HHS Awards $12.5M Contract for ADAPT CRO Support Services to Tempus AI, Inc

Contract Overview

Contract Amount: $12,554,590 ($12.6M)

Contractor: Tempus AI, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-09-18

End Date: 2030-09-17

Contract Duration: 1,825 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: TIME AND MATERIALS

Sector: R&D

Official Description: ADAPT CRO SUPPORT SERVICES SOLICITATION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $12.6 million to TEMPUS AI, INC for work described as: ADAPT CRO SUPPORT SERVICES SOLICITATION Key points: 1. Contract awarded for R&D support services, a critical area for NIH. 2. Tempus AI, Inc. is the sole awardee, raising questions about competition. 3. The contract's Time and Materials pricing structure may pose cost control risks. 4. The R&D sector is highly competitive, making sole-source awards notable.

Value Assessment

Rating: fair

The contract is a definitive contract with a Time and Materials (T&M) pricing type. T&M contracts can be less predictable in final cost compared to fixed-price contracts, especially for R&D services where scope can evolve. Benchmarking is difficult without specific task orders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The solicitation was advertised as Full and Open Competition, indicating an intent to solicit from all responsible sources. However, only one awardee, Tempus AI, Inc., was selected. This suggests either limited market response or a highly specialized capability required.

Taxpayer Impact: The total value of $12.5M over five years represents a significant investment in R&D support. The T&M pricing necessitates careful monitoring to ensure taxpayer funds are used efficiently and effectively.

Public Impact

Advancement of critical research and development projects within NIH. Potential for innovation in physical, engineering, and life sciences. Ensuring the availability of specialized support services for scientific endeavors. Impact on the competitive landscape for CRO support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing.
Limited visibility into the specific R&D tasks to be performed.
Lack of demonstrated competition for this specific award.

Positive Signals

Supports critical R&D mission of NIH.
Awarded under Full and Open Competition.
Long-term contract provides stability for support services.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541715. This sector often involves high levels of innovation and specialized expertise. Spending benchmarks for similar R&D support services can vary widely based on the specific scientific domain and complexity.

Small Business Impact

The contract does not indicate any specific set-asides for small businesses. Given the nature of the services and the awardee, it is unlikely that small businesses were primary participants in this specific award, though they may be subcontractors.

Oversight & Accountability

The Department of Health and Human Services, through the National Institutes of Health, is responsible for oversight. The use of a definitive contract with T&M pricing requires diligent monitoring of labor hours and costs to ensure accountability and prevent waste.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited competition observed for this specific award.
Lack of small business participation noted.
Scope definition for R&D support can be challenging.
Contract duration extends over multiple fiscal years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $12.6 million to TEMPUS AI, INC. ADAPT CRO SUPPORT SERVICES SOLICITATION

Who is the contractor on this award?

The obligated recipient is TEMPUS AI, 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 $12.6 million.

What is the period of performance?

Start: 2025-09-18. End: 2030-09-17.

What specific R&D projects will Tempus AI, Inc. support, and how does their proposed approach align with NIH's strategic research goals?

The solicitation details are limited, but the contract is for 'ADAPT CRO Support Services.' This implies support for Clinical Research Organization (CRO) functions, likely involving data management, analysis, and potentially operational support for clinical trials. The alignment with NIH's strategic goals would depend on the specific research areas funded and prioritized by the relevant NIH institutes.

Given the Time and Materials pricing, what mechanisms are in place to control costs and prevent scope creep, especially in a dynamic R&D environment?

Contracts using Time and Materials pricing typically rely on established labor categories with pre-negotiated hourly rates and ceilings on total contract value. Effective oversight involves rigorous tracking of hours worked, regular reviews of progress against milestones, and clear communication channels to manage any potential changes in scope. The Contracting Officer's Representative (COR) plays a crucial role in monitoring performance and costs.

How will the effectiveness of the ADAPT CRO support services be measured to ensure optimal value for taxpayer investment in R&D?

Effectiveness will likely be measured through performance metrics defined in the contract, such as timeliness of data delivery, accuracy of analysis, adherence to protocols, and overall contribution to research milestones. Regular performance reviews between NIH and Tempus AI, Inc. will assess progress and identify areas for improvement, ensuring the services contribute meaningfully to the advancement of scientific knowledge.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75N99225R00005

Offers Received: 6

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 600 W CHICAGO AVE STE 510, CHICAGO, IL, 60654

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

Financial Breakdown

Contract Ceiling: $59,245,599

Exercised Options: $12,554,590

Current Obligation: $12,554,590

Actual Outlays: $740,482

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline