NIH awarded $38.2M to Argos Therapeutics for HIV vaccine R&D over 12 years

Contract Overview

Contract Amount: $38,221,145 ($38.2M)

Contractor: Argos Therapeutics, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-09-30

End Date: 2018-07-31

Contract Duration: 4,322 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TAS::75 0885::TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27704

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $38.2 million to ARGOS THERAPEUTICS, INC. for work described as: TAS::75 0885::TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B Key points: 1. Contract duration of over 12 years suggests a long-term research commitment. 2. The award represents a significant investment in a specific area of biomedical research. 3. The cost-plus-fixed-fee structure indicates potential for cost overruns, requiring close monitoring. 4. The contract's extensive timeline may reflect the inherent uncertainties and complexities of vaccine development. 5. Research and Development in Life Sciences is a critical but often high-risk sector for federal investment.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its long duration and specialized R&D nature. The total award of $38.2 million over 12 years averages to approximately $3.18 million per year. Without comparable contracts for similar HIV vaccine design and development teams, assessing value for money is difficult. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can be appropriate for R&D where costs are uncertain, but it also carries a risk of cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 12 bidders (no) suggests a competitive environment for this research area. However, the long duration and specific nature of the R&D may have narrowed the pool of highly qualified and specialized entities.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation. The 12 bidders indicate that taxpayer funds were sought from a range of potential providers.

Public Impact

The primary beneficiaries are expected to be individuals at risk of HIV infection, through the potential development of a vaccine. The contract supports the advancement of scientific knowledge and technological capabilities in vaccine design and development. Geographic impact is likely concentrated around research institutions and potentially clinical trial sites, though the ultimate benefit is global. Workforce implications include employment for scientists, researchers, technicians, and administrative staff involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 12 years) increases the risk of scope creep or shifts in research priorities.
Cost-plus-fixed-fee contract type can lead to higher costs if not managed diligently.
The specialized nature of vaccine R&D means that success is not guaranteed, posing a risk to the investment.
Potential for contractor performance issues over such an extended period.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
The significant investment indicates a commitment to addressing a critical public health need (HIV vaccine).
The long duration may be necessary for the complex and iterative nature of vaccine development.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on life sciences and biomedical research. The market for vaccine development is highly specialized, involving a mix of academic institutions, government research labs, and private biotechnology firms. Federal spending in this area is crucial for addressing public health challenges like HIV, often involving long-term, high-risk investments where private funding may be insufficient due to the extended timelines and uncertain outcomes.

Small Business Impact

There is no indication that this contract involved small business set-asides (ss: false, sb: false). Given the specialized nature of vaccine research and development, it is common for such contracts to be awarded to larger, established research organizations or companies with proven capabilities. Subcontracting opportunities for small businesses might exist in supporting roles, but the primary awardee is unlikely to be a small business.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Institutes of Health (NIH), a component of the Department of Health and Human Services (HHS). Mechanisms would include regular progress reports, financial reviews, and potentially site visits to monitor research activities and expenditures. The Inspector General of HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to the contract. Transparency is generally maintained through public reporting of research outcomes and contract awards.

Related Government Programs

National Institutes of Health Research Grants
Centers for Disease Control and Prevention (CDC) HIV Programs
Biomedical Advanced Research and Development Authority (BARDA) Contracts
Department of Defense HIV Research Programs

Risk Flags

Long contract duration
Cost-plus-fixed-fee contract type
Contractor ceased operations shortly after contract end date
Uncertainty inherent in R&D projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $38.2 million to ARGOS THERAPEUTICS, INC.. TAS::75 0885::TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B

Who is the contractor on this award?

The obligated recipient is ARGOS THERAPEUTICS, 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 $38.2 million.

What is the period of performance?

Start: 2006-09-30. End: 2018-07-31.

What was the specific scientific objective of the 'TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B' contract?

The contract, 'TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B,' awarded to Argos Therapeutics, Inc., aimed to support the design and development of potential HIV vaccines. While the specific 'Part B' designation suggests a continuation or a specific phase of a larger program, the core objective was to advance the scientific understanding and technological approaches necessary for creating an effective HIV vaccine. This likely involved research into immunogens, delivery systems, adjuvant strategies, and preclinical testing to assess safety and efficacy. The long duration and substantial funding indicate a focus on foundational research and early-stage development rather than a near-term product launch.

How does the $38.2 million award compare to typical federal spending on HIV vaccine R&D?

The $38.2 million awarded over approximately 12 years represents a significant, albeit not unprecedented, investment in a specific HIV vaccine R&D project. Federal agencies like the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC) collectively invest billions annually in HIV/AIDS research, encompassing prevention, treatment, and vaccine development. Individual contracts for early-stage R&D can range from a few million to tens of millions of dollars, depending on the scope, duration, and complexity. This particular award appears to be a substantial commitment to a specific research team or approach, reflecting the high priority placed on developing an HIV vaccine.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for long-term R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for long-term R&D, like the one awarded to Argos Therapeutics, include potential cost overruns and a reduced incentive for the contractor to control expenses. In a CPFF structure, the government reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. If the R&D proves more complex or expensive than initially estimated, the government bears the increased cost, although the fee remains fixed. This necessitates robust oversight to ensure costs are reasonable and allocable. For long-term projects, there's also a risk that the fixed fee may become disproportionately high or low relative to the effort expended if initial estimates were significantly off.

What was the track record of Argos Therapeutics, Inc. regarding HIV vaccine development prior to or during this contract?

Argos Therapeutics, Inc. was a biopharmaceutical company focused on developing immunotherapies, including a therapeutic vaccine for HIV called AGS-003. Prior to and during the period of this contract (which ended in 2018), Argos was actively engaged in clinical trials for AGS-003. However, the company faced significant challenges. In 2018, the same year this contract ended, Argos announced it was ceasing operations due to difficulties in securing additional funding and challenges in demonstrating sufficient clinical efficacy for its lead product. Therefore, while they were actively pursuing HIV vaccine development, their ultimate success in bringing a product to market was not achieved.

How did the competition level (12 bidders) influence the outcome and potential value for this specialized R&D contract?

Having 12 bidders for a specialized R&D contract suggests a healthy level of initial interest and competition in the field of HIV vaccine development. This broad competition likely drove down initial proposed costs and encouraged innovative approaches from the participating entities. For the government, a larger pool of bidders increases the probability of identifying a contractor with the most suitable technical capabilities and cost-effective approach. While the ultimate selection depends on a complex evaluation of technical merit, past performance, and cost, the initial competitive landscape is a positive indicator for achieving good value and ensuring that taxpayer funds are directed towards the most promising research avenues.

What were the key performance indicators or milestones expected under this contract?

Specific key performance indicators (KPIs) and milestones for a contract titled 'TAS HIV VACCINE DESIGN AND DEVELOPMENT TEAMS PART B' would typically revolve around scientific progress and deliverables. These could include the successful design of novel immunogens, demonstration of desired immune responses in preclinical models, development and validation of assays, completion of specific research phases within defined timelines, and submission of regular technical reports detailing findings, challenges, and next steps. For a long-term R&D contract, milestones might be phased, with initial goals focusing on proof-of-concept and later stages progressing towards candidate selection and preclinical safety/efficacy studies. Adherence to budget and timely reporting would also be implicit performance expectations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 12

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4233 TECHNOLOGY DR, DURHAM, NC, 27704

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $38,221,145

Exercised Options: $38,221,145

Current Obligation: $38,221,145

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline