HHS awards $370M contract for clinical trial planning and execution to Allucent Government Services

Contract Overview

Contract Amount: $370,059,439 ($370.1M)

Contractor: Allucent Government Services (US) LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-08-22

End Date: 2025-04-11

Contract Duration: 598 days

Daily Burn Rate: $618.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CLINICAL SERVICES NETWORK- CLINICAL TRIAL PLANNING AND EXECUTION

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77060

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $370.1 million to ALLUCENT GOVERNMENT SERVICES (US) LLC for work described as: CLINICAL SERVICES NETWORK- CLINICAL TRIAL PLANNING AND EXECUTION Key points: 1. Contract aims to enhance clinical trial capabilities for public health emergencies. 2. Allucent Government Services, a US-based entity, secured this significant award. 3. The contract duration spans approximately 598 days, indicating a medium-term project. 4. This award falls under Research and Development in Biotechnology, a critical sector. 5. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 6. The award was made via a Delivery Order, suggesting it's part of a larger IDIQ.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparisons to similar clinical trial planning contracts. The Cost Plus Fixed Fee (CPFF) structure means that costs are reimbursed, plus a fixed fee, which can lead to less price certainty compared to fixed-price contracts. However, CPFF can be appropriate for R&D efforts where the scope is not fully defined. Further analysis would require understanding the specific deliverables and the complexity of the clinical trials involved.

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. This process is generally favorable for price discovery and ensuring a competitive market. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was sought.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by leveraging market forces to drive down costs and encourage innovation among bidders.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) and the public, through improved preparedness for health emergencies. The contract will deliver services related to the planning and execution of clinical trials. This supports the development of medical countermeasures and public health interventions. The geographic impact is national, focusing on enhancing US public health infrastructure. Workforce implications may include specialized roles in clinical research coordination and management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not closely monitored.
Limited transparency on the specific number of bidders in the full and open competition.
The duration of the contract (598 days) requires ongoing performance monitoring to ensure timely delivery.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Focus on critical public health needs, aligning with national priorities.
Contractor has experience in government services, potentially indicating a track record.

Sector Analysis

This contract operates within the Biotechnology Research and Development sector, specifically focusing on clinical trial planning and execution. This is a vital area for developing new treatments and responding to public health crises. The market for such services is competitive, with numerous firms offering specialized expertise. Benchmarking requires comparing this award to other government contracts for similar R&D and clinical trial management services, considering the scope and complexity.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. As a full and open competition award, it's possible that larger prime contractors were involved, and their subcontracting plans would determine small business participation. Further investigation into the contractor's subcontracting practices would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). The Cost Plus Fixed Fee structure necessitates robust financial oversight and auditing to ensure costs are reasonable and allocable. Transparency would be enhanced by public reporting on contract performance and expenditures, though specific details may be limited due to the nature of R&D contracts.

Related Government Programs

Biotechnology Research and Development Contracts
Clinical Trial Management Services
Public Health Emergency Preparedness Contracts
Medical Countermeasures Development

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Potential for cost overruns inherent in CPFF structures for R&D.
Need for detailed performance monitoring to ensure timely delivery of clinical trial services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $370.1 million to ALLUCENT GOVERNMENT SERVICES (US) LLC. CLINICAL SERVICES NETWORK- CLINICAL TRIAL PLANNING AND EXECUTION

Who is the contractor on this award?

The obligated recipient is ALLUCENT GOVERNMENT SERVICES (US) LLC.

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 $370.1 million.

What is the period of performance?

Start: 2023-08-22. End: 2025-04-11.

What is Allucent Government Services' track record with federal contracts, particularly in R&D and clinical trials?

Allucent Government Services, LLC, has a history of performing federal contracts. While specific details on their track record for R&D and clinical trials within the federal space require deeper database searches, their ability to win a $370 million contract from HHS suggests they possess the necessary qualifications and experience. Further analysis would involve examining past performance evaluations, any past performance issues, and the types of services they have previously provided to government agencies. Understanding their success rate on similar contract types (e.g., CPFF) and their performance in critical areas like clinical trial planning and execution would provide a clearer picture of their capabilities and reliability.

How does the $370 million award compare to similar contracts for clinical trial planning and execution?

Comparing this $370 million award requires identifying comparable contracts within the federal government for clinical trial planning and execution, particularly those focused on public health emergencies or specific therapeutic areas. The value of this contract suggests a significant scope of work, likely involving multiple complex clinical trials or a large-scale program. Without access to a comprehensive database of all such federal contracts, a precise benchmark is difficult. However, awards of this magnitude typically indicate a substantial need and a multi-year effort. It's important to consider the specific deliverables, the phase of research, and the therapeutic area when making comparisons to ensure relevance.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D in biotechnology?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D in biotechnology revolve around cost control and contractor incentive. In a CPFF arrangement, the government reimburses the contractor for allowable costs plus a fixed fee representing profit. This can lead to a risk of cost overruns if the contractor does not diligently manage expenses, as their profit is fixed regardless of the final cost. For R&D, where the scope and technical challenges can be uncertain, this structure might incentivize less cost-consciousness compared to fixed-price contracts. Effective oversight, detailed cost monitoring, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

How effective is the 'full and open competition' process in ensuring value for money for this type of R&D contract?

The 'full and open competition' process is generally considered the most effective method for ensuring value for money in federal contracting, including for R&D. By allowing all responsible sources to submit bids, it fosters a competitive environment that encourages innovation and drives down prices. For a complex R&D contract like this one, it allows a wider pool of specialized companies to propose solutions, potentially leading to more efficient and effective approaches. The government can then select the offer that provides the best overall value, considering technical merit, past performance, and price. However, the effectiveness is contingent on the clarity of the solicitation and the rigor of the evaluation process.

What are the historical spending patterns for clinical trial planning and execution by HHS or similar agencies?

Historical spending patterns for clinical trial planning and execution by HHS and related agencies like the National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority (BARDA) show significant investment, particularly in areas related to public health emergencies and the development of medical countermeasures. Spending in this domain can fluctuate based on emerging threats and national priorities. For instance, during the COVID-19 pandemic, there was a substantial increase in funding for vaccine and therapeutic development, which includes extensive clinical trial activities. Analyzing past budgets and contract awards can reveal trends in the types of research funded, the average contract values, and the duration of such engagements, providing context for the current $370 million award.

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 450 N SAM HOUSTON PKWY E STE 250, HOUSTON, TX, 77060

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

Financial Breakdown

Contract Ceiling: $370,059,439

Exercised Options: $370,059,439

Current Obligation: $370,059,439

Actual Outlays: $5,025,565

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75A50120D00016

IDV Type: IDC

Timeline