HHS awards $1.38B R&D contract for biotechnology, with 3.79 years remaining

Contract Overview

Contract Amount: $1,385,742,139 ($1.4B)

Contractor: Emergent Product Development Gaithersburg Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2016-09-30

End Date: 2026-09-29

Contract Duration: 3,651 days

Daily Burn Rate: $379.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.39 billion to EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC. for work described as: IGF::OT::IGF Key points: 1. Contract value of $1.38B over its life suggests significant investment in research and development. 2. The contract was awarded through full and open competition, indicating a broad search for qualified vendors. 3. A Cost Plus Fixed Fee (CPFF) pricing structure may incentivize cost control while ensuring contractor profit. 4. The contract's duration of over 10 years (3651 days) points to a long-term strategic objective. 5. The primary NAICS code (541711) signifies a focus on biotechnology research and development. 6. The contract is managed by the Office of Assistant Secretary for Preparedness and Response (ASPR), highlighting its alignment with public health emergency preparedness. 7. The contractor, EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC., is a key player in the biotechnology sector.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific deliverables and market comparables for similar long-term R&D initiatives in biotechnology. However, the substantial award amount suggests a significant investment by HHS. The CPFF structure, while common for R&D, requires careful oversight to ensure costs remain reasonable and the fixed fee is appropriate for the scope of work. The contract's longevity implies a sustained need for the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and innovative solutions. The number of bidders is not specified, but the open competition indicates a robust market for these specialized R&D services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a wider range of proposals and potentially driving down costs through market forces, ensuring federal funds are used efficiently.

Public Impact

The primary beneficiaries are likely the public, through advancements in biotechnology relevant to health preparedness and response. The contract supports research and development activities crucial for addressing public health threats. The geographic impact is centered in Maryland, where the contractor is located. Workforce implications include employment opportunities for scientists, researchers, and support staff within the biotechnology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not closely monitored.
The long duration of the contract may present challenges in adapting to evolving technological landscapes or strategic priorities.
Dependence on a single contractor for a significant R&D effort could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, indicating a competitive selection process.
The contract supports critical research and development in biotechnology, aligning with national health security goals.
The contractor is a specialized entity with a focus on product development in this field.

Sector Analysis

The biotechnology sector is characterized by intensive research and development, high innovation potential, and significant regulatory oversight. This contract falls within the 'Research and Development in Biotechnology' category (NAICS 541711). The market for such services is driven by government funding for health security, pharmaceutical advancements, and life sciences innovation. Comparable spending benchmarks would typically involve analyzing other large-scale R&D contracts awarded by agencies like HHS, NIH, or DoD for similar biotechnological research.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the substantial value and specialized nature of the R&D work, it is likely that larger, established firms were the primary participants in the competition. Subcontracting opportunities for small businesses may exist, but they would depend on the prime contractor's strategy and the specific needs of the project. The overall impact on the small business ecosystem for this particular contract appears limited.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract awards databases, though specific project details and performance metrics may be sensitive. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Biotechnology Research and Development
Public Health Preparedness
Medical Countermeasures
Advanced Research Projects Agency for Health (ARPA-H)
National Institutes of Health (NIH) Contracts

Risk Flags

Long contract duration may increase risk of obsolescence or changing needs.
CPFF contracts require vigilant oversight to manage costs.
Dependence on a single contractor for critical R&D.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.39 billion to EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC.. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG 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 $1.39 billion.

What is the period of performance?

Start: 2016-09-30. End: 2026-09-29.

What is the track record of EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC. with federal contracts, particularly within HHS?

Emergent Product Development Gaithersburg Inc. has a history of federal contracting, notably with the Department of Health and Human Services (HHS). Their involvement often centers on developing medical countermeasures and products related to public health emergencies. Analyzing their past performance, including contract awards, completion success, and any reported issues or awards, provides insight into their capability and reliability. Specific details on past performance metrics, such as adherence to schedule and budget on previous HHS contracts, would be crucial for a comprehensive assessment. Their track record suggests a specialization in areas critical to national health security, aligning with the objectives of this large R&D award.

How does the $1.38B value compare to similar long-term biotechnology R&D contracts?

The $1.38 billion total award value for this contract is substantial, reflecting a significant, long-term investment in biotechnology research and development. Comparing it to similar contracts requires identifying other large-scale, multi-year R&D awards within the biotechnology sector, particularly those focused on health preparedness and countermeasures. Agencies like the Department of Defense (DoD) and the National Institutes of Health (NIH) also issue large R&D contracts. While specific dollar-for-dollar comparisons are difficult without knowing the exact scope and deliverables, a $1.38B award over a decade indicates a high-priority, complex undertaking. It suggests that the government perceives a critical need and is willing to commit significant resources to achieve specific R&D outcomes in this area.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a CPFF contract of this magnitude and duration include potential cost overruns and a reduced incentive for the contractor to aggressively control expenses, as profits are based on a fixed fee regardless of the final cost. While the CPFF structure is suitable for R&D where the scope may evolve, it necessitates robust government oversight to monitor costs, ensure efficiency, and prevent scope creep that isn't aligned with program objectives. The long duration (over 10 years) introduces risks related to technological obsolescence, shifts in strategic priorities, and the contractor's sustained capability and financial stability. Effective risk mitigation requires diligent contract management, regular performance reviews, and clear communication channels between the government and the contractor.

What are the implications of this contract for the broader biotechnology R&D landscape and national health security?

This contract signifies a substantial commitment by the government to advancing biotechnology R&D, particularly in areas relevant to national health security and preparedness. It likely supports the development of critical medical countermeasures, diagnostic tools, or therapeutic agents aimed at addressing potential public health threats. Such large-scale investments can stimulate innovation, foster specialized expertise within the contractor's organization, and potentially lead to breakthroughs with significant public health benefits. By funding long-term R&D, the government aims to build a robust pipeline of solutions, thereby enhancing national resilience against biological threats and improving overall public health outcomes.

How does the geographic location (Maryland) influence the contract's execution and impact?

Maryland is a well-established hub for biotechnology and life sciences research, with a high concentration of federal agencies, research institutions, and private companies in the sector. Locating the contractor, EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC., in Maryland likely provides advantages such as access to a skilled workforce, proximity to regulatory bodies like the FDA, and potential collaboration opportunities with other entities in the region. This geographic concentration can facilitate efficient project execution and foster a synergistic environment for R&D. The impact is primarily economic within Maryland, supporting jobs and the local biotech ecosystem, while the ultimate benefits of the R&D are national in scope.

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: 16100SOL00015

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emergent Biosolutions Inc.

Address: 300 PROFESSIONAL DR, GAITHERSBURG, MD, 20879

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

Financial Breakdown

Contract Ceiling: $1,433,362,669

Exercised Options: $1,385,742,139

Current Obligation: $1,385,742,139

Actual Outlays: $677,581,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline