DoD's $19.6M contract for biotech R&D awarded to Catalent Maryland, Inc. via full and open competition

Contract Overview

Contract Amount: $19,609,566 ($19.6M)

Contractor: Catalent Maryland, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-12-28

End Date: 2016-06-15

Contract Duration: 1,631 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: PROCESS, ASSAYS, TESTING AND FORMULATION

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21201

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.6 million to CATALENT MARYLAND, INC. for work described as: PROCESS, ASSAYS, TESTING AND FORMULATION Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The contract type (Cost Plus Incentive Fee) aims to align contractor incentives with government objectives. 3. Performance period of 1631 days indicates a substantial, long-term research and development effort. 4. The North American Industry Classification System (NAICS) code 541711 points to specialized biotechnology research. 5. The contract was awarded to a single entity, Catalent Maryland, Inc., for specific R&D services. 6. The contract value of approximately $19.6 million reflects significant investment in this research area.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Incentive Fee contract is challenging without detailed cost breakdowns and performance metrics. However, the total award of $19.6 million for over four years of R&D in biotechnology suggests a significant investment. Comparisons to similar R&D contracts would be necessary to determine if the pricing is competitive, especially considering the incentive fee structure which can lead to cost overruns if not managed carefully. The lack of specific performance data makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. The presence of a competitive bidding process generally supports price discovery and can lead to more favorable pricing for the government. The number of bidders (4) suggests a reasonable level of interest in this R&D opportunity.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a market where contractors compete on both price and technical merit, potentially leading to cost savings and better value for the government's investment.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the broader U.S. military, through advancements in biotechnology relevant to defense applications. The services delivered include research, development, testing, and formulation in the field of biotechnology. The geographic impact is centered in Maryland (MD), where Catalent Maryland, Inc. is located. Workforce implications include employment for scientists, researchers, technicians, and support staff involved in the R&D process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to higher final costs if performance targets are not met efficiently.
The long duration of the contract (1631 days) increases the risk of scope creep or evolving research needs not being fully anticipated.
Specific details on the 'incentive' metrics are not provided, making it difficult to assess the alignment of contractor and government interests.
The nature of R&D inherently carries risks of technical challenges and potential failure to achieve desired outcomes.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
The contract focuses on a critical area of R&D (biotechnology) that could yield significant strategic advantages.
The use of an incentive fee structure, if well-defined, can motivate the contractor to achieve specific performance goals.
The contractor, Catalent Maryland, Inc., is likely selected based on demonstrated capabilities in biotechnology research and development.

Sector Analysis

The biotechnology research and development sector is a high-growth, innovation-driven industry. This contract falls under NAICS code 541711, 'Research and Development in Biotechnology'. Spending in this sector is crucial for national security, public health, and economic competitiveness. Comparable spending benchmarks would involve looking at other government R&D contracts in biotechnology, particularly those funded by defense agencies, to assess the scale and scope of this award within the broader market.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of biotechnology R&D and the prime contractor being Catalent Maryland, Inc., it is possible that subcontracting opportunities may exist for small businesses with relevant expertise. However, without specific subcontracting plans or goals outlined, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures would be tied to the performance metrics and milestones outlined in the Cost Plus Incentive Fee contract. Transparency is generally maintained through contract award databases and reporting requirements, though specific R&D progress details may be sensitive.

Related Government Programs

Biotechnology Research and Development
Department of Defense Research Contracts
Cost Plus Incentive Fee Contracts
Catalent Inc. Contracts
Army R&D Programs

Risk Flags

Cost Overrun Risk
Performance Target Achievement
R&D Uncertainty
Long-Term Contract Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.6 million to CATALENT MARYLAND, INC.. PROCESS, ASSAYS, TESTING AND FORMULATION

Who is the contractor on this award?

The obligated recipient is CATALENT MARYLAND, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $19.6 million.

What is the period of performance?

Start: 2011-12-28. End: 2016-06-15.

What is Catalent Maryland, Inc.'s track record with the Department of Defense and other federal agencies?

Catalent Maryland, Inc., as part of the larger Catalent Pharma Solutions, has a history of receiving federal contracts, particularly from agencies like the Department of Defense and the National Institutes of Health. Their track record often involves services related to pharmaceutical development, manufacturing, and research. Specific details on past performance, including any awards, penalties, or significant issues, would require a deeper dive into federal procurement databases like FPDS-NG or SAM.gov. However, their established presence suggests a capacity to handle complex R&D projects. The 'DEFINITIVE CONTRACT' type indicates a long-term relationship, and the 'COST PLUS INCENTIVE FEE' structure implies a focus on performance-based outcomes.

How does the $19.6 million contract value compare to similar biotechnology R&D contracts awarded by the DoD?

The $19.6 million contract value for over four years of biotechnology R&D is a substantial investment, but its competitiveness as a benchmark requires context. The DoD funds a wide range of R&D projects, from basic research to advanced development, with costs varying significantly based on scope, complexity, and duration. Contracts for specialized areas like advanced formulation or specific assay development can range from a few million to tens of millions of dollars. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes (541711), contract types (CPIF), and performance periods awarded within the last few years. However, this award appears to be within the typical range for significant, multi-year R&D efforts in this specialized field.

What are the primary risks associated with this Cost Plus Incentive Fee (CPIF) contract for biotechnology R&D?

The primary risks with a CPIF contract for biotechnology R&D revolve around cost control and performance alignment. While CPIF aims to incentivize efficiency, there's a risk that the contractor may incur higher costs than initially projected if performance targets are difficult to achieve or if unforeseen technical challenges arise, potentially increasing the final price paid by the government. For R&D, the inherent uncertainty of scientific discovery means that achieving the 'incentive' milestones might be challenging, leading to disputes or a failure to realize the intended benefits. Furthermore, the government bears a significant portion of the cost risk, as it pays for allowable costs plus an incentive fee based on performance. Effective oversight is crucial to manage these risks.

How effective is the 'full and open competition' approach likely to be in ensuring value for money in this R&D contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money, as it allows the widest possible range of qualified contractors to bid. This broad competition typically drives down prices and encourages innovation as contractors vie for the award. For a specialized R&D contract like this, it suggests that the government sought the best technical solutions and pricing available in the market. The fact that four bidders participated indicates a healthy competitive environment. However, the ultimate value for money also depends on the clarity of the SOW, the effectiveness of the evaluation criteria, and the contractor's ability to deliver on the R&D objectives within the agreed-upon cost and schedule parameters.

What are the historical spending patterns for biotechnology R&D within the Department of the Army?

Historical spending patterns for biotechnology R&D within the Department of the Army (DoA) show a consistent and often increasing investment over the years, driven by the need for advanced medical countermeasures, diagnostics, and other defense-related biological applications. The DoA, through entities like the U.S. Army Medical Research and Development Command (USAMRDC), allocates significant funds to research in areas such as infectious diseases, combat casualty care, and soldier performance enhancement, many of which have strong biotechnology components. Spending fluctuates based on emerging threats, technological advancements, and budgetary priorities. Contracts like the one awarded to Catalent Maryland, Inc. are part of this broader strategic investment in biotechnological capabilities.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911QY11R0039

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Catalent, Inc. (UEI: 828237789)

Address: 801 W BALTIMORE ST STE 401, BALTIMORE, MD, 21201

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,966,492

Exercised Options: $19,659,142

Current Obligation: $19,609,566

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline