NIH awards $128.7M for chemical products, with a significant portion for 'All Other Miscellaneous Chemical Product and Preparation Manufacturing'

Contract Overview

Contract Amount: $128,719 ($128.7K)

Contractor: Life Technologies Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2019-06-26

End Date: 2021-07-08

Contract Duration: 743 days

Daily Burn Rate: $173/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LIFE TECHNOLOGIES:1106873 [19-011119]

Place of Performance

Location: GRAND ISLAND, ERIE County, NEW YORK, 14072

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $128,718.6 to LIFE TECHNOLOGIES CORPORATION for work described as: LIFE TECHNOLOGIES:1106873 [19-011119] Key points: 1. Contract awarded for chemical products, with a substantial portion falling under a broad manufacturing category. 2. The contract duration of 743 days suggests a medium-term need for these supplies. 3. Awarded as a Purchase Order, indicating a transactional, rather than a long-term service, agreement. 4. The firm fixed-price contract type offers cost certainty for the government. 5. The contract was competed under SAP (Small Acquisition Program), suggesting it was likely a smaller value procurement initially or within a specific acquisition framework. 6. The supplier, Life Technologies Corporation, is a key player in this sector.

Value Assessment

Rating: fair

The total award amount of $128.7 million for chemical products requires further benchmarking against similar NIH procurements for 'All Other Miscellaneous Chemical Product and Preparation Manufacturing'. Without specific product details, a precise value-for-money assessment is challenging. However, the firm fixed-price nature provides a degree of cost control. The contract was competed under SAP, which may indicate a focus on efficiency for smaller acquisitions, but it's important to ensure competitive pricing was achieved within that framework.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Small Acquisition Program). While this indicates competition, the specific details of the bidding process, including the number of bidders and the extent of outreach, are not fully detailed in the provided data. Competition under SAP is generally intended to streamline the acquisition process for smaller dollar values, but it's crucial that a sufficient number of qualified bidders were involved to ensure fair market pricing and prevent potential price inflation.

Taxpayer Impact: Competition under SAP aims to balance efficiency with cost savings for taxpayers. Ensuring robust competition within this framework is vital to secure the best possible prices for the government and, by extension, the taxpayer.

Public Impact

The primary beneficiaries are likely researchers and laboratories within the National Institutes of Health (NIH) and potentially other federal agencies requiring specialized chemical products. The services delivered involve the provision of various chemical products essential for scientific research, diagnostics, and potentially other operational needs. The geographic impact is primarily centered around the facilities of the NIH, with potential distribution to other government research sites. Workforce implications are minimal, as this contract focuses on the supply of goods rather than services requiring significant labor engagement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific product details makes it difficult to assess if the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' category is being used appropriately or if it masks a more specialized, potentially higher-cost, procurement.
Competition under SAP, while efficient, may not always yield the most aggressive pricing compared to larger, more broadly advertised competitions.
The duration of the contract (743 days) could lead to price fluctuations if market conditions for raw materials change significantly over its term, despite the fixed-price nature.

Positive Signals

The firm fixed-price contract type provides budget certainty for the government, protecting against cost overruns.
The contract was competed, indicating an effort to obtain value through market mechanisms.
Life Technologies Corporation is a known entity in the life sciences supply chain, suggesting a level of reliability and expertise.

Sector Analysis

This contract falls within the chemical manufacturing sector, specifically 'All Other Miscellaneous Chemical Product and Preparation Manufacturing'. This broad category encompasses a wide array of chemical products not elsewhere classified, often including reagents, specialized compounds, and laboratory chemicals. The market for such products is diverse, with numerous suppliers ranging from large corporations to niche manufacturers. Benchmarking spending in this category is challenging due to its breadth, but it represents a critical supply chain component for scientific research and development across government agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor, Life Technologies Corporation, is likely a large business. Future analysis could explore if any subcontracting opportunities were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the National Institutes of Health (NIH). As a Purchase Order, it is a transactional instrument, and oversight would focus on timely delivery, adherence to specifications, and proper invoicing. Transparency is moderate, as the award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

NIH Research Grants
Federal Supply Schedule (FSS) for Laboratory Equipment and Services
Procurements for Scientific and Medical Equipment
Chemical and Chemical Product Manufacturing Contracts

Risk Flags

Broad NAICS code may obscure specific product costs and value.
Competition under SAP might limit price discovery compared to full and open competition.
Contract duration could expose government to above-market rates if input costs decrease.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $128,718.6 to LIFE TECHNOLOGIES CORPORATION. LIFE TECHNOLOGIES:1106873 [19-011119]

Who is the contractor on this award?

The obligated recipient is LIFE TECHNOLOGIES CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $128,718.6.

What is the period of performance?

Start: 2019-06-26. End: 2021-07-08.

What specific types of chemical products were procured under this contract, and how do they align with NIH's research priorities?

The provided data categorizes the procurement under 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' (ND: 325998). This is a broad classification that includes a wide range of chemical products not specified elsewhere. Without more granular detail, it is difficult to pinpoint the exact nature of the chemicals. However, given the awarding agency is the National Institutes of Health (NIH), it is highly probable that these products are related to biomedical research, diagnostics, or laboratory operations. Examples could include reagents, buffers, cell culture media, or specialized chemical compounds used in experiments. To fully understand the alignment with NIH's research priorities, a review of the specific line items within the purchase order or associated documentation would be necessary.

How does the $128.7 million award compare to historical spending by NIH on similar chemical products?

Comparing the $128.7 million award to historical NIH spending on similar chemical products requires access to historical procurement data and a more precise definition of the product category than 'All Other Miscellaneous Chemical Product and Preparation Manufacturing'. If we assume this represents a significant portion of NIH's annual spend on such items, it indicates a substantial requirement. To perform a direct comparison, one would need to filter historical NIH contracts for the same or similar NAICS codes (325998) and potentially specific Product Service Codes (PSCs) if available. Analyzing trends over several fiscal years would reveal whether this award represents an increase, decrease, or stable level of spending for these types of chemical supplies.

What is the track record of Life Technologies Corporation in fulfilling government contracts, particularly with the Department of Health and Human Services?

Life Technologies Corporation, now part of Thermo Fisher Scientific, has a significant history of supplying products and services to government agencies, including the Department of Health and Human Services (HHS). Their track record generally involves providing a wide array of laboratory equipment, consumables, and reagents crucial for scientific research. While specific performance metrics for this particular $128.7 million purchase order are not detailed here, the company is a well-established entity in the life sciences sector. Government contract databases (like FPDS) would provide more detailed information on past performance, including on-time delivery rates, quality of goods, and any past performance issues or awards received by the contractor for HHS and other agencies.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

For a firm fixed-price (FFP) contract of $128.7 million spanning 743 days (approximately two years), several risks exist. Firstly, if the cost of raw materials or manufacturing processes increases significantly during the contract period, the contractor may face reduced profit margins or even losses, potentially impacting their ability or willingness to fulfill the contract diligently. Conversely, if market prices for the chemicals decrease substantially, the government might be paying above-market rates for the latter part of the contract, although the FFP structure aims to prevent this by locking in the price. Another risk is contractor performance; if the contractor encounters unforeseen production issues or quality control problems, the fixed price might not adequately cover the costs associated with rectifying these issues, potentially leading to delays or disputes. The government bears the risk of price increases, while the contractor bears the risk of cost overruns.

How does competition under SAP (Small Acquisition Program) typically influence pricing and value for money compared to full and open competition?

Competition under SAP is designed for acquisitions below certain thresholds (e.g., simplified acquisition procedures often apply to procurements under $250,000, though SAP can encompass various frameworks). Its primary goal is efficiency and speed. While it mandates competition, the number of bidders might be smaller, and the outreach less extensive than under full and open competition. This can sometimes lead to less aggressive pricing compared to scenarios where a large number of diverse vendors compete. However, for specific niche products or when dealing with established contract vehicles, SAP can still yield good value. The key determinant of value for money under SAP is ensuring that the competition conducted, even if limited in scope, involves sufficiently qualified bidders to drive competitive pricing and that the selected vendor offers the best overall value considering price, quality, and delivery.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: NIHCCCCMD1901119

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3175 STALEY RD, GRAND ISLAND, NY, 14072

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

Financial Breakdown

Contract Ceiling: $128,719

Exercised Options: $128,719

Current Obligation: $128,719

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline