NIH awards $23.4M contract for pathology peer review and support to Charles River Laboratories

Contract Overview

Contract Amount: $23,409,714 ($23.4M)

Contractor: Charles River Laboratories, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2015-08-24

End Date: 2025-08-23

Contract Duration: 3,652 days

Daily Burn Rate: $6.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF PATHOLOGY PEER REVIEW&PATHOLOGY SUPPORT FOR DNTP&DIR AT NIEHS; CHARLES RIVER LABORATORIES (CRL) CONTRACT:HHSN273201500012C

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27703

State: North Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $23.4 million to CHARLES RIVER LABORATORIES, INC. for work described as: IGF::OT::IGF PATHOLOGY PEER REVIEW&PATHOLOGY SUPPORT FOR DNTP&DIR AT NIEHS; CHARLES RIVER LABORATORIES (CRL) CONTRACT:HHSN273201500012C Key points: 1. Contract value represents a significant investment in specialized research support services. 2. Competition dynamics suggest a potentially competitive bidding process for this type of service. 3. Contract duration of 10 years indicates a long-term need for these critical research functions. 4. The specific NAICS code points to a focus on advanced scientific research and development. 5. The contract's performance period spans a decade, suggesting stable, ongoing requirements. 6. This award highlights the agency's reliance on external contractors for essential scientific functions.

Value Assessment

Rating: good

The contract value of $23.4 million over 10 years averages to $2.34 million annually. Benchmarking this against similar contracts for specialized pathology support and peer review services is challenging without more granular data on the scope of work. However, the fixed fee component suggests that the contractor's profit margin is predetermined, which can offer some cost control. The overall value appears reasonable given the long-term nature and specialized expertise required for pathology peer review and support within a federal research agency like NIH.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors were likely solicited and allowed to bid. With three bidders identified, this suggests a moderate level of competition for this specialized service. A higher number of bidders typically leads to more competitive pricing and potentially better value for the government. However, the specialized nature of pathology peer review might limit the pool of highly qualified entities.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and services, potentially leading to cost savings and higher quality outcomes.

Public Impact

Researchers and scientists within the National Institute of Environmental Health Sciences (NIEHS) and the Division of the National Toxicology Program (DNTP) benefit from expert pathology peer review and support. The contract ensures the delivery of critical pathology services essential for the integrity and advancement of research projects. The geographic impact is primarily within the research facilities supported by NIEHS/DNTP, with potential downstream benefits to public health through research findings. The contract supports specialized scientific workforce roles, including pathologists, laboratory technicians, and research support staff, both within the contractor's organization and potentially through collaborations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration (10 years) could lead to complacency or reduced incentive for innovation if not actively managed.
Reliance on a single contractor for a critical function like pathology peer review could pose a risk if the contractor faces performance issues or financial instability.
The 'Cost Plus Fixed Fee' contract type, while providing cost certainty for the government, can sometimes incentivize contractors to incur costs to maximize their fixed fee if not carefully monitored.

Positive Signals

Awarding to a known entity like Charles River Laboratories suggests a level of confidence in their past performance and capabilities.
The full and open competition process indicates that the government sought the best possible solution from the market.
The long contract duration suggests a stable and predictable need for these services, allowing for consistent support of research programs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on life sciences. The market for specialized pathology services, including peer review and support for toxicology and environmental health research, is niche but critical. Federal agencies like NIH often rely on external contractors for such highly specialized expertise that may not be readily available in-house or requires surge capacity. Comparable spending benchmarks would depend on the exact scope and volume of services, but contracts in this domain typically involve significant investment due to the scientific rigor and regulatory implications.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Charles River Laboratories, Inc., is a large corporation. There is no explicit information provided regarding subcontracting plans or requirements for small business participation. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specific support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract specialist at the National Institutes of Health (NIH). Performance monitoring, quality assurance, and adherence to the contract terms are key aspects of oversight. Given the nature of the work, regular reviews of reports, data, and potentially site visits would be expected. Transparency is generally maintained through contract databases and public reporting, though specific performance metrics may be internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

National Toxicology Program (NTP) studies
NIEHS research grants and contracts
Pathology services for federal research
Biomedical research support contracts
Toxicology testing services

Risk Flags

Long contract duration
Specialized service requirement
Potential for scope creep
Reliance on single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $23.4 million to CHARLES RIVER LABORATORIES, INC.. IGF::OT::IGF PATHOLOGY PEER REVIEW&PATHOLOGY SUPPORT FOR DNTP&DIR AT NIEHS; CHARLES RIVER LABORATORIES (CRL) CONTRACT:HHSN273201500012C

Who is the contractor on this award?

The obligated recipient is CHARLES RIVER LABORATORIES, 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 $23.4 million.

What is the period of performance?

Start: 2015-08-24. End: 2025-08-23.

What is the historical spending pattern for pathology peer review and support services at NIH or NIEHS?

Analyzing historical spending for pathology peer review and support services at NIH or NIEHS requires access to detailed contract databases and budget reports over multiple fiscal years. Without specific historical data for this exact service category, it's difficult to provide precise figures. However, federal agencies like NIH consistently invest substantial amounts in research support services, including specialized scientific functions like pathology. The current $23.4 million contract over 10 years suggests an average annual expenditure of approximately $2.34 million. This figure should be compared against previous contracts for similar services, if any, to identify trends in spending, potential increases or decreases in demand, and the evolution of contract values over time. Factors influencing historical spending include research priorities, agency budgets, and the availability of qualified contractors.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar R&D services?

The Cost Plus Fixed Fee (CPFF) contract type used here is common for research and development efforts where the scope of work may evolve or is not precisely defined at the outset. In a CPFF contract, the government reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure provides cost certainty for the government regarding the profit margin, unlike Cost Plus Incentive Fee (CPIF) contracts which can adjust profit based on performance. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for evolving R&D but can be less cost-effective if costs escalate significantly. For highly uncertain R&D, Cost Plus Award Fee (CPAF) might offer better incentives for performance, while FFP is preferred when the scope is well-defined and risks are low.

What is Charles River Laboratories' track record with federal contracts, particularly with NIH?

Charles River Laboratories, Inc. (CRL) is a well-established contract research organization (CRO) with a significant history of performing work for federal agencies, including the National Institutes of Health (NIH). Their track record generally includes providing a wide range of preclinical services, drug discovery support, and safety assessments. Examining their contract history reveals numerous awards across various agencies, indicating substantial experience in government contracting. For NIH specifically, CRL has likely been involved in contracts supporting various research initiatives. A thorough review would involve checking contract performance reports (e.g., past performance questionnaires), any documented disputes or terminations, and the overall value and duration of their previous federal awards to assess their reliability and capability in fulfilling complex research support requirements.

What are the potential risks associated with a 10-year contract for specialized research support?

A 10-year contract for specialized research support, such as pathology peer review, presents several potential risks. Firstly, the long duration could lead to contractor complacency, potentially reducing the incentive to innovate or maintain peak performance if not actively managed through robust oversight and performance metrics. Secondly, the government's needs or research priorities might shift significantly over a decade, making the contracted services less relevant or requiring costly modifications. Thirdly, there's a risk of vendor lock-in, where switching contractors becomes difficult and expensive, even if performance declines. Finally, the long-term financial commitment represents a significant budgetary obligation that could be impacted by future funding uncertainties. Mitigating these risks requires strong contract management, clear performance standards, and periodic reviews of the contract's continued relevance and value.

How does the NAICS code '541712' (Research and Development in the Physical, Engineering, and Life Sciences except Biotechnology) inform the nature of this contract?

The North American Industry Classification System (NAICS) code 541712 specifically categorizes establishments primarily engaged in conducting research and development in the physical, engineering, and life sciences, excluding biotechnology. This code precisely defines the scientific domain of the contract awarded to Charles River Laboratories. It indicates that the work involves advanced scientific inquiry and experimentation related to pathology, toxicology, and potentially environmental health, but not in the realm of genetic engineering or biological product development. This classification helps in understanding the specialized nature of the services, the required expertise of the contractor, and the types of research outcomes expected, aligning with the mission of agencies like the National Institutes of Health (NIH) focused on advancing scientific knowledge for public health.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: NIHES2014009

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Charles River Laboratories International, Inc.

Address: 251 BALLARDVALE ST, WILMINGTON, MA, 01887

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

Financial Breakdown

Contract Ceiling: $31,432,896

Exercised Options: $24,149,948

Current Obligation: $23,409,714

Actual Outlays: $6,848,617

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline