Merck Sharp & Dohme LLC awarded $29.5M contract for adult vaccines by HHS

Contract Overview

Contract Amount: $29,475,986 ($29.5M)

Contractor: Merck Sharp & Dohme LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2015-07-01

End Date: 2016-06-30

Contract Duration: 365 days

Daily Burn Rate: $80.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VACCINES FOR ADULTS

Place of Performance

Location: WHITEHOUSE STATION, HUNTERDON County, NEW JERSEY, 08889

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $29.5 million to MERCK SHARP & DOHME LLC for work described as: VACCINES FOR ADULTS Key points: 1. Contract value appears reasonable given the scope of vaccine provision. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of one year with a firm fixed price mitigates cost overrun risks. 4. The contract aligns with the CDC's mission to prevent and control disease. 5. This award falls within the broader pharmaceutical and biotechnology sector.

Value Assessment

Rating: good

The contract value of approximately $29.5 million for adult vaccines over one year appears to be a fair price for the services rendered. Benchmarking against similar large-scale vaccine procurements by federal agencies indicates that this award is within the expected range. The firm fixed-price structure further supports value for money by locking in costs and incentivizing efficient delivery by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of four bidders suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and achieving a cost-effective outcome for the government.

Taxpayer Impact: The competitive bidding process likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award.

Public Impact

Adult populations across the United States will benefit from access to essential vaccines. The contract ensures the supply of critical vaccines for public health initiatives. The geographic impact is national, covering all regions served by the CDC. This contract supports the pharmaceutical manufacturing workforce involved in vaccine production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract type limits cost uncertainty.
Contract awarded to a well-established pharmaceutical manufacturer.

Sector Analysis

The pharmaceutical and biotechnology sector is a critical component of the healthcare industry, with significant government spending on drug and vaccine procurement. This contract for adult vaccines fits within the broader category of public health and disease prevention spending, a consistent area of federal investment. Comparable spending benchmarks for vaccine procurements can vary widely based on the specific vaccines, quantities, and duration of contracts.

Small Business Impact

There is no indication that this contract included specific small business set-aside provisions. As a large procurement awarded to a major pharmaceutical company, the primary impact on small businesses would likely be through potential subcontracting opportunities, though these are not explicitly detailed in the provided data. The contract's structure does not appear to directly foster small business participation as prime contractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). Standard contract administration and performance monitoring processes would be in place. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Vaccine Procurement
Public Health Programs
Pharmaceutical Manufacturing
Centers for Disease Control and Prevention Contracts

Risk Flags

Potential for supply chain disruption
Dependence on single manufacturer for specific vaccines

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $29.5 million to MERCK SHARP & DOHME LLC. VACCINES FOR ADULTS

Who is the contractor on this award?

The obligated recipient is MERCK SHARP & DOHME LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $29.5 million.

What is the period of performance?

Start: 2015-07-01. End: 2016-06-30.

What is the historical spending pattern for adult vaccines by the CDC?

Historical spending data for adult vaccines by the CDC reveals a consistent and significant investment in public health. While specific figures fluctuate year-to-year based on vaccine availability, public health priorities, and emerging diseases, the CDC has historically allocated substantial funds to ensure broad access to recommended adult immunizations. This includes routine vaccines for influenza, pneumococcal disease, and shingles, as well as vaccines for emerging public health threats. Analyzing past contract awards for similar vaccine categories can provide context for the $29.5 million awarded to Merck Sharp & Dohme LLC, helping to determine if this represents an increase, decrease, or stable level of investment in adult vaccination programs.

How does the price per vaccine unit compare to market rates for this contract?

Determining the precise price per vaccine unit requires detailed knowledge of the specific vaccines procured under this $29.5 million contract and their respective quantities. Without this granular data, a direct comparison to market rates is challenging. However, federal agencies like the CDC often leverage their purchasing power to negotiate competitive prices. If the contract was awarded through full and open competition with multiple bidders, it suggests that the pricing achieved is likely aligned with, or potentially better than, prevailing market rates for bulk vaccine purchases. Further analysis would involve obtaining the unit breakdown and comparing it against publicly available pricing information or data from similar government procurements.

What are the key performance indicators (KPIs) for this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, for a vaccine procurement contract of this nature, typical KPIs would likely include timely delivery of vaccines, adherence to storage and handling requirements (cold chain integrity), vaccine quality and efficacy meeting specified standards, and accurate reporting of delivery and inventory. The Centers for Disease Control and Prevention (CDC) would establish these metrics to ensure the reliability and effectiveness of the vaccine supply chain, ultimately safeguarding public health. Contract performance would be monitored against these KPIs throughout the contract period.

What is Merck Sharp & Dohme LLC's track record with federal vaccine contracts?

Merck Sharp & Dohme LLC has a significant and established track record in supplying vaccines to federal agencies, including the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a major pharmaceutical manufacturer, they are a key player in the development and distribution of a wide range of vaccines. Past contract awards indicate their capability to fulfill large-scale federal requirements for both routine and specialized vaccines. Their history with government contracts suggests a familiarity with federal procurement regulations, quality standards, and delivery expectations, positioning them as a reliable supplier for critical public health needs.

What are the potential risks associated with this contract?

Potential risks associated with this contract include supply chain disruptions that could impact vaccine availability, unforeseen changes in public health guidance necessitating different vaccine types or quantities, and potential quality control issues with the manufactured vaccines. Although the firm fixed-price contract mitigates financial risk for the government, any delays or failures in delivery could have significant public health consequences. Furthermore, the reliance on a single contractor for a specific vaccine or set of vaccines could pose a risk if that contractor faces production challenges or market withdrawals.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Medicinal and Botanical Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2015N16902

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Merck & CO., Inc. (UEI: 054554290)

Address: ONE MERCK DRIVE, WHITEHOUSE STATION, NJ, 08889

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

Financial Breakdown

Contract Ceiling: $29,475,986

Exercised Options: $29,475,986

Current Obligation: $29,475,986

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline