HHS awards $99M for antibiotics, with Chartwell Rx LLC securing the contract

Contract Overview

Contract Amount: $99,047,470 ($99.0M)

Contractor: Chartwell RX LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-30

End Date: 2026-03-23

Contract Duration: 1,270 days

Daily Burn Rate: $78.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DOXYCYCLINE HYCLATE TABLETS AND AMOXICILLIN TRIHYDRATE CAPSULES

Place of Performance

Location: CONGERS, ROCKLAND County, NEW YORK, 10920

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $99.0 million to CHARTWELL RX LLC for work described as: DOXYCYCLINE HYCLATE TABLETS AND AMOXICILLIN TRIHYDRATE CAPSULES Key points: 1. The contract value represents a significant investment in pharmaceutical preparedness. 2. Competition dynamics for this award are detailed in the 'ca' section. 3. Risk indicators are assessed based on contractor performance and market factors. 4. Performance context is provided by comparing this award to similar pharmaceutical procurements. 5. This contract positions the government to ensure access to critical medications. 6. The pricing structure is analyzed for value-for-money in the 'va' section.

Value Assessment

Rating: good

The total award of $99,047,470.08 for doxycycline hyclate tablets and amoxicillin trihydrate capsules appears reasonable given the duration and scope. Benchmarking against similar large-scale pharmaceutical procurements for strategic national stockpiles suggests that pricing is competitive. The firm-fixed-price structure provides cost certainty for the government, although it may limit flexibility if market conditions change drastically. Further analysis would involve comparing unit prices for specific dosage forms and quantities against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specific pharmaceutical supply contract. While two bidders is better than a sole-source award, a higher number of competitors could potentially drive prices down further and foster greater innovation. The government's ability to secure multiple bids is a positive sign for price discovery.

Taxpayer Impact: The full and open competition process increases the likelihood that taxpayer dollars are being used efficiently by encouraging competitive pricing among pharmaceutical manufacturers.

Public Impact

The primary beneficiaries are the American public, who gain assurance of access to essential antibiotics during public health emergencies. The services delivered include the manufacturing and supply of doxycycline hyclate tablets and amoxicillin trihydrate capsules. The geographic impact is national, ensuring availability across the United States through the Strategic National Stockpile. Workforce implications include support for jobs within the pharmaceutical manufacturing sector, particularly at Chartwell Rx LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on a single contractor for a critical supply could pose a risk if performance issues arise.
Market volatility in raw material costs could affect long-term pricing stability.

Positive Signals

Contractor has experience in pharmaceutical manufacturing.
Firm-fixed-price contract provides budget certainty.
Awarded through full and open competition, suggesting a competitive process.
Contract duration allows for sustained supply chain management.

Sector Analysis

The pharmaceutical manufacturing sector is highly regulated and characterized by significant research and development costs, stringent quality control, and complex supply chains. This contract falls within the broader category of pharmaceutical preparation manufacturing, specifically focusing on essential antibiotics for public health preparedness. The market for such critical medications is often influenced by government stockpiling needs and emergency preparedness initiatives. Comparable spending benchmarks would involve analyzing other large-scale contracts for antibiotics and related pharmaceuticals awarded by agencies like HHS or the Department of Defense for strategic reserves.

Small Business Impact

This contract was awarded to Chartwell Rx LLC and does not appear to have specific small business set-aside provisions. However, the prime contractor may engage small businesses for subcontracting opportunities related to manufacturing, logistics, or raw material sourcing. The impact on the broader small business ecosystem will depend on the extent to which Chartwell Rx LLC utilizes subcontracting and the availability of qualified small businesses within its supply chain.

Oversight & Accountability

Oversight for this contract is likely managed by the Office of Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified pharmaceutical products. Transparency is facilitated through federal procurement databases where contract awards are published. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Strategic National Stockpile
Antimicrobial Resistance Initiatives
Public Health Emergency Preparedness
Pharmaceutical Supply Chain Management
Department of Health and Human Services Contracts

Risk Flags

Supply Chain Vulnerability
Contractor Performance Risk
Quality Assurance Compliance

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $99.0 million to CHARTWELL RX LLC. DOXYCYCLINE HYCLATE TABLETS AND AMOXICILLIN TRIHYDRATE CAPSULES

Who is the contractor on this award?

The obligated recipient is CHARTWELL RX 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 $99.0 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-03-23.

What is Chartwell Rx LLC's track record with federal contracts, particularly for pharmaceutical supplies?

Chartwell Rx LLC has a history of federal contracting, with this award representing a significant value. A review of federal procurement data indicates previous awards to the company, though the scale and nature of those contracts may vary. To fully assess their track record, one would need to examine past performance evaluations, any history of contract disputes or terminations, and their experience with similar large-volume pharmaceutical procurements. Understanding their capacity to meet the stringent quality and delivery requirements for essential medicines is crucial. This specific contract's duration and value suggest a level of trust placed in their capabilities by the Department of Health and Human Services.

How does the pricing of these antibiotics compare to market rates or similar government contracts?

The total award of $99,047,470.08 for doxycycline hyclate tablets and amoxicillin trihydrate capsules is structured under a firm-fixed-price agreement. Benchmarking this against publicly available market data for these specific antibiotics can be challenging due to variations in dosage, quantity, and packaging. However, given the scale of this procurement for the Strategic National Stockpile, it is likely that HHS negotiated competitive pricing. Comparing unit costs to other large-volume government contracts for similar essential medicines would provide a more robust value assessment. The fact that it was awarded under full and open competition suggests that the pricing was deemed acceptable in a competitive environment.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential supply chain disruptions, quality control failures, and contractor performance issues. The reliance on a single prime contractor for a critical supply necessitates robust oversight. Mitigation strategies likely involve stringent quality assurance protocols, regular performance monitoring by ASPR, and clear contractual remedies for non-compliance. The firm-fixed-price nature of the contract incentivizes the contractor to meet delivery schedules and quality standards to ensure payment. Diversification of the supply chain for raw materials by the contractor would also mitigate risks.

How effective is this contract in ensuring the availability of essential antibiotics for public health emergencies?

This contract is designed to directly enhance the nation's preparedness by securing a substantial supply of critical antibiotics. By awarding a multi-year contract, the government ensures a consistent availability of these medications for the Strategic National Stockpile, which is a cornerstone of public health emergency response. The effectiveness hinges on the contractor's ability to maintain production, adhere to quality standards, and deliver on time. Regular inventory checks and demand forecasting by HHS will further contribute to the overall effectiveness of this procurement in meeting potential public health needs.

What are the historical spending patterns for similar pharmaceutical procurements by HHS or other agencies?

HHS and other federal agencies, particularly those involved in health and defense, consistently allocate significant funds towards securing essential pharmaceuticals for stockpiles and operational needs. Historical spending patterns reveal a trend of multi-year, high-value contracts for critical medications like antibiotics, antivirals, and vaccines. These procurements are often driven by national security and public health preparedness mandates. Analyzing past awards for doxycycline and amoxicillin, as well as other broad-spectrum antibiotics, would show a recurring need and investment in maintaining adequate reserves, often in the tens to hundreds of millions of dollars annually across the federal government.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75A50122Q00018

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 77 BRENNER DR, CONGERS, NY, 10920

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

Financial Breakdown

Contract Ceiling: $99,047,470

Exercised Options: $99,047,470

Current Obligation: $99,047,470

Actual Outlays: $99,042,528

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36F79720D0198

IDV Type: FSS

Timeline