Wisconsin receives $5.6M for FDA tobacco retailer compliance inspections through 2025

Contract Overview

Contract Amount: $5,612,392 ($5.6M)

Contractor: State of Wisconsin Department of Health Services

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-09

End Date: 2025-09-29

Contract Duration: 1,665 days

Daily Burn Rate: $3.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Healthcare

Official Description: CONDUCT INSPECTIONS OF RETAILERS THAT SELL AND ADVERTISE ANY REGULATED TOBACCO PRODUCTS TO DETERMINE COMPLIANCE AND SUBMIT INSPECTION RESULTS TO FDA.

Place of Performance

Location: MADISON, DANE County, WISCONSIN, 53701

State: Wisconsin Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $5.6 million to STATE OF WISCONSIN DEPARTMENT OF HEALTH SERVICES for work described as: CONDUCT INSPECTIONS OF RETAILERS THAT SELL AND ADVERTISE ANY REGULATED TOBACCO PRODUCTS TO DETERMINE COMPLIANCE AND SUBMIT INSPECTION RESULTS TO FDA. Key points: 1. Contract focuses on ensuring retailers adhere to regulations for tobacco product sales and advertising. 2. The award is a definitive contract, indicating a specific scope of work and duration. 3. The contract's value is substantial for a state-level public health program. 4. Performance is tied to submitting inspection results to the FDA, ensuring federal oversight. 5. The duration of the contract suggests a sustained effort in compliance monitoring. 6. This contract supports a critical public health objective by regulating tobacco access.

Value Assessment

Rating: good

The contract value of $5.6 million over approximately 4.5 years for conducting inspections of tobacco retailers appears reasonable for a statewide program. While direct comparisons are difficult without knowing the exact number of retailers and inspections planned, similar state-level public health contracts for compliance monitoring often fall within this range. The cost-no-fee pricing structure suggests that the primary cost is borne by the government, with the state receiving funds to cover its operational expenses for conducting these inspections. This is a common and generally efficient model for delegating such tasks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific entity possesses unique qualifications or capabilities essential for the contract's execution, or when it's deemed most efficient to contract with an existing governmental or quasi-governmental entity. In this case, contracting with the State of Wisconsin Department of Health Services likely leverages existing state infrastructure, personnel, and established relationships for conducting these inspections.

Taxpayer Impact: Sole-source awards can sometimes lead to higher costs for taxpayers if competitive bidding could have driven down prices. However, in cases where a state agency is the most efficient and capable entity to perform the work, it can also represent good value by utilizing existing resources and avoiding duplicative efforts.

Public Impact

The primary beneficiaries are the residents of Wisconsin, who will experience improved compliance with tobacco sales and advertising regulations. The services delivered include conducting inspections of retailers selling and advertising regulated tobacco products. The geographic impact is statewide within Wisconsin. Workforce implications include the utilization of state health department personnel for inspection and reporting duties. The FDA benefits from receiving timely and accurate inspection results to enforce federal tobacco regulations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may limit opportunities for cost savings through bidding.
Sole-source nature requires strong justification to ensure fair value for taxpayer funds.
Reliance on a single entity for execution could pose risks if that entity faces operational challenges.

Positive Signals

Leverages existing state infrastructure and expertise, potentially leading to efficient execution.
Directly supports a critical public health mission with a clear objective.
Established relationship between FDA and state health departments can streamline operations.

Sector Analysis

This contract falls within the Public Health and Government Services sector. The Food and Drug Administration (FDA) frequently contracts with state and local health departments to conduct compliance monitoring and enforcement activities, particularly for regulated products like tobacco. These agreements leverage existing state regulatory frameworks and personnel. Benchmarks for similar contracts are difficult to establish precisely due to variations in scope, geographic area, and specific regulatory requirements, but the funding level is consistent with significant public health program support.

Small Business Impact

This contract does not appear to involve small business set-asides, as it is a sole-source award to a state government agency. There is no indication of subcontracting requirements for small businesses within the provided data. The focus is on the state agency's direct performance of the inspection services.

Oversight & Accountability

Oversight is primarily conducted by the Food and Drug Administration (FDA), which receives the inspection results and is responsible for ensuring compliance with federal regulations. The contract's performance is measured by the submission of these results. Accountability rests with the State of Wisconsin Department of Health Services to conduct thorough and accurate inspections. Transparency is facilitated by the FDA's role in reviewing the submitted data and potentially making it publicly available as part of its regulatory functions.

Related Government Programs

FDA Tobacco Compliance Programs
State Public Health Grants
Retailer Compliance Monitoring
Tobacco Prevention and Control Initiatives

Risk Flags

Sole-source award lacks competitive pricing pressure.
Performance relies on state agency's internal capacity and priorities.
Effectiveness depends on the thoroughness and accuracy of state-conducted inspections.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $5.6 million to STATE OF WISCONSIN DEPARTMENT OF HEALTH SERVICES. CONDUCT INSPECTIONS OF RETAILERS THAT SELL AND ADVERTISE ANY REGULATED TOBACCO PRODUCTS TO DETERMINE COMPLIANCE AND SUBMIT INSPECTION RESULTS TO FDA.

Who is the contractor on this award?

The obligated recipient is STATE OF WISCONSIN DEPARTMENT OF HEALTH SERVICES.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $5.6 million.

What is the period of performance?

Start: 2021-03-09. End: 2025-09-29.

What is the historical spending by the FDA on similar tobacco retailer compliance inspection contracts with state agencies?

Historical spending data for the FDA on similar tobacco retailer compliance inspection contracts with state agencies can vary significantly based on the number of states contracted, the scope of work, and the specific regulatory focus (e.g., all tobacco products vs. specific categories like e-cigarettes). While this specific contract with Wisconsin is valued at approximately $5.6 million over its duration, the FDA has a broad mandate for tobacco regulation. Past awards have ranged from smaller, targeted grants to larger, multi-year agreements with multiple states. Analyzing the FDA's budget allocations for its Center for Tobacco Products and reviewing contract databases like FPDS-NG would provide a more comprehensive picture of historical spending patterns. However, it's common for the FDA to allocate tens of millions annually across various states and territories for such compliance activities to ensure nationwide adherence to tobacco laws.

How does the per-inspection cost compare to industry benchmarks or other state contracts?

Determining a precise per-inspection cost benchmark is challenging without detailed information on the number of retailers, the frequency of inspections, and the specific activities involved in each inspection. The total contract value is $5,612,391.51, and the duration is approximately 1665 days (from March 9, 2021, to September 29, 2025). If we assume roughly 1100 days of active work (excluding weekends and holidays), and if the state conducts, for example, 10,000 inspections over this period, the cost per inspection would be around $560. This figure needs to be contextualized by the complexity of the inspection, reporting requirements, and the administrative overhead involved. Without specific data on the number of inspections, a direct comparison to industry benchmarks or other state contracts is not feasible. However, costs for compliance inspections can range widely, from a few hundred to over a thousand dollars per inspection, depending on these factors.

What are the specific performance metrics and deliverables required under this contract?

The primary deliverable explicitly mentioned is the submission of 'inspection results to FDA.' This implies that the State of Wisconsin Department of Health Services is responsible for conducting inspections of retailers that sell and advertise regulated tobacco products and then reporting the findings of these inspections to the Food and Drug Administration. Specific performance metrics would likely include the timeliness of these submissions, the accuracy and completeness of the inspection reports, and potentially adherence to specific sampling or inspection protocols defined by the FDA. The contract likely outlines detailed procedures for what constitutes a 'regulated tobacco product,' the criteria for determining compliance or non-compliance during an inspection, and the format and frequency for submitting the collected data. Failure to meet these performance standards could result in contract modifications or termination.

What is the track record of the State of Wisconsin Department of Health Services in managing similar public health compliance contracts?

The State of Wisconsin Department of Health Services (DHS) has a long-standing role in public health regulation and enforcement, including areas related to controlled substances and health product compliance. While specific details of their past performance on FDA-funded tobacco compliance contracts are not provided in this data, state health departments typically possess the necessary infrastructure, trained personnel, and established protocols for conducting inspections and managing related data. Their experience in administering state-level public health programs suggests a capacity to handle such federal agreements. The FDA's decision to award this contract on a sole-source basis likely reflects confidence in Wisconsin DHS's existing capabilities and established working relationship for fulfilling these critical public health functions.

Are there any identified risks associated with this sole-source contract, and how are they being mitigated?

The primary risk associated with a sole-source contract is the potential lack of competitive pressure, which could lead to suboptimal pricing or reduced innovation. In this case, since the award is to a state agency, the risk might be more related to operational efficiency and resource allocation rather than profit maximization. Mitigation strategies likely involve robust oversight from the FDA, clear performance expectations, and regular reporting requirements. The FDA would monitor the quality and timeliness of the inspections and data submitted. Furthermore, the state agency's inherent public service mission and existing regulatory framework serve as a form of mitigation, as their goal is compliance and public health rather than profit. The FDA could also have clauses allowing for review and potential re-competition if performance is unsatisfactory or if circumstances change.

Industry Classification

NAICS: Public Administration › Administration of Human Resource Programs › Administration of Public Health Programs

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75F40120R00008

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 1 W WILSON ST RM 651, MADISON, WI, 53703

Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business, U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $5,612,392

Exercised Options: $5,612,392

Current Obligation: $5,612,392

Actual Outlays: $5,612,392

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline