HHS awarded $1.54M for pharmaceutical preparations, with limited competition and a short performance period

Contract Overview

Contract Amount: $154,000 ($154.0K)

Contractor: Advanced Accelerator Applications USA Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2019-10-01

End Date: 2019-12-31

Contract Duration: 91 days

Daily Burn Rate: $1.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ADVANCED ACCELERATOR APPLICATIONS USA, INC.:1308250 [20-000025]

Place of Performance

Location: MILLBURN, ESSEX County, NEW JERSEY, 07041

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $154,000 to ADVANCED ACCELERATOR APPLICATIONS USA INC for work described as: ADVANCED ACCELERATOR APPLICATIONS USA, INC.:1308250 [20-000025] Key points: 1. The contract value of $1.54 million is modest within the pharmaceutical sector. 2. Limited competition suggests potential for higher pricing than a fully competed contract. 3. The short duration (91 days) indicates a specific, immediate need rather than a long-term program. 4. The firm fixed-price contract type shifts risk to the contractor. 5. The contract falls under pharmaceutical preparation manufacturing, a specialized area. 6. The award was made to a single entity, raising questions about market reach.

Value Assessment

Rating: fair

Benchmarking the value of this $1.54 million contract is challenging without more specific details on the pharmaceutical preparations procured. However, the award to a single vendor under a limited competition framework suggests that the pricing may not have benefited from the full price discovery mechanisms of an open market. Compared to larger, multi-year contracts for similar pharmaceutical manufacturing, this award appears to be for a specific, short-term requirement. The firm fixed-price nature provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded on a limited competition basis, meaning that not all responsible sources were solicited. The data indicates only one offer was received and accepted. This level of competition limits the government's ability to ensure it is receiving the best possible price and value, as potential competitors were not given an opportunity to bid. The specific reasons for limiting competition are not detailed in the provided data.

Taxpayer Impact: Limited competition can lead to higher costs for taxpayers as it reduces the pressure on contractors to offer competitive pricing. This may result in the government paying more than it would in a fully open and competitive environment.

Public Impact

The primary beneficiaries are likely researchers or medical facilities within the National Institutes of Health (NIH) requiring specific pharmaceutical preparations. The services delivered involve the manufacturing of pharmaceutical preparations, crucial for medical research and development. The geographic impact is concentrated in New Jersey, where the contractor is located. Workforce implications are primarily within the specialized pharmaceutical manufacturing sector at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in suboptimal pricing for the government.
Short contract duration could indicate a reactive procurement rather than strategic planning.
Lack of detailed product specification makes value assessment difficult.
Reliance on a single vendor for specialized preparations could pose supply chain risks.

Positive Signals

Firm fixed-price contract type provides cost certainty and shifts performance risk to the contractor.
The contract supports critical pharmaceutical preparation needs for NIH.
The contractor is a specialized entity in pharmaceutical manufacturing.

Sector Analysis

The pharmaceutical preparation manufacturing sector is highly specialized, requiring significant R&D investment and adherence to strict regulatory standards. This contract falls within the broader healthcare and life sciences industry. Spending in this area by agencies like NIH is critical for advancing medical research and developing new treatments. Comparable spending benchmarks would typically involve analyzing other contracts for similar niche pharmaceutical manufacturing services, often characterized by high unit costs due to complexity and regulatory compliance.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information regarding subcontracting plans. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, as it was not targeted towards small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Institutes of Health (NIH), a division of the Department of Health and Human Services (HHS). As a purchase order, it is subject to standard procurement regulations and internal HHS oversight. Transparency is limited by the nature of the data provided, which does not detail the specific justifications for limited competition or the evaluation process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Pharmaceutical Manufacturing Contracts
Medical Research Supplies
NIH Procurement
HHS Contracts
Life Sciences R&D Support

Risk Flags

Limited Competition
Short Performance Period
Lack of Detailed Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $154,000 to ADVANCED ACCELERATOR APPLICATIONS USA INC. ADVANCED ACCELERATOR APPLICATIONS USA, INC.:1308250 [20-000025]

Who is the contractor on this award?

The obligated recipient is ADVANCED ACCELERATOR APPLICATIONS USA INC.

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 $154,000.

What is the period of performance?

Start: 2019-10-01. End: 2019-12-31.

What specific pharmaceutical preparations were procured under this contract, and what was their intended use?

The provided data identifies the North American Industry Classification System (NAICS) code as 325412, which corresponds to 'Pharmaceutical Preparation Manufacturing.' However, it does not specify the exact pharmaceutical preparations ordered or their precise intended use. Given the awarding agency is the National Institutes of Health (NIH), it is highly probable that these preparations were for research and development purposes, potentially for preclinical studies, clinical trials, or specialized laboratory experiments. Without further documentation, such as the contract statement of work or delivery orders, the specific nature and application of the pharmaceutical preparations remain undisclosed.

How does the $1.54 million contract value compare to typical NIH spending on pharmaceutical preparation manufacturing?

The $1.54 million contract value is relatively modest when compared to the overall spending of the National Institutes of Health (NIH) on pharmaceutical preparation manufacturing. NIH, as a leading biomedical research agency, often engages in larger, multi-year contracts for drug development, clinical trial supplies, and manufacturing of complex biological products. While $1.54 million is a significant sum for a single purchase order, it represents a small fraction of the agency's total budget dedicated to research and development. Benchmarking this specific award against other NIH contracts would require analyzing a broader dataset of pharmaceutical manufacturing procurements, considering factors like contract duration, quantity, and complexity of the preparations.

What are the potential risks associated with awarding this contract on a limited competition basis?

Awarding this contract on a limited competition basis carries several potential risks. Firstly, it significantly reduces the likelihood of achieving the best possible price for the government, as the competitive pressure to offer lower bids is absent. This could lead to overpayment compared to what might have been secured in a fully open market. Secondly, it limits the government's access to a wider pool of potential suppliers, potentially excluding innovative or more capable vendors. This can also create a perception of unfairness and may discourage future participation in government contracting. Lastly, without a robust competitive process, there's a heightened risk of vendor lock-in or reliance on a single source, which can be problematic if the vendor fails to perform or if market conditions change.

What is the significance of the 'Firm Fixed Price' contract type in this context?

The 'Firm Fixed Price' (FFP) contract type is significant because it places the primary responsibility for cost control and performance risk on the contractor, Advanced Accelerator Applications USA, Inc. Under an FFP agreement, the contractor agrees to a set price for the goods or services, regardless of the actual costs incurred. This provides the government, specifically the National Institutes of Health (NIH), with cost certainty and predictability. It incentivizes the contractor to manage its expenses efficiently to maximize profit. For the NIH, this means they know the total expenditure upfront, which is beneficial for budgeting and financial planning, especially for a contract with a short duration like this one.

How does the short contract duration (91 days) impact the assessment of this award?

The short contract duration of 91 days (approximately three months) suggests that this award was intended to fulfill a specific, immediate, and short-term requirement rather than a long-term program need. This could be for a particular research phase, a pilot project, or an urgent supply of specialized pharmaceutical preparations. From an assessment perspective, it limits the scope for evaluating long-term performance or the contractor's sustained capabilities. It also implies that the pricing and terms are specific to this brief period and may not be indicative of costs for longer-term engagements. The limited duration, coupled with limited competition, reinforces the idea that this was a targeted procurement for a well-defined, time-sensitive need.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 20000025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 57 E WILLOW ST, MILLBURN, NJ, 07041

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $154,000

Exercised Options: $154,000

Current Obligation: $154,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline