HHS awards $73.4M for pharmaceutical cache, with 2 bidders competing for firm-fixed-price contract

Contract Overview

Contract Amount: $73,356 ($73.4K)

Contractor: Avmedical LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-23

End Date: 2025-09-22

Contract Duration: 364 days

Daily Burn Rate: $202/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDSURGE SUPPLIES - FMS PHARMA CACHE

Place of Performance

Location: FRANKLIN, WILLIAMSON County, TENNESSEE, 37064

State: Tennessee Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $73,356.1 to AVMEDICAL LLC for work described as: MEDSURGE SUPPLIES - FMS PHARMA CACHE Key points: 1. The contract value represents a significant investment in maintaining critical medical supplies. 2. The firm-fixed-price structure shifts cost risk to the contractor. 3. The presence of two bidders suggests a moderately competitive market for these specialized supplies. 4. The contract duration of one year allows for flexibility in addressing evolving needs. 5. The award is managed by the Office of the Assistant Secretary for Preparedness and Response (ASPR), indicating a focus on emergency preparedness. 6. The geographic location of the contractor in Tennessee may influence logistics and delivery timelines.

Value Assessment

Rating: good

Benchmarking the value of this contract requires specific data on comparable pharmaceutical cache procurements. However, a $73.4 million award for a one-year duration for specialized medical supplies suggests a substantial investment. The firm-fixed-price (FFP) contract type is generally favorable for the government as it caps costs. Without specific per-unit data or comparison to similar cache maintenance contracts, a definitive value-for-money assessment is challenging, but the competitive nature of the award is a positive indicator.

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. With two bidders participating, the competition level is moderate. While more bidders could potentially drive prices lower, two bidders still provide a basis for price comparison and negotiation, suggesting a degree of market responsiveness. The ASPR's approach to competition here aims to ensure a balance between securing necessary supplies and achieving reasonable pricing.

Taxpayer Impact: The full and open competition with two bidders provides a reasonable level of price discovery for taxpayers, helping to ensure that the awarded price is competitive within the market for these essential supplies.

Public Impact

The primary beneficiaries are the public, through the assured availability of critical pharmaceutical supplies during emergencies. The contract ensures the maintenance and readiness of a pharmaceutical cache managed by HHS. The geographic impact is national, as the cache is intended to support public health responses across the United States. Workforce implications are likely indirect, supporting roles within HHS and potentially the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting cache readiness.
Ensuring the quality and efficacy of pharmaceuticals over the contract period.
Dependence on a limited number of suppliers for critical medical assets.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition promotes market engagement.
Contract supports a critical public health function (emergency preparedness).

Sector Analysis

The pharmaceutical and medical supply sector is a critical component of the healthcare industry, encompassing the manufacturing and distribution of essential medicines and devices. Government contracts in this area are vital for national security, public health emergencies, and maintaining strategic reserves. Spending in this sector is often driven by preparedness needs, research, and the operational requirements of federal health agencies. Comparable spending benchmarks would typically involve other federal procurements for strategic national stockpiles or large-scale medical supply contracts.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not explicitly detailed in the provided data. The award to AVMEDICAL LLC, without specific size information, suggests it may be an established entity capable of fulfilling large-scale requirements. Further analysis would be needed to determine if subcontracting plans include provisions for small business participation.

Oversight & Accountability

Oversight for this contract is likely managed by the Office of the Assistant Secretary for Preparedness and Response (ASPR) within HHS. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and quality control requirements. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Strategic National Stockpile
HHS Pharmaceutical Stockpile
Medical Countermeasures Stockpile
Public Health Emergency Preparedness Contracts

Risk Flags

Potential for supply chain vulnerabilities
Ensuring pharmaceutical efficacy and shelf-life
Dependence on contractor performance for critical supplies

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $73,356.1 to AVMEDICAL LLC. MEDSURGE SUPPLIES - FMS PHARMA CACHE

Who is the contractor on this award?

The obligated recipient is AVMEDICAL 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 $73,356.1.

What is the period of performance?

Start: 2024-09-23. End: 2025-09-22.

What is the historical spending pattern for pharmaceutical cache maintenance by HHS or ASPR?

Analyzing historical spending for pharmaceutical cache maintenance by HHS or ASPR is crucial for understanding trends and establishing benchmarks. Without access to specific historical data for this particular cache, we can infer that spending in this area is likely consistent and driven by the need to maintain readiness for public health emergencies. Federal agencies often award multi-year contracts or a series of annual contracts to ensure the continuous availability and efficacy of critical supplies. Fluctuations in spending could be influenced by changes in threat assessments, new pharmaceutical developments, or shifts in federal budget priorities. A comprehensive review would involve examining past contract awards for similar services, including contract values, durations, and the number of bidders, to identify any significant increases or decreases in investment over time.

How does the per-unit cost of items in this cache compare to market rates or other federal procurements?

Determining the per-unit cost comparison requires detailed itemization of the pharmaceuticals within the cache and their associated costs, which is not provided in the summary data. However, the firm-fixed-price nature of the contract suggests that AV MEDICAL LLC has factored in their costs, including profit, into the overall award amount. To assess value for money, one would need to compare the unit prices of specific drugs or medical supplies against publicly available market data or against prices paid by other federal agencies for identical or comparable items. Factors such as quantity, packaging, expiration dating, and delivery requirements can significantly influence unit prices. The competitive bidding process, with two bidders, provides a basis for comparison between offers, but external benchmarking is essential for a definitive value assessment.

What are the specific risks associated with maintaining a pharmaceutical cache of this size and scope?

Maintaining a pharmaceutical cache of this magnitude involves several key risks. Foremost is the risk of product degradation or expiration, requiring robust inventory management, rotation, and quality assurance protocols to ensure the efficacy of the pharmaceuticals when needed. Supply chain disruptions, whether due to manufacturing issues, transportation problems, or geopolitical events, could impact the availability of necessary medications for replenishment or immediate deployment. Furthermore, the risk of obsolescence exists as new treatments or countermeasures emerge, potentially rendering older stock less effective or irrelevant. Security risks, including theft or tampering, also need to be managed. Finally, there's the financial risk associated with the significant investment, ensuring that the allocated funds are used efficiently and that the cache remains relevant to current public health threats.

What is the track record of AV MEDICAL LLC in fulfilling federal contracts, particularly for medical supplies?

Assessing the track record of AV MEDICAL LLC is vital for understanding their capability and reliability in fulfilling this significant contract. A review of their past performance on federal contracts, particularly those involving medical supplies, pharmaceuticals, or emergency preparedness, would provide insights into their delivery history, quality of goods/services, and adherence to contract terms. Data from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be instrumental. Positive performance indicators would include timely deliveries, high-quality products, and favorable past performance reviews. Conversely, any history of contract disputes, late deliveries, or quality issues would raise concerns and warrant closer scrutiny of their capacity to manage this current award effectively.

How does the competition level (2 bidders) impact the government's ability to secure favorable pricing and terms?

A competition level with two bidders offers a moderate degree of price discovery and negotiation leverage for the government. While more bidders generally lead to more competitive pricing, two bidders still provide a basis for comparison, preventing a sole-source situation where pricing could be significantly inflated. The government can leverage the competing offers to negotiate the best possible price and terms. However, the government's ability to secure truly favorable pricing may be somewhat constrained compared to a scenario with numerous bidders. The specific nature of the supplies, the complexity of the requirements, and the availability of qualified contractors in the market all play a role. The firm-fixed-price structure further solidifies the pricing once awarded, but the initial negotiation is key.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies 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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4037 RURAL PLAINS CIR STE 160, FRANKLIN, TN, 37064

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $73,356

Exercised Options: $73,356

Current Obligation: $73,356

Actual Outlays: $73,356

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75A50121A00005

IDV Type: BPA

Timeline