DoD's $24.6M Biotech R&D Contract with Peregrine Pharmaceuticals Raises Questions on Value and Effectiveness
Contract Overview
Contract Amount: $24,633,972 ($24.6M)
Contractor: Peregrine Pharmaceuticals, Inc.
Awarding Agency: Department of Defense
Start Date: 2008-06-30
End Date: 2012-09-15
Contract Duration: 1,538 days
Daily Burn Rate: $16.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: BASE PERIOD
Place of Performance
Location: TUSTIN, ORANGE County, CALIFORNIA, 92780
Plain-Language Summary
Department of Defense obligated $24.6 million to PEREGRINE PHARMACEUTICALS, INC. for work described as: BASE PERIOD Key points: 1. The contract awarded to Peregrine Pharmaceuticals for R&D in Biotechnology represents a significant investment. 2. Full and open competition was utilized, suggesting an effort to secure competitive pricing. 3. The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed carefully. 4. The biotechnology sector is critical for defense, but requires stringent oversight for R&D effectiveness.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure for a $24.6M contract warrants scrutiny. Without detailed performance metrics and cost breakdowns, it's difficult to assess if the fixed fee adequately incentivized efficiency or if the government is bearing undue risk for potential cost escalations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive indicator for price discovery. However, the CPFF structure may limit the direct impact of competition on final cost containment.
Taxpayer Impact: The use of taxpayer funds for R&D requires clear demonstration of value and successful outcomes to justify the investment.
Public Impact
Taxpayers fund critical research and development in biotechnology, aiming for advancements in defense capabilities. The contract's success hinges on the effective application of funds towards tangible research outcomes. Oversight is crucial to ensure the $24.6M investment yields the intended technological or strategic benefits for national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure
- Long contract duration
- Lack of specific performance metrics in provided data
Positive Signals
- Full and open competition
- Focus on critical R&D sector
Sector Analysis
This contract falls within the Research and Development in Biotechnology sector, a high-risk, high-reward area crucial for national security. Benchmarks for R&D contracts vary widely based on project scope and innovation potential.
Small Business Impact
The provided data does not indicate any specific set-asides or participation from small businesses in this contract. Further analysis would be needed to determine the extent of small business involvement.
Oversight & Accountability
The effectiveness of oversight for this Cost Plus Fixed Fee contract is critical. Regular audits, performance reviews, and strict adherence to contract terms are necessary to ensure accountability and prevent cost overruns.
Related Government Programs
- Research and Development in Biotechnology
- Department of Defense Contracting
- Defense Threat Reduction Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Difficulty in measuring R&D effectiveness
- Long contract duration may outpace technological relevance
- Lack of small business participation noted
Tags
research-and-development-in-biotechnolog, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.6 million to PEREGRINE PHARMACEUTICALS, INC.. BASE PERIOD
Who is the contractor on this award?
The obligated recipient is PEREGRINE PHARMACEUTICALS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Threat Reduction Agency).
What is the total obligated amount?
The obligated amount is $24.6 million.
What is the period of performance?
Start: 2008-06-30. End: 2012-09-15.
What specific research milestones and deliverables were defined in the contract, and how was their achievement measured to ensure value for money?
The provided data lacks specifics on research milestones and deliverables. A thorough review of the contract's statement of work and performance metrics is necessary to assess value. Without this, it's difficult to determine if the $24.6M investment yielded the expected scientific or technological advancements for the Department of Defense.
Given the Cost Plus Fixed Fee structure, what mechanisms were in place to mitigate the risk of cost overruns and ensure efficient use of funds?
Cost Plus Fixed Fee contracts inherently shift some cost risk to the government. Mitigation strategies would typically include robust government oversight, detailed cost tracking, defined ceilings, and clear criteria for allowable costs. The effectiveness of these mechanisms would depend on the diligence of the contracting officer and the contractor's adherence to financial controls.
How was the effectiveness of the biotechnology research conducted under this contract ultimately evaluated by the Defense Threat Reduction Agency?
Evaluating the effectiveness of R&D, especially in biotechnology, can be complex and long-term. The agency likely assessed effectiveness through interim reports, peer reviews, prototype demonstrations, and ultimately, the potential for the research to translate into deployable defense capabilities or threat reduction strategies.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology
Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 14282 FRANKLIN AVE, TUSTIN, CA, 92780
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $35,028,565
Exercised Options: $24,825,450
Current Obligation: $24,633,972
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-06-30
Current End Date: 2012-09-15
Potential End Date: 2012-09-15 00:00:00
Last Modified: 2019-06-10
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