HHS awards $43.4M contract for pathogen identification research, with a long performance period

Contract Overview

Contract Amount: $43,409,723 ($43.4M)

Contractor: Dnae Group Holdings Limited

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-28

End Date: 2026-12-31

Contract Duration: 3,746 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST SHARING

Sector: R&D

Official Description: IGF::OT::IGF - DNAE / PATHOGEN IDENTIFICATION FROM SPECIMEN, VIA CAPTURE, EXTRACTION AND SEQUENCING (PISCES)

Plain-Language Summary

Department of Health and Human Services obligated $43.4 million to DNAE GROUP HOLDINGS LIMITED for work described as: IGF::OT::IGF - DNAE / PATHOGEN IDENTIFICATION FROM SPECIMEN, VIA CAPTURE, EXTRACTION AND SEQUENCING (PISCES) Key points: 1. Contract value of $43.4M over a 10-year period suggests a significant investment in advanced research capabilities. 2. The definitive contract type indicates a long-term commitment to a specific research objective. 3. The R&D in Biotechnology NAICS code points to a specialized and high-value sector. 4. The contract's duration of over 10 years may present risks related to technological obsolescence or changing research priorities. 5. The absence of small business set-asides suggests the primary contractor is likely a large entity. 6. The cost-sharing contract type implies a shared financial risk and commitment between the government and the contractor.

Value Assessment

Rating: fair

The contract value of $43.4 million over approximately 10 years averages to about $4.34 million per year. Benchmarking this against similar large-scale R&D contracts in biotechnology is challenging without more specific details on the scope of work. However, the cost-sharing nature suggests a potentially favorable arrangement for the government, as the contractor also bears a portion of the expenses. The long duration could indicate a stable, albeit potentially less agile, approach to funding this research.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. This approach generally promotes competitive pricing and allows the government to select the most advantageous offer. The specific number of bidders is not provided, but the full and open nature suggests a robust competition was intended.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to better pricing and a wider range of innovative solutions being considered, maximizing the value of federal investment.

Public Impact

The primary beneficiaries are likely the Department of Health and Human Services (HHS) and potentially public health agencies that will utilize the developed pathogen identification capabilities. The contract aims to deliver advanced capabilities for DNA/pathogen identification from specimens through capture, extraction, and sequencing. The geographic impact is national, focusing on improving public health infrastructure and response capabilities across the United States. Workforce implications may include specialized scientific and technical roles within the contractor's organization and potentially within government research facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) increases the risk of technological obsolescence in a rapidly evolving field like biotechnology.
Cost-sharing contracts can sometimes lead to complexities in accounting and performance monitoring.
The specific nature of 'pathogen identification' could involve sensitive biological materials, requiring stringent security and handling protocols.
Dependence on a single definitive contract for such a critical capability might pose a risk if the contractor faces performance issues.

Positive Signals

Full and open competition suggests a potentially competitive pricing environment and access to a broad range of technical solutions.
The long performance period allows for sustained research and development, potentially leading to more robust and validated outcomes.
Cost-sharing arrangements can align contractor incentives with government objectives and reduce overall federal expenditure.
The focus on pathogen identification aligns with critical national security and public health priorities.

Sector Analysis

This contract falls within the Research and Development in Biotechnology sector, a rapidly advancing field critical for public health, national security, and economic growth. The market for biotechnology R&D is characterized by high innovation, significant investment, and specialized expertise. Comparable spending benchmarks would typically involve other large federal grants or contracts focused on developing novel diagnostic or therapeutic technologies, often in the hundreds of millions of dollars over several years.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no information on subcontracting plans. This suggests the primary awardee is likely a large entity with the capacity to undertake complex R&D projects. The absence of specific small business participation goals means direct benefits to the small business ecosystem through this particular contract are not evident from the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Mechanisms likely include regular progress reports, financial reviews, and potentially site visits. Transparency is generally maintained through contract databases, though specific project details might be sensitive. The HHS Office of Inspector General (OIG) would have jurisdiction for audits and investigations if any issues arise.

Related Government Programs

Biotechnology Research and Development
Public Health Surveillance
Diagnostic Technology Development
National Biodefense Programs
Advanced Sequencing Technologies

Risk Flags

Long-term contract duration may lead to technological obsolescence.
Cost-sharing contracts can introduce complexity in financial management.
Definitive contract limits flexibility for scope changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $43.4 million to DNAE GROUP HOLDINGS LIMITED. IGF::OT::IGF - DNAE / PATHOGEN IDENTIFICATION FROM SPECIMEN, VIA CAPTURE, EXTRACTION AND SEQUENCING (PISCES)

Who is the contractor on this award?

The obligated recipient is DNAE GROUP HOLDINGS LIMITED.

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 $43.4 million.

What is the period of performance?

Start: 2016-09-28. End: 2026-12-31.

What is the specific scientific objective of the PISCES program and how does it advance current pathogen identification capabilities?

The PISCES (Pathogen Identification from Specimen, via Capture, Extraction and Sequencing) program aims to develop and enhance capabilities for identifying pathogens directly from biological specimens. This involves advanced techniques in capture, extraction, and sequencing of genetic material. The program likely seeks to improve the speed, accuracy, and comprehensiveness of pathogen detection compared to existing methods. Advancements could include identifying novel or unknown pathogens, characterizing microbial communities, and providing rapid diagnostic information crucial for public health emergencies, biodefense, and clinical diagnostics. The $43.4 million investment over a decade suggests a commitment to achieving significant breakthroughs in this area.

How does the 'Cost Sharing' contract type impact the financial risk and performance incentives for DNAE GROUP HOLDINGS LIMITED?

In a cost-sharing contract, the contractor (DNAE GROUP HOLDINGS LIMITED) agrees to bear a portion of the project's costs, with the government covering the remainder. This arrangement typically reduces the financial risk for the government and aligns the contractor's incentives with successful project outcomes, as they have a direct financial stake. For DNAE GROUP HOLDINGS LIMITED, it means they must allocate their own resources, potentially impacting their profitability if costs exceed projections or if the government's share is insufficient. Performance incentives are often built into these agreements, encouraging efficiency and innovation to manage shared costs effectively. The specific cost-sharing ratio is not provided but is critical to understanding the precise balance of risk and reward.

Given the 10-year performance period, what are the potential risks associated with technological obsolescence in pathogen identification research?

The field of biotechnology, particularly pathogen identification and sequencing, is characterized by rapid technological advancement. A contract spanning over a decade carries a significant risk of technological obsolescence. By the time the contract nears completion, newer, more efficient, or more accurate technologies may have emerged, potentially rendering the developed PISCES capabilities outdated or less competitive. Mitigating this risk requires incorporating flexibility into the contract, such as periodic reviews for technology upgrades, phased development with opportunities to adapt to new innovations, or focusing on foundational research that remains relevant across different technological eras. Continuous monitoring of the technological landscape by both the government and the contractor is essential.

What does the 'Research and Development in Biotechnology' NAICS code (541711) imply about the nature of the work and the contractor's expertise?

The NAICS code 541711, 'Research and Development in Biotechnology,' signifies that the contract is focused on scientific research and experimental development in the life sciences, utilizing biological systems and organisms to develop or make or improve products. This implies the work involves highly specialized scientific inquiry, experimentation, and innovation. Contractors under this code typically possess advanced scientific expertise, laboratory facilities, and a track record in biological research. DNAE GROUP HOLDINGS LIMITED, operating under this code for this contract, is expected to have deep knowledge in areas like genomics, molecular biology, bioinformatics, and potentially infectious disease research to fulfill the PISCES program's objectives.

How does the 'Definitive Contract' award type influence the government's flexibility and the contractor's commitment?

A definitive contract, unlike a task order contract or basic ordering agreement, is a single, fixed-price or cost-reimbursement contract that specifies all terms and conditions, including quantity and price, for the entire period of performance. For this $43.4 million PISCES contract, it means the government has committed to this specific scope of work and funding level for its duration (ending 2026). This provides the contractor, DNAE GROUP HOLDINGS LIMITED, with a high degree of certainty regarding funding and commitment, allowing for long-term planning and investment in resources. However, it also reduces the government's flexibility to easily change scope, adjust pricing, or switch contractors if needs evolve or performance issues arise without significant contractual modifications or potential termination clauses.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: BAA16100SOL00001

Offers Received: 1

Pricing Type: COST SHARING (T)

Evaluated Preference: NONE

Contractor Details

Address: UGLI CAMPUS BLOCK C, LONDON

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

Financial Breakdown

Contract Ceiling: $61,911,404

Exercised Options: $43,409,723

Current Obligation: $43,409,723

Actual Outlays: $15,780,263

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline