this issue in mass casualty events, the government aims to enhance the Strategic National Stockpile (SNS) with advanced medical assets. This strengthens the nation's ability to respond effectively to catastrophic health emergencies, saving lives and mitigating the impact of such events on the population and healthcare infrastructure.

What is the significance of the 'Definitive Contract' award type in this context?

A Definitive Contract is a fixed-price or cost-reimbursement contract that is fully determined and contains all the terms and conditions agreed upon by the parties. In this case, it's a 'FIRM FIXED PRICE' definitive contract, meaning the price is set and not subject to adjustment based on the contractor's cost experience. For a long-term R&D project like this, a definitive contract provides significant cost certainty for the government. It signifies that the scope of work, deliverables, and pricing have been clearly defined and agreed upon, reducing the risk of future price disputes. This award type is suitable when the government has a clear understanding of the requirements and can establish a fair and reasonable price upfront.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75A50122R00021

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 AMGEN CENTER DR, THOUSAND OAKS, CA, 91320

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $916,697,807

Exercised Options: $773,879,007

Current Obligation: $773,879,007

Actual Outlays: $711,944,844

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline