HHS Awards $6.4M for Vaccine Storage and Rotation to Merck Sharp & Dohme LLC Through 2026
Contract Overview
Contract Amount: $6,426,702 ($6.4M)
Contractor: Merck Sharp & Dohme LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2021-09-16
End Date: 2026-09-15
Contract Duration: 1,825 days
Daily Burn Rate: $3.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: VACCINE STORAGE AND ROTATION, 2021-2026
Place of Performance
Location: KENILWORTH, UNION County, NEW JERSEY, 07033
Plain-Language Summary
Department of Health and Human Services obligated $6.4 million to MERCK SHARP & DOHME LLC for work described as: VACCINE STORAGE AND ROTATION, 2021-2026 Key points: 1. The contract, valued at $6.4 million over five years, focuses on essential vaccine storage and rotation services. 2. Competition was not utilized for this award, raising questions about potential price discovery. 3. The primary risk lies in the lack of competitive bidding, potentially leading to suboptimal pricing. 4. The sector is healthcare logistics, a critical component of public health infrastructure.
Value Assessment
Rating: questionable
The contract's value of $6.4 million over five years for vaccine storage and rotation needs benchmarking against similar government or commercial contracts. Without competitive bids, it's difficult to assess if this price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This approach bypasses the standard competitive process, potentially limiting price discovery and the opportunity to secure the best value for taxpayers.
Taxpayer Impact: The lack of competition may result in higher costs for taxpayers compared to a fully competed contract, as the government may not have benefited from market-driven price reductions.
Public Impact
Ensures the availability and efficacy of critical vaccines through proper storage. Supports public health initiatives by maintaining a stable vaccine supply chain. Potential for increased costs to taxpayers due to non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Sole-source award
Positive Signals
- Essential service for public health
- Long-term contract provides stability
Sector Analysis
This contract falls within the healthcare logistics and cold chain management sector. Spending in this area is critical for maintaining public health, especially for temperature-sensitive pharmaceuticals like vaccines. Benchmarks for similar storage contracts are often influenced by volume, duration, and specific temperature requirements.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award. The focus appears to be on a large, established provider for specialized services.
Oversight & Accountability
Oversight would typically involve monitoring contract performance, adherence to storage protocols, and financial accountability. The non-competitive nature necessitates careful review to ensure the government is receiving adequate value and service.
Related Government Programs
- Refrigerated Warehousing and Storage
- Department of Health and Human Services Contracting
- Centers for Disease Control and Prevention Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in award justification
- Reliance on a single provider
Tags
refrigerated-warehousing-and-storage, department-of-health-and-human-services, nj, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $6.4 million to MERCK SHARP & DOHME LLC. VACCINE STORAGE AND ROTATION, 2021-2026
Who is the contractor on this award?
The obligated recipient is MERCK SHARP & DOHME LLC.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).
What is the total obligated amount?
The obligated amount is $6.4 million.
What is the period of performance?
Start: 2021-09-16. End: 2026-09-15.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award needs to be clearly documented and publicly available. Typically, this involves demonstrating that only one responsible source can provide the required services or that exceptional circumstances prevent full and open competition. Without this justification, the award raises concerns about adherence to procurement regulations and potential missed opportunities for better pricing.
How does the pricing compare to industry standards for similar vaccine storage services?
Benchmarking the pricing against industry standards is crucial, especially for sole-source contracts. Analysis should consider factors like storage volume, temperature control requirements, rotation services, and geographic location. If the awarded price significantly exceeds comparable market rates, it indicates a potential lack of value for taxpayer money and warrants further investigation into the pricing structure.
What are the performance metrics and oversight mechanisms in place to ensure service quality?
Robust performance metrics and oversight are essential to ensure the contractor meets all requirements for vaccine storage and rotation, maintaining product integrity. This includes regular audits, monitoring of temperature logs, and timely reporting. Strong oversight can mitigate some risks associated with non-competitive awards by ensuring accountability and adherence to contract terms.
Industry Classification
NAICS: Transportation and Warehousing › Warehousing and Storage › Refrigerated Warehousing and Storage
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Merck & CO., Inc.
Address: 2000 GALLOPING HILL RD, KENILWORTH, NJ, 07033
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: $6,426,702
Exercised Options: $6,426,702
Current Obligation: $6,426,702
Actual Outlays: $5,318,003
Contract Characteristics
Commercial Item: SERVICES PURSUANT TO FAR 12.102(G)
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 75D30121D12419
IDV Type: IDC
Timeline
Start Date: 2021-09-16
Current End Date: 2026-09-15
Potential End Date: 2026-09-15 00:00:00
Last Modified: 2026-01-08
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