NIH awards $22.9M for cardiothoracic surgery research and training to Suburban Hospital, Inc

Contract Overview

Contract Amount: $22,934,858 ($22.9M)

Contractor: Suburban Hospital, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-30

End Date: 2012-10-31

Contract Duration: 2,588 days

Daily Burn Rate: $8.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Healthcare

Official Description: CARDIOTHORACIC SURGERY, RESEARCH, AND TRAINING PROGRAM

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20814

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22.9 million to SUBURBAN HOSPITAL, INC for work described as: CARDIOTHORACIC SURGERY, RESEARCH, AND TRAINING PROGRAM Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Long contract duration of over 7 years suggests a sustained need for services. 3. The contract type 'COST NO FEE' indicates reimbursement of allowable costs without additional profit. 4. The North American Industry Classification System (NAICS) code 622110 points to general medical and surgical hospitals. 5. The award was made to a single entity, raising questions about potential alternatives. 6. The contract value is substantial, indicating a significant investment in research and training.

Value Assessment

Rating: fair

The contract value of $22.9 million over approximately 7 years for cardiothoracic surgery research and training appears to be within a reasonable range for specialized medical services. However, without comparable sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. The 'COST NO FEE' contract type means the government reimburses the contractor for approved expenses, which can sometimes lead to less cost control compared to fixed-price contracts. Benchmarking against similar research and training programs, especially those awarded competitively, would provide a clearer picture of pricing efficiency.

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. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that potential cost savings that could arise from a competitive bidding process were not realized. It also limits the opportunity to explore innovative solutions or approaches from a wider range of providers.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also bypasses the opportunity to foster a broader base of contractors capable of performing such critical services.

Public Impact

Patients requiring advanced cardiothoracic surgical procedures benefit from ongoing research and training that improves care standards. Medical professionals, including surgeons and researchers, receive specialized training, enhancing the national pool of expertise. The program supports advancements in medical knowledge and techniques within the field of cardiothoracic surgery. The geographic impact is primarily centered around Suburban Hospital in Maryland, serving as a hub for this specialized activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Lack of detailed performance metrics in the provided data makes assessing effectiveness difficult.
The 'COST NO FEE' contract type may offer less incentive for cost efficiency compared to fixed-price contracts.

Positive Signals

Long-term funding supports sustained research and training, crucial for complex medical fields.
Focus on a specialized area like cardiothoracic surgery indicates a targeted investment in critical healthcare capabilities.
The contract is with a known entity (Suburban Hospital), suggesting a degree of established capability.

Sector Analysis

The healthcare sector, particularly the sub-sector of specialized medical services and research, is characterized by high costs, complex regulations, and a need for continuous innovation. Contracts for medical research and training are vital for advancing medical knowledge and ensuring a skilled workforce. This contract fits within the broader landscape of federal health spending aimed at improving public health outcomes and supporting medical advancements. Comparable spending benchmarks for similar research programs can vary widely based on the scope and duration.

Small Business Impact

There is no indication from the provided data that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large hospital, it is unlikely to have directly benefited the small business ecosystem. Further investigation into the contractor's subcontracting practices would be needed to determine any indirect impact.

Oversight & Accountability

Oversight for this contract would typically fall under the National Institutes of Health (NIH), a component of the Department of Health and Human Services (HHS). Specific oversight mechanisms would include regular reporting requirements from Suburban Hospital, financial audits, and programmatic reviews to ensure the research and training objectives are being met. The Inspector General of HHS would have jurisdiction for investigating any potential fraud, waste, or abuse related to the contract.

Related Government Programs

National Institutes of Health Research Grants
Medical Training Programs
Cardiovascular Disease Research
Hospital Services Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost inefficiencies ('COST NO FEE')

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.9 million to SUBURBAN HOSPITAL, INC. CARDIOTHORACIC SURGERY, RESEARCH, AND TRAINING PROGRAM

Who is the contractor on this award?

The obligated recipient is SUBURBAN HOSPITAL, 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 $22.9 million.

What is the period of performance?

Start: 2005-09-30. End: 2012-10-31.

What is the track record of Suburban Hospital, Inc. in managing federal research and training contracts?

Suburban Hospital, Inc. has a history of receiving federal funding, including contracts and grants, primarily through agencies like the National Institutes of Health (NIH). While specific details on past performance for this particular cardiothoracic surgery program are not fully elaborated in the provided data, its long-standing relationship with NIH suggests a capacity to manage complex medical research and training initiatives. Evaluating past performance would require a review of their project completion rates, adherence to timelines, budget management, and the scientific or clinical impact of previous federally funded research. Generally, hospitals of this size and affiliation often have established administrative and research infrastructure to support such endeavors, but a deeper dive into their specific contract history and any associated performance reviews would be necessary for a comprehensive assessment.

How does the $22.9 million contract value compare to similar cardiothoracic surgery research and training programs?

Benchmarking the $22.9 million contract value for cardiothoracic surgery research and training is complex due to the specialized nature of the services and the sole-source award. Typical federal contracts for research and training can range significantly based on scope, duration, and the specific research questions being addressed. For instance, large-scale, multi-year clinical trials or the establishment of major research centers can easily reach tens of millions of dollars. However, without knowing the precise deliverables, research objectives, and the number of trainees supported under this specific contract, direct comparisons are difficult. If this contract funds a significant portion of a hospital's cardiothoracic research infrastructure and training pipeline over seven years, the value might be considered reasonable. Conversely, if it represents a smaller, more focused initiative, it could be on the higher end. A competitive bidding process would have provided a clearer market-based valuation.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract stem from the lack of competition. Firstly, there's a risk of 'cost-plus' inefficiencies, where the 'COST NO FEE' structure might not incentivize the contractor to minimize expenses as rigorously as a fixed-price contract would. Secondly, without competitive proposals, there's a risk that the government is not receiving the best possible value or the most innovative solutions available in the market. Thirdly, a sole-source award can create a dependency on a single provider, potentially limiting future options or flexibility. Lastly, there's an inherent risk of potential price inflation compared to what might have been achieved through open competition. Ensuring robust oversight and clear performance metrics becomes crucial to mitigate these risks.

How effective is the 'COST NO FEE' contract type in achieving program goals for research and training?

The 'COST NO FEE' (CNF) contract type is primarily used when the scope of work is uncertain or when the contractor's costs are difficult to estimate in advance, often seen in research and development or certain types of services. For research and training programs, CNF allows the government to reimburse the contractor for all allowable, allocable, and reasonable costs incurred in performing the contract, without any additional profit margin. This can be beneficial in encouraging research where outcomes are unpredictable and ensuring that the full cost of necessary research activities is covered. However, it places a significant burden on the government to meticulously monitor and audit costs to prevent overruns or unnecessary expenditures. While it facilitates the pursuit of research objectives, its effectiveness in achieving cost efficiency is generally considered lower than fixed-price contracts, requiring strong government oversight to ensure value.

What are the historical spending patterns for cardiothoracic surgery research and training at NIH?

Historical spending patterns for cardiothoracic surgery research and training at the National Institutes of Health (NIH) reflect a consistent commitment to advancing cardiovascular health. NIH, through various institutes like the National Heart, Lung, and Blood Institute (NHLBI), allocates substantial funding towards research grants, clinical trials, and training programs aimed at understanding, preventing, and treating heart, lung, and blood diseases, which encompass cardiothoracic surgery. Annual spending can fluctuate based on congressional appropriations, emerging research priorities, and the number of grant applications received and funded. While specific aggregate figures for 'cardiothoracic surgery research and training' as a distinct category are not readily available without detailed database queries, overall NIH funding for cardiovascular research has historically been in the billions of dollars annually. This contract represents one component of that broader investment strategy.

What is the significance of the NAICS code 622110 (General Medical and Surgical Hospitals) for this contract?

The North American Industry Classification System (NAICS) code 622110 signifies that the primary business activity of the contractor, Suburban Hospital, Inc., falls under the category of General Medical and Surgical Hospitals. This classification is relevant because it indicates the type of facility and the core services it provides. For a contract focused on cardiothoracic surgery research and training, this NAICS code is appropriate as such specialized medical services and associated research are typically conducted within large, general medical and surgical hospital settings. It helps categorize the contract within the broader federal procurement landscape and provides context for the type of entity receiving the award and the nature of the work performed, aligning with the hospital's established infrastructure and expertise in patient care and medical research.

Industry Classification

NAICS: Health Care and Social Assistance › General Medical and Surgical Hospitals › General Medical and Surgical Hospitals

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: NHLBIHI0518

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 8600 OLD GEORGETOWN RD, BETHESDA, MD, 08

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

Financial Breakdown

Contract Ceiling: $40,457,858

Exercised Options: $40,457,858

Current Obligation: $22,934,858

Contract Characteristics

Multi-Year Contract: Yes

Timeline