HHS awards $24.86M for scalable COVID-19 test, accelerating diagnostics through RADx program

Contract Overview

Contract Amount: $24,860,014 ($24.9M)

Contractor: Mesa Biotech Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-07-30

End Date: 2024-05-04

Contract Duration: 1,374 days

Daily Burn Rate: $18.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EASY TO USE, LOW-COST MOLECULAR-BASED SARS-COV-2 TEST, HIGHLY SCALABLE RAPID ACCELERATION OF DIAGNOSTICS (RADX) PROGRAM: TECH PROJECT #2244 MESA BIOTECH, INC.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24.9 million to MESA BIOTECH INC for work described as: EASY TO USE, LOW-COST MOLECULAR-BASED SARS-COV-2 TEST, HIGHLY SCALABLE RAPID ACCELERATION OF DIAGNOSTICS (RADX) PROGRAM: TECH PROJECT #2244 MESA BIOTECH, INC. Key points: 1. Contract supports the rapid acceleration of diagnostics (RADx) program for COVID-19 testing. 2. Focus on a molecular-based test with high scalability and ease of use. 3. Funding allocated to Mesa Biotech, Inc. for development and potential deployment. 4. Contract duration extends over several years, indicating a long-term project. 5. The 'Not Competed' award raises questions about the procurement process and potential alternatives. 6. Firm Fixed Price contract type suggests defined costs and scope. 7. The award falls under Analytical Laboratory Instrument Manufacturing, a niche sector.

Value Assessment

Rating: fair

The contract value of $24.86 million for a molecular-based SARS-CoV-2 test appears substantial, but without direct comparable contracts for similar RADx-funded projects, a precise value-for-money assessment is challenging. The firm fixed-price nature suggests cost certainty for the government. However, the lack of competition means there was no market pressure to drive down prices, potentially leading to a less optimal price than if multiple vendors had bid.

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 often used in urgent situations or when a specific technology or contractor is deemed uniquely capable. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through a competitive bidding process.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The government did not leverage market forces to ensure cost-effectiveness.

Public Impact

The primary beneficiaries are public health initiatives aimed at combating the COVID-19 pandemic. The contract facilitates the development and scaling of a crucial diagnostic tool. Geographic impact is national, supporting the broader U.S. public health infrastructure. Workforce implications may include jobs in manufacturing, research, and development at Mesa Biotech and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in higher costs for taxpayers.
Sole-source awards can limit innovation by not exploring alternative solutions.
The long contract duration could pose risks if the technology becomes obsolete or less effective.

Positive Signals

Supports a critical public health program (RADx) for pandemic response.
Focus on a scalable, easy-to-use diagnostic test addresses a key need.
Firm fixed-price contract provides cost predictability.

Sector Analysis

This contract falls within the Analytical Laboratory Instrument Manufacturing sector, a specialized area focused on producing equipment for scientific analysis. The market for diagnostic testing, particularly for infectious diseases like SARS-CoV-2, has seen significant growth and investment, especially since 2020. The RADx program itself represents a substantial government initiative to accelerate the development and deployment of innovative diagnostic technologies, indicating a strategic focus on this sector.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, and opportunities for small business participation would depend on Mesa Biotech's own procurement practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and its relevant agencies, such as the National Institutes of Health (NIH). Transparency is facilitated through contract databases like FPDS. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified goods or services. Further oversight may be provided by the HHS Office of Inspector General.

Related Government Programs

National Institutes of Health (NIH) Contracts
Department of Health and Human Services (HHS) Procurement
COVID-19 Diagnostic Development Programs
Rapid Acceleration of Diagnostics (RADx) Initiative

Risk Flags

Sole-source award limits competition and potential cost savings.
Contract duration is long, posing a risk of technology obsolescence.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.9 million to MESA BIOTECH INC. EASY TO USE, LOW-COST MOLECULAR-BASED SARS-COV-2 TEST, HIGHLY SCALABLE RAPID ACCELERATION OF DIAGNOSTICS (RADX) PROGRAM: TECH PROJECT #2244 MESA BIOTECH, INC.

Who is the contractor on this award?

The obligated recipient is MESA BIOTECH 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 $24.9 million.

What is the period of performance?

Start: 2020-07-30. End: 2024-05-04.

What is the specific technology being developed by Mesa Biotech, Inc. under this contract, and what makes it suitable for the RADx program?

The contract data indicates the development of a 'EASY TO USE, LOW-COST MOLECULAR-BASED SARS-COV-2 TEST'. The suitability for the RADx program likely stems from its potential for high scalability and ease of use, which are critical factors for widespread diagnostic testing during a pandemic. Molecular-based tests are generally known for their high accuracy and sensitivity. The RADx program specifically aimed to accelerate the development, validation, and manufacturing of innovative diagnostic tests that could be rapidly deployed across the nation, suggesting Mesa Biotech's technology met these criteria for speed, scale, and performance.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when a specific product or service is required and only one responsible source can provide it. For the RADx program, this could be due to Mesa Biotech possessing unique intellectual property, a highly advanced prototype, or critical manufacturing capabilities that were essential for rapid deployment. The urgency of the COVID-19 pandemic may have also necessitated a faster procurement path, bypassing the standard competitive process to expedite the availability of testing solutions. Without further documentation from HHS, the precise justification remains speculative but likely centers on unique capabilities and program urgency.

How does the $24.86 million award compare to other investments made by the RADx program in similar diagnostic technologies?

Comparing this $24.86 million award to other RADx investments requires access to a comprehensive database of RADx contracts. However, the RADx program involved significant funding across various technology types, including molecular, antigen, and antibody tests, as well as different development stages from early research to large-scale manufacturing. Awards varied widely, with some contracts for early-stage development being in the millions, while others for scaling manufacturing could reach tens or even hundreds of millions. This $24.86 million award appears to be a substantial investment, likely supporting later-stage development, validation, and initial manufacturing scale-up for Mesa Biotech's specific technology.

What are the potential risks associated with a firm fixed-price contract for a developing technology?

While firm fixed-price (FFP) contracts offer cost certainty to the government, they can pose risks when applied to developing technologies. If the contractor, Mesa Biotech, encounters unforeseen technical challenges or cost overruns during development, they bear the financial burden. This could potentially lead to delays, reduced quality, or even project abandonment if the costs become unmanageable. Conversely, if the development proceeds more smoothly and cheaply than anticipated, the contractor may realize higher profit margins. The risk is shifted to the contractor, which can incentivize efficiency but also carries the potential for negative outcomes if development proves more complex than initially assessed.

What is Mesa Biotech's track record in developing and manufacturing diagnostic tests prior to this award?

Information regarding Mesa Biotech's specific track record prior to this significant HHS award is crucial for a complete assessment. While the contract itself signifies a level of confidence from the NIH, understanding their history with similar molecular diagnostic tests, their manufacturing capacity, and their success in navigating regulatory pathways (like FDA approval) would provide further context. A review of their previous contracts, product launches, and any public financial information would illuminate their experience and capability in delivering on this substantial award.

What are the performance metrics or milestones associated with this contract, and how will they be measured?

The provided data does not detail specific performance metrics or milestones for this contract. Typically, such contracts, especially those involving technology development and acceleration, would include defined deliverables, timelines, and quality standards. These could range from achieving specific testing sensitivity and specificity thresholds, demonstrating manufacturing yield targets, to successful completion of clinical validation studies. The government (NIH) would monitor progress against these milestones to ensure the contractor is meeting the contract's objectives and to justify continued funding. Without access to the contract's statement of work, these specifics remain unknown.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mesa Biotech, Inc.

Address: 6190 CORNERSTONE CT E, SAN DIEGO, CA, 92121

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

Financial Breakdown

Contract Ceiling: $24,860,014

Exercised Options: $24,860,014

Current Obligation: $24,860,014

Actual Outlays: $24,860,014

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline