HHS Awards $335M for Anthrax Therapeutics, Lacking Small Business Participation

Contract Overview

Contract Amount: $335,107,053 ($335.1M)

Contractor: Human Genome Sciences, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-27

End Date: 2018-09-13

Contract Duration: 4,734 days

Daily Burn Rate: $70.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: Healthcare

Official Description: ANTHRAX THERAPEUTICS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $335.1 million to HUMAN GENOME SCIENCES, INC. for work described as: ANTHRAX THERAPEUTICS Key points: 1. Significant investment in critical medical countermeasures. 2. Solely awarded to Human Genome Sciences, Inc., raising competition concerns. 3. Long contract duration (over 12 years) may impact price competitiveness. 4. No small business participation noted in this large contract.

Value Assessment

Rating: questionable

The total award of $335M over 12 years is substantial. Without clear benchmarks or competitive pricing data, it's difficult to assess value. The lack of competition suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Despite being listed as 'full and open competition,' the award went to a single vendor. This suggests either a highly specialized product or potential issues in the solicitation process that limited bids.

Taxpayer Impact: Taxpayers may be overpaying due to the lack of competitive pressure, especially given the long contract duration.

Public Impact

Ensures availability of a critical medical countermeasure for anthrax. Potential for higher costs to taxpayers due to limited competition. Long-term commitment may not reflect evolving medical needs or technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of demonstrated competition despite 'full and open' status.
No small business participation.
Long contract duration.

Positive Signals

Addresses a critical public health need.
Secures a specific therapeutic agent.

Sector Analysis

This contract falls within the pharmaceutical manufacturing sector, specifically for biological and medical preparations. Spending benchmarks in this area are highly variable based on R&D costs and market exclusivity.

Small Business Impact

This contract shows no indication of small business participation. Given the substantial value and duration, there was likely an opportunity to include small businesses through subcontracting, which was not realized.

Oversight & Accountability

The long duration and single-vendor award warrant closer oversight to ensure continued value and adherence to contract terms. Transparency in the initial competition process is crucial.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Lack of competitive pricing.
Potential for vendor lock-in.
Limited transparency in competition.
No small business inclusion.
Long-term commitment risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $335.1 million to HUMAN GENOME SCIENCES, INC.. ANTHRAX THERAPEUTICS

Who is the contractor on this award?

The obligated recipient is HUMAN GENOME SCIENCES, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $335.1 million.

What is the period of performance?

Start: 2005-09-27. End: 2018-09-13.

What specific factors led to only one vendor being awarded this contract despite a 'full and open competition' designation?

The designation of 'full and open competition' alongside a single awardee suggests potential issues. This could stem from highly specialized intellectual property, unique manufacturing capabilities, or perhaps a flawed solicitation process that inadvertently limited viable bids. Further investigation into the pre-award phase is needed to understand the precise reasons.

How does the $335M cost compare to alternative anthrax treatments or similar biodefense countermeasures, considering the 12-year period?

Benchmarking this cost is challenging without access to proprietary pricing data or comparable contracts for similar biodefense agents. The extended 12-year duration complicates direct comparisons. A thorough cost-benefit analysis, factoring in inflation, R&D recoupment, and potential market alternatives that may emerge, is necessary to truly assess value.

What is the government's strategy for ensuring the continued effectiveness and relevance of these anthrax therapeutics over the 12-year contract lifespan?

The government likely relies on contract clauses for periodic reviews, performance monitoring, and potentially options for updates or modifications based on new scientific developments. However, a 12-year span in pharmaceuticals is significant, and proactive engagement with the vendor and scientific community is essential to mitigate risks of obsolescence or reduced efficacy against evolving threats.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 200N01385

Offers Received: 4

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Parent Company: Glaxosmithkline PLC (UEI: 238980408)

Address: 14200 SHADY GROVE RD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $335,107,053

Exercised Options: $335,107,053

Current Obligation: $335,107,053

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline