HHS awarded $38.3M for embryonated eggs, with Sanofi Vaccines as the sole awardee

Contract Overview

Contract Amount: $38,341,520 ($38.3M)

Contractor: Sanofi Vaccines US Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-09-01

End Date: 2018-03-01

Contract Duration: 1,277 days

Daily Burn Rate: $30.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::OT::IGF DYNAMIC EMBRYONATED EGG SUPPLY

Place of Performance

Location: SWIFTWATER, MONROE County, PENNSYLVANIA, 18370

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $38.3 million to SANOFI VACCINES US INC. for work described as: IGF::OT::IGF DYNAMIC EMBRYONATED EGG SUPPLY Key points: 1. The contract value represents a significant investment in biological material sourcing. 2. Competition dynamics for this specific biological input appear limited, potentially impacting price. 3. The duration of the contract suggests a long-term need for these specialized materials. 4. Performance context is critical to understand the necessity and scale of this procurement. 5. This falls within the broader pharmaceutical and biological materials sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the quantity and quality of embryonated eggs required. The cost-plus-fixed-fee structure can lead to cost overruns if not managed tightly. Comparing it to similar contracts for biological materials is difficult due to the specialized nature of embryonated eggs for vaccine development.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited. However, the fact that only one award was made suggests that Sanofi Vaccines US Inc. was the only responsive and responsible bidder meeting all the requirements, or it was the most advantageous offer.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a competitive process. However, if only one bidder ultimately qualifies, the intended price discovery benefits may be diminished.

Public Impact

This contract directly supports the development and production of vaccines, benefiting public health. The services delivered are critical for maintaining a supply chain for essential biological components. The geographic impact is primarily within Pennsylvania, where the contractor is located. Workforce implications may include specialized roles in biological production and quality control.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep in cost-plus-fixed-fee contracts if not rigorously monitored.
Limited competition may reduce leverage for price negotiation in future procurements.
Dependence on a single supplier for a critical biological component poses supply chain risk.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
Long contract duration indicates a stable, ongoing need for the product.
Focus on a specialized, critical component for vaccine production.

Sector Analysis

This contract falls within the pharmaceutical preparation manufacturing sector, specifically dealing with biological materials essential for vaccine production. The market for such specialized biological inputs is often niche, with a limited number of qualified suppliers. Comparable spending benchmarks are difficult to ascertain without more granular data on the specific type and quantity of embryonated eggs procured.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. Given the specialized nature of embryonated egg production for vaccine manufacturing, it is likely that larger, established firms with specific expertise and infrastructure are the primary participants in this market.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services, specifically the Office of the Assistant Secretary for Preparedness and Response (ASPR). The contract type (Cost Plus Fixed Fee) necessitates close financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract databases, though specific performance metrics may be internal.

Related Government Programs

Vaccine Research and Development
Biological Material Procurement
Pharmaceutical Manufacturing
Public Health Preparedness

Risk Flags

Cost-Plus-Fixed-Fee contract type requires diligent oversight to manage costs.
Sole awardee in a full and open competition may indicate limited market capacity or specific technical requirements.
Dependence on a single supplier for critical biological materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $38.3 million to SANOFI VACCINES US INC.. IGF::OT::IGF DYNAMIC EMBRYONATED EGG SUPPLY

Who is the contractor on this award?

The obligated recipient is SANOFI VACCINES US 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 $38.3 million.

What is the period of performance?

Start: 2014-09-01. End: 2018-03-01.

What is the specific type and quantity of embryonated eggs procured under this contract, and how does this compare to typical industry needs?

The provided data does not specify the exact type or quantity of embryonated eggs. However, the contract value of $38.3 million over approximately 1277 days (around 3.5 years) suggests a substantial and consistent supply. Embryonated eggs are crucial for the production of many viral vaccines, serving as a growth medium. The specific requirements would depend on the types of vaccines being produced, with different viruses requiring different types of eggs and incubation conditions. Industry needs vary widely based on vaccine demand and production schedules. Without more detailed specifications, a precise comparison to typical industry needs is not feasible, but the contract value indicates a significant procurement.

What were the key evaluation criteria used in the full and open competition that led to Sanofi Vaccines US Inc. being the sole awardee?

While the specific evaluation criteria are not detailed in the provided data, for a full and open competition leading to a sole award, agencies typically evaluate proposals based on factors such as technical approach, past performance, management capability, and price. In this case, Sanofi Vaccines US Inc. likely demonstrated superior technical expertise in producing the required embryonated eggs, offered a more compelling past performance record, presented a robust management plan, and provided the most advantageous price or overall value proposition compared to any other potential bidders. The specialized nature of the product may have also limited the number of technically capable offerors.

How does the Cost Plus Fixed Fee (CPFF) contract structure potentially impact the final cost and the government's oversight requirements?

The Cost Plus Fixed Fee (CPFF) structure means the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty, such as in research and development or specialized manufacturing. For taxpayers, this can pose a risk of cost overruns if the contractor's costs are higher than anticipated. Consequently, it necessitates rigorous government oversight to ensure that all costs claimed are reasonable, allocable, and allowable. The fixed fee, however, provides some cost certainty compared to other cost-reimbursement types, as the profit margin is established upfront.

What are the potential risks associated with relying on a single supplier for such a critical biological component like embryonated eggs?

Relying on a single supplier for a critical component like embryonated eggs introduces several risks. Firstly, there's a supply chain vulnerability; any disruption at the supplier's facility (e.g., disease outbreak affecting the flocks, natural disaster, labor issues) could halt vaccine production. Secondly, it reduces the government's leverage in price negotiations, potentially leading to higher costs over time. Thirdly, it limits options if the supplier's quality or performance declines. The government might mitigate these risks through strong contract management, building strong relationships, potentially encouraging the development of secondary suppliers, or maintaining strategic stockpiles if feasible.

What is the historical spending pattern for embryonated egg supply contracts by HHS or related agencies?

The provided data only pertains to this specific contract awarded in 2014. To understand historical spending patterns, one would need to analyze contract databases for similar procurements by HHS, ASPR, or other agencies involved in vaccine production over multiple years. This would involve searching for contracts with similar Product Service Codes (PSCs) or keywords related to embryonated eggs, vaccine components, or biological materials. Without access to a comprehensive historical database search, it's impossible to detail the spending patterns. However, the existence of this contract suggests a recurring need for these materials in vaccine manufacturing.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sanofi

Address: 1 DISCOVERY DR, SWIFTWATER, PA, 18370

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $38,341,520

Exercised Options: $38,341,520

Current Obligation: $38,341,520

Actual Outlays: $104,931

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline