HHS awards $795M for R&D in Biotechnology, focusing on advanced technologies

Contract Overview

Contract Amount: $795,000,000 ($795.0M)

Contractor: Advanced Technology International

Awarding Agency: Department of Health and Human Services

Start Date: 2023-09-28

End Date: 2029-12-31

Contract Duration: 2,286 days

Daily Burn Rate: $347.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: OTA TASK ORDER 1

Place of Performance

Location: SUMMERVILLE, BERKELEY County, SOUTH CAROLINA, 29486

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $795.0 million to ADVANCED TECHNOLOGY INTERNATIONAL for work described as: OTA TASK ORDER 1 Key points: 1. Contract value represents a significant investment in biotechnology research and development. 2. Full and open competition suggests a robust market for these specialized services. 3. The contract duration of over 6 years indicates a long-term strategic need. 4. Performance is benchmarked against similar R&D contracts within the federal sector. 5. The award falls within the Research and Development in Biotechnology NAICS code. 6. The fixed-price contract type aims to control costs and manage financial risk.

Value Assessment

Rating: good

The $795 million award over approximately six years for biotechnology R&D appears reasonable given the scope and duration. Benchmarking against similar large-scale, long-term research contracts within HHS and other agencies suggests that the overall investment aligns with federal priorities in advanced scientific endeavors. The firm fixed-price structure provides cost certainty for the government, although it may limit flexibility if research directions need to pivot significantly. Detailed cost breakdowns and justification for the total amount would provide further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, driving innovation and potentially leading to more favorable pricing for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to meet the complex requirements for biotechnology research.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of solutions and can lead to better pricing through market forces. This approach helps ensure that government funds are used efficiently by selecting the most capable and cost-effective provider.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) and potentially the broader public through advancements in biotechnology. The contract will deliver critical research and development services in the field of biotechnology, excluding nanobiotechnology. The geographic impact is primarily national, supporting federal research objectives, with specific locations of performance not detailed. Workforce implications include potential job creation for scientists, researchers, and support staff within the contractor's organization and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term R&D projects if not managed tightly.
Reliance on a single awardee for a significant R&D effort could concentrate risk.
Ensuring continued innovation and adaptability over the contract's multi-year duration.

Positive Signals

Firm fixed-price contract provides cost predictability.
Full and open competition suggests a strong market offering.
Long contract duration allows for sustained focus on complex R&D goals.

Sector Analysis

The biotechnology R&D sector is a critical area for federal investment, driven by the need for medical advancements, public health solutions, and economic growth. This contract fits within the broader landscape of federal spending on scientific research, which includes agencies like NIH, NSF, and DOD. The NAICS code 541714 specifically targets research and development in biotechnology, a field characterized by high innovation, significant intellectual property, and long development cycles. Comparable spending benchmarks would involve analyzing other large R&D contracts awarded by HHS and related agencies for similar scientific pursuits.

Small Business Impact

The data indicates that small business participation (ss and sb flags are false) was not a primary set-aside consideration for this specific award. While this contract was awarded under full and open competition, it does not preclude the prime contractor from utilizing small businesses for subcontracting opportunities. The agency's approach to ensuring small business inclusion in the subcontracting plan will be crucial for assessing the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures will be embedded in the contract's performance work statement, requiring regular reporting and adherence to milestones. Transparency is facilitated through contract award databases, though detailed project-specific outcomes may be subject to proprietary or national security considerations. The Inspector General's office for HHS would have jurisdiction over any potential fraud, waste, or abuse related to this funding.

Related Government Programs

Biotechnology Research and Development
Advanced Technology Development
Public Health Preparedness Initiatives
Medical Research Grants
National Institutes of Health (NIH) Contracts

Risk Flags

Long-term R&D contract risk
Firm-fixed-price cost uncertainty
Potential for technological obsolescence
Contractor performance over extended duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $795.0 million to ADVANCED TECHNOLOGY INTERNATIONAL. OTA TASK ORDER 1

Who is the contractor on this award?

The obligated recipient is ADVANCED TECHNOLOGY INTERNATIONAL.

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 $795.0 million.

What is the period of performance?

Start: 2023-09-28. End: 2029-12-31.

What is the track record of Advanced Technology International (ATI) in managing large-scale federal R&D contracts, particularly in biotechnology?

Advanced Technology International (ATI) has a history of managing Other Transaction Authority (OTA) agreements and other contract vehicles for various federal agencies, including the Department of Defense and Department of Homeland Security. While specific details on their track record with large-scale biotechnology R&D contracts under firm-fixed-price awards are not immediately available from the provided data, their experience often lies in facilitating research collaborations and managing complex projects. Further investigation into their past performance reports, client feedback, and the scale of previously managed R&D portfolios would be necessary to fully assess their capabilities and suitability for this specific $795 million award. Their role as a consortium manager or prime contractor on similar initiatives would provide valuable context for evaluating their ability to deliver on this significant HHS contract.

How does the $795 million value compare to other federal investments in biotechnology R&D over the past five years?

The $795 million award represents a substantial federal investment in biotechnology R&D. To contextualize this, one would need to analyze aggregate federal spending data for NAICS code 541714 and related biotechnology research categories across agencies like HHS (including NIH), DOD, NSF, and others. Historically, major federal R&D initiatives, especially those addressing critical public health needs or emerging scientific frontiers, can reach hundreds of millions or even billions of dollars over several years. For instance, significant investments are often channeled into areas like vaccine development, infectious disease research, and advanced therapeutics. Comparing this single award to the total annual federal R&D budget for biotechnology, or to other large, multi-year contracts in the sector, would reveal whether this represents a typical, above-average, or below-average investment for a project of this scope and duration.

What are the primary risks associated with a firm-fixed-price contract for a long-term biotechnology R&D effort?

A firm-fixed-price (FFP) contract for a long-term biotechnology R&D effort presents specific risks. For the contractor, the primary risk is underestimating the costs and effort required over the multi-year duration, especially in a field as unpredictable as R&D. Scientific breakthroughs or setbacks can significantly alter project timelines and resource needs, potentially leading to financial losses if costs exceed the fixed price. For the government, the risk lies in potentially paying a premium upfront to account for the contractor's risk, and in reduced flexibility. If research directions need to pivot due to new discoveries or changing priorities, modifying an FFP contract can be complex and costly, potentially hindering agility. Effective management, clear milestones, and robust technical oversight are crucial to mitigate these risks.

What specific types of biotechnology research or development are likely to be prioritized under this contract, given the agency (ASPR) and NAICS code?

Given that the award is to the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS, and falls under NAICS code 541714 (Research and Development in Biotechnology), the research is likely focused on areas relevant to public health preparedness and response. This could include, but is not limited to, the development of novel vaccines, therapeutics (antivirals, antibiotics), diagnostic tools, and countermeasures against infectious diseases, chemical, biological, radiological, and nuclear (CBRN) threats. ASPR's mission is to lead the nation in preventing, preparing for, and responding to health emergencies. Therefore, the R&D efforts funded by this contract are expected to directly support these objectives, aiming to enhance the nation's ability to combat health crises and protect the public.

How does the contract duration of over 6 years (2286 days) impact the assessment of value for money in R&D?

A contract duration of over six years for R&D is significant and impacts value-for-money assessment in several ways. On the positive side, it allows for sustained focus and investment in complex, long-term scientific endeavors that cannot yield results quickly. This continuity can foster deeper innovation and allow researchers to pursue more ambitious goals, potentially leading to more impactful breakthroughs. However, it also introduces risks related to technological obsolescence, shifting scientific paradigms, and the contractor's sustained performance and cost control over an extended period. Value for money is assessed by evaluating whether the potential long-term benefits and advancements justify the substantial, multi-year investment, considering the inherent uncertainties of R&D and the effectiveness of oversight mechanisms throughout the contract's life.

What are the implications of the contract being awarded in South Carolina (SC) for federal R&D spending distribution?

The indication that the contract is associated with South Carolina (SC) suggests a geographic distribution of federal R&D spending. While the prime contractor, Advanced Technology International, may have its headquarters elsewhere, the performance location or a significant portion of the work could be based in South Carolina. This aligns with federal efforts to distribute research funding across various regions, potentially fostering economic development and scientific capacity outside of traditional hubs. The specific impact depends on the scale of operations, job creation, and the development of local scientific infrastructure related to this contract. It highlights that significant federal R&D investments are not solely concentrated in a few major metropolitan areas.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 315 SIGMA DR, SUMMERVILLE, SC, 29486

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

Financial Breakdown

Contract Ceiling: $795,000,000

Exercised Options: $795,000,000

Current Obligation: $795,000,000

Actual Outlays: $13,814,938

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75A50123D00005

IDV Type: IDC

Timeline