HHS awarded $1.01B for smallpox vaccine, with Bavarian Nordic A/S as the sole supplier

Contract Overview

Contract Amount: $1,010,761,647 ($1.0B)

Contractor: Bavarian Nordic A/S

Awarding Agency: Department of Health and Human Services

Start Date: 2007-06-04

End Date: 2018-09-27

Contract Duration: 4,133 days

Daily Burn Rate: $244.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

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

Sector: Healthcare

Official Description: ACQUISITION OF SMALLPOX MVA VACCINE FOR THE STRATEGIC NATIONAL STOCKPILE

Plain-Language Summary

Department of Health and Human Services obligated $1.01 billion to BAVARIAN NORDIC A/S for work described as: ACQUISITION OF SMALLPOX MVA VACCINE FOR THE STRATEGIC NATIONAL STOCKPILE Key points: 1. The contract value represents a significant investment in biodefense preparedness. 2. Bavarian Nordic A/S has been the primary supplier for this critical vaccine. 3. The duration of the contract suggests a long-term need for vaccine stockpiling. 4. The acquisition supports the Strategic National Stockpile's readiness against biological threats. 5. This spending is concentrated within the biopharmaceutical manufacturing sector. 6. The absence of multiple bidders raises questions about market competition for this specific product.

Value Assessment

Rating: fair

The total award of over $1 billion for smallpox vaccine over more than a decade indicates a substantial, ongoing commitment to national health security. Benchmarking this specific vaccine acquisition is challenging due to its specialized nature and the limited number of manufacturers capable of producing it. However, the sustained funding suggests a perceived value in ensuring a robust supply of this critical medical countermeasure. Further analysis would require comparing per-unit costs over time and against any potential alternative suppliers or similar biodefense vaccine procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning only one vendor, Bavarian Nordic A/S, was considered. This approach is typically used when a unique product or service is required, and only one entity can provide it. While this ensures access to the specific vaccine, it limits the opportunity for competitive bidding, which could potentially drive down costs or foster innovation among multiple suppliers.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to reduce costs. It also means taxpayers are reliant on a single supplier for a critical national security asset.

Public Impact

The primary beneficiaries are the citizens of the United States, who are protected by a replenished Strategic National Stockpile. The service delivered is the acquisition and maintenance of a critical biological product: the smallpox vaccine. The geographic impact is national, ensuring readiness across the entire country. Workforce implications are primarily within the biopharmaceutical manufacturing and public health sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pricing and potential innovation.
Long-term reliance on a single supplier could pose supply chain risks.
High contract value warrants scrutiny of cost-effectiveness over the contract's life.

Positive Signals

Ensures a critical medical countermeasure is available for national security.
Supports a key supplier in the biodefense industrial base.
Long contract duration indicates a stable and predictable supply chain for this essential vaccine.

Sector Analysis

This contract falls within the biopharmaceutical manufacturing sector, a critical component of the healthcare and defense industrial bases. The market for specialized vaccines, particularly those for rare or bioterrorism-related diseases, is often characterized by a limited number of qualified manufacturers. Spending in this area is driven by national security imperatives and public health preparedness, rather than typical market demand. Comparable spending benchmarks would likely be found in other strategic stockpile acquisitions for medical countermeasures.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements in the provided data. Given the specialized nature of vaccine manufacturing and the sole-source award to a large international company, the direct impact on the small business ecosystem is likely minimal. However, the overall health of the biopharmaceutical sector, which includes small businesses in research and development or ancillary services, could be indirectly influenced by sustained government investment in critical medical supplies.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). Accountability measures would include contract performance reviews, delivery schedules, and quality control of the vaccine. Transparency is generally maintained through contract databases, though specific details on pricing negotiations and performance metrics may be limited due to the sole-source nature and national security considerations. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Strategic National Stockpile
Biodefense Preparedness Programs
Vaccine Manufacturing Contracts
Public Health Security Initiatives

Risk Flags

Sole-source procurement
Long contract duration
High total contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.01 billion to BAVARIAN NORDIC A/S. ACQUISITION OF SMALLPOX MVA VACCINE FOR THE STRATEGIC NATIONAL STOCKPILE

Who is the contractor on this award?

The obligated recipient is BAVARIAN NORDIC A/S.

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 $1.01 billion.

What is the period of performance?

Start: 2007-06-04. End: 2018-09-27.

What is the historical spending trend for smallpox vaccines by HHS?

The provided data focuses on a single, large definitive contract awarded in 2007 with an end date in 2018, totaling over $1 billion. This suggests a significant, concentrated investment during that period for the acquisition of Bavarian Nordic A/S's MVA smallpox vaccine for the Strategic National Stockpile. Without access to broader historical contract data for smallpox vaccines across different vendors and timeframes, it is difficult to establish a precise spending trend. However, this single large award indicates a substantial commitment to maintaining a supply of this specific vaccine, likely driven by evolving public health and national security assessments regarding smallpox threats.

How does the per-unit cost of this smallpox vaccine compare to other similar biodefense countermeasures?

Directly comparing the per-unit cost of this smallpox vaccine to other biodefense countermeasures is challenging without specific unit cost data from this contract and comparable data from other procurements. The provided data aggregates the total award amount ($1.01 billion) over a long duration (4133 days) but does not break down the number of units purchased or the price per unit. Furthermore, the market for biodefense countermeasures is highly specialized, with few qualified manufacturers for each specific agent. This often leads to unique pricing structures influenced by research and development costs, manufacturing complexity, and the strategic importance of the countermeasure. A comprehensive comparison would require access to detailed pricing information for various countermeasures and an understanding of their respective development and production lifecycles.

What are the key performance indicators (KPIs) used to evaluate Bavarian Nordic A/S's performance under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, for a contract involving the acquisition of a critical vaccine for the Strategic National Stockpile, typical KPIs would likely include: timely delivery of vaccine doses according to agreed-upon schedules, adherence to stringent quality control and manufacturing standards (e.g., FDA regulations, Good Manufacturing Practices), maintenance of vaccine potency and shelf-life, and potentially responsiveness to any surge requirements or specific storage and handling protocols. Performance would also be assessed against the overall value and cost-effectiveness of the delivered product in meeting the government's preparedness goals. The government would monitor these aspects to ensure the continued readiness of the national stockpile.

What is the risk associated with relying on a single supplier for a critical vaccine?

Relying on a single supplier for a critical vaccine, as is the case with Bavarian Nordic A/S for this smallpox vaccine acquisition, presents several significant risks. Firstly, there is a supply chain vulnerability; any disruption at the supplier's manufacturing facility, due to technical issues, natural disasters, labor disputes, or geopolitical events, could halt production and jeopardize the national stockpile. Secondly, the lack of competition can lead to higher prices and reduced leverage for the government in price negotiations. Thirdly, it may stifle innovation, as there is less incentive for alternative suppliers to enter the market or for the incumbent supplier to significantly improve processes or products if demand is guaranteed. Finally, if the sole supplier faces financial difficulties or decides to exit the market, the government could face substantial challenges in finding and qualifying a new supplier, potentially leaving the nation vulnerable.

How has the Strategic National Stockpile's smallpox vaccine inventory evolved over the past decade?

The provided data reflects a significant acquisition of smallpox vaccine (MVA) by the Department of Health and Human Services (HHS) from Bavarian Nordic A/S, totaling over $1 billion, with contract dates spanning from 2007 to 2018. This suggests a substantial effort to bolster or maintain the Strategic National Stockpile's (SNS) inventory of smallpox vaccines during this period. While this data point indicates a large procurement, it doesn't provide a complete picture of the SNS inventory's evolution, which would involve tracking acquisitions, expirations, and potential depletions or additions from other sources or contracts. However, the scale of this single award implies a strategic decision to invest heavily in ensuring a robust supply of this specific vaccine, likely in response to ongoing threat assessments and preparedness strategies.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Biological Product (except Diagnostic) Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFPDHHSORDCV&B0506

Offers Received: 2

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

Evaluated Preference: NONE

Contractor Details

Address: HEJRESKOVVEJ 10A, KVISTG?RD

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $2,008,964,331

Exercised Options: $1,510,761,647

Current Obligation: $1,010,761,647

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline