Nearly $5M Contract for Tobacco Retailer Inspections Awarded to State Agency

Contract Overview

Contract Amount: $4,974,945 ($5.0M)

Contractor: Health, NEW Jersey Department of

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-23

End Date: 2025-09-29

Contract Duration: 1,651 days

Daily Burn Rate: $3.0K/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: SILVER SPRING, MONTGOMERY County, MARYLAND, 20993

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $5.0 million to HEALTH, NEW JERSEY DEPARTMENT OF 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. Focuses on ensuring compliance with tobacco sales and advertising regulations. 2. Contract duration extends over four years, indicating a sustained effort. 3. Awarded to a state-level health department, suggesting a partnership model. 4. The contract type is 'Cost No Fee', which requires careful monitoring of expenses. 5. The scope involves deterring illegal sales and advertising practices. 6. Performance is measured by the submission of inspection results to the FDA.

Value Assessment

Rating: fair

The contract's value of approximately $4.97 million over 1651 days (roughly $3,000 per day) appears reasonable for a state-level public health initiative involving regulatory compliance. However, without specific benchmarks for the number of inspections or the complexity of the regulated products, a precise value-for-money assessment is challenging. The 'Cost No Fee' structure necessitates close scrutiny of incurred costs to ensure they align with the intended scope and are not excessive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. While the specific justification for this approach is not detailed, it may stem from the unique capabilities or existing relationship of the New Jersey Department of Health in conducting such inspections within its jurisdiction. The lack of competition means that pricing and service delivery were not tested against alternative providers, potentially limiting opportunities for cost savings or innovative approaches.

Taxpayer Impact: Taxpayers may not have benefited from the competitive pricing that could have resulted from an open bidding process. The absence of competition could also mean that the government did not explore potentially more cost-effective methods or providers.

Public Impact

Benefits the public by aiming to reduce illegal sales and advertising of regulated tobacco products, particularly to minors. Services delivered include conducting inspections of retailers and submitting compliance results to the FDA. Geographic impact is focused on New Jersey, where the Department of Health operates. Workforce implications involve state employees conducting these inspections, potentially requiring specialized training.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
The 'Cost No Fee' contract type requires robust oversight to manage expenses effectively.
Performance metrics beyond submitting results are not explicitly detailed, potentially impacting accountability.

Positive Signals

Leverages existing state infrastructure and expertise for regulatory enforcement.
Directly supports federal efforts (FDA) in tobacco control.
Aims to improve public health by enforcing tobacco sales regulations.

Sector Analysis

This contract falls within the public health and regulatory services sector. It supports the federal government's mandate to regulate tobacco products, a significant area of public health concern. Comparable spending in this sector often involves contracts for compliance monitoring, enforcement, and public health campaigns. The market for such services can include government agencies, non-profit organizations, and specialized consulting firms.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded directly to a state government department. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

Oversight for this 'Cost No Fee' contract would primarily fall to the awarding agency (FDA) to ensure that the costs incurred by the New Jersey Department of Health are reasonable and directly related to the contract's objectives. Accountability is tied to the submission of inspection results. Transparency could be enhanced by making the specific inspection criteria and findings publicly available, subject to privacy and proprietary considerations.

Related Government Programs

FDA Tobacco Compliance Inspections
State Public Health Program Grants
Retailer Compliance Monitoring

Risk Flags

Sole-source award lacks competitive pricing.
Cost-reimbursement contract requires diligent oversight.
Performance metrics beyond deliverable submission could be enhanced.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $5.0 million to HEALTH, NEW JERSEY DEPARTMENT OF. 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 HEALTH, NEW JERSEY DEPARTMENT OF.

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 $5.0 million.

What is the period of performance?

Start: 2021-03-23. End: 2025-09-29.

What is the specific methodology and frequency of inspections conducted under this contract?

The provided data does not detail the specific methodology or frequency of inspections. However, the contract's objective is to 'CONDUCT INSPECTIONS OF RETAILERS THAT SELL AND ADVERTISE ANY REGULATED TOBACCO PRODUCTS TO DETERMINE COMPLIANCE'. This implies a process of site visits to retail establishments to verify adherence to federal and state regulations concerning tobacco sales (e.g., to minors) and advertising practices. The FDA likely has established protocols for such inspections, which the contractor is expected to follow. The frequency would depend on factors such as the number of regulated retailers in New Jersey, risk assessments of specific retailers, and the overall compliance strategy of the FDA. Detailed operational procedures would typically be outlined in the contract's statement of work.

How does the 'Cost No Fee' contract structure impact financial oversight and potential for cost overruns?

A 'Cost No Fee' contract means the contractor is reimbursed for all allowable costs incurred in performing the contract, but receives no additional fee or profit. This structure places a significant emphasis on robust financial oversight by the government agency (FDA). The FDA must meticulously review and approve all claimed expenses to ensure they are reasonable, allocable, and allowable under the contract terms. This requires detailed documentation from the contractor and diligent auditing by the government. The risk of cost overruns is mitigated by the absence of a fee, but the government still bears the full cost of the work performed. Effective oversight is crucial to prevent inflated costs or expenditures on non-essential activities.

What are the key performance indicators (KPIs) used to measure the success of this contract beyond submitting inspection results?

The primary performance metric explicitly mentioned is the submission of inspection results to the FDA. While this is a critical deliverable, it represents an output rather than an outcome. To comprehensively measure success, additional KPIs could include the rate of retailer compliance identified through inspections, the trend in compliance rates over time, the number of enforcement actions initiated based on inspection findings, and potentially a reduction in illegal tobacco sales to minors within the targeted geographic area. The effectiveness of the contract is ultimately tied to its contribution to the FDA's broader mission of protecting public health through tobacco regulation.

What is the track record of the New Jersey Department of Health in conducting similar regulatory inspections?

The New Jersey Department of Health has a mandate and established infrastructure for public health programs, which typically includes regulatory oversight and enforcement activities. While specific details of their track record in conducting tobacco retailer inspections are not provided in this data, state health departments are generally experienced in managing compliance programs, conducting investigations, and interacting with regulated entities. Their existing relationships with retailers and understanding of the local regulatory landscape would be valuable assets. The FDA's decision to award this contract sole-source likely reflects confidence in the department's capacity and past performance in related public health enforcement areas.

How does this contract's spending compare to other federal efforts in tobacco control or retailer compliance?

Comparing this $4.97 million contract to other federal efforts requires broader data on FDA's tobacco program expenditures and similar state-level contracts. The FDA's overall budget for tobacco regulation is substantial, encompassing research, enforcement, education, and policy development. This contract represents a specific allocation for outsourced inspection services in one state. Federal grants to states for public health initiatives vary widely, but funding for compliance and enforcement activities is common. Without a direct comparison of the scope (number of retailers, frequency of checks) and duration, it's difficult to benchmark this specific contract's spending against the entirety of federal tobacco control spending, which includes numerous other activities and contracts.

What are the potential risks associated with a sole-source award for regulatory compliance services?

The primary risk associated with a sole-source award is the potential lack of competitive pressure, which can lead to higher costs and potentially less innovation compared to a competed contract. Without multiple bidders, there's less incentive for the contractor to offer the most cost-effective solution or to develop novel approaches to inspections. Furthermore, the government may miss out on identifying other qualified entities that could offer superior services or better value. Ensuring fair pricing and adequate performance requires heightened vigilance and robust oversight from the awarding agency when competition is absent.

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: 369 S WARREN ST, TRENTON, NJ, 08608

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

Financial Breakdown

Contract Ceiling: $4,974,945

Exercised Options: $4,974,945

Current Obligation: $4,974,945

Actual Outlays: $4,927,021

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline