NIH awards Alchem Laboratories $2.8M for compound synthesis, continuing critical research support

Contract Overview

Contract Amount: $2,823,027 ($2.8M)

Contractor: Alchem Laboratories Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-20

End Date: 2026-09-19

Contract Duration: 1,825 days

Daily Burn Rate: $1.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: SYNTHESIS OF UP TO TEN SAMPLE COMPOUNDS PER YEAR (CONTINUITY FOR 66C)

Place of Performance

Location: ALACHUA, ALACHUA County, FLORIDA, 32615

State: Florida Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.8 million to ALCHEM LABORATORIES CORPORATION for work described as: SYNTHESIS OF UP TO TEN SAMPLE COMPOUNDS PER YEAR (CONTINUITY FOR 66C) Key points: 1. The contract supports the synthesis of up to ten sample compounds annually, crucial for ongoing research. 2. Alchem Laboratories Corporation is the awardee, with the contract valued at $2,823,027. 3. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 4. This award falls under Pharmaceutical Preparation Manufacturing, a specialized sector.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee structure allows for flexibility but can lead to higher costs compared to fixed-price contracts if not managed carefully. Benchmarking against similar synthesis contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a limited competition. This method may not have yielded the most competitive pricing.

Taxpayer Impact: Taxpayer funds are being used for specialized compound synthesis, essential for NIH research, but the limited competition raises questions about optimal price discovery.

Public Impact

Supports critical pharmaceutical research and development at the National Institutes of Health. Ensures continuity of supply for essential synthesized compounds for scientific studies. Potential for increased costs due to the Cost Plus Fixed Fee contract type.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Limited competition after exclusion of sources

Positive Signals

Continuity of essential research support
Award to a specific corporation for specialized services

Sector Analysis

The contract is within the Pharmaceutical Preparation Manufacturing sector, which involves specialized chemical synthesis. Spending benchmarks for this niche area are highly variable and depend on compound complexity and scale.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Further analysis would be needed to assess small business participation.

Oversight & Accountability

The contract is a Delivery Order under a larger agreement, implying some level of prior vetting. However, the Cost Plus Fixed Fee structure necessitates robust oversight to manage costs and ensure value.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Cost Plus Fixed Fee contract type may lead to higher costs.
Limited competition could result in suboptimal pricing.
Lack of transparency on specific cost components.
Potential for scope creep if research needs evolve.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.8 million to ALCHEM LABORATORIES CORPORATION. SYNTHESIS OF UP TO TEN SAMPLE COMPOUNDS PER YEAR (CONTINUITY FOR 66C)

Who is the contractor on this award?

The obligated recipient is ALCHEM LABORATORIES 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 $2.8 million.

What is the period of performance?

Start: 2021-09-20. End: 2026-09-19.

What is the specific value proposition of Alchem Laboratories Corporation for this compound synthesis contract?

Alchem Laboratories Corporation is likely selected for its specialized expertise and established capabilities in synthesizing complex compounds required by the NIH. The value lies in their ability to provide consistent, high-quality synthesis crucial for ongoing research continuity, potentially involving proprietary methods or specific equipment.

What are the primary risks associated with the Cost Plus Fixed Fee contract type in this context?

The primary risks of a Cost Plus Fixed Fee contract include potential cost overruns if the contractor's actual costs exceed estimates significantly, and reduced incentive for the contractor to control expenses. This necessitates strong government oversight to monitor costs and ensure the fixed fee remains reasonable.

How effective is the 'limited competition after exclusion of sources' approach in ensuring optimal pricing for pharmaceutical synthesis?

This approach can be effective if the excluded sources were genuinely not capable or available, and the remaining competition is robust. However, it inherently limits the pool of potential bidders, potentially leading to higher prices than a truly open competition. Effectiveness hinges on the justification for source exclusion and the competitiveness of the remaining bidders.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HHSN201700007I G-30

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 13305 RACHAEL BLVD, ALACHUA, FL, 32615

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

Financial Breakdown

Contract Ceiling: $3,171,368

Exercised Options: $2,823,027

Current Obligation: $2,823,027

Actual Outlays: $2,307,065

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSN261201700007I

IDV Type: IDC

Timeline