DoD's $117.6M R&D contract with Dynport Vaccine Company shows long duration and high cost

Contract Overview

Contract Amount: $117,632,941 ($117.6M)

Contractor: Dynport Vaccine Company LLC

Awarding Agency: Department of Defense

Start Date: 2013-05-09

End Date: 2023-05-22

Contract Duration: 3,665 days

Daily Burn Rate: $32.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PROGRAM REPORTING - TECHNICAL

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21702

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $117.6 million to DYNPORT VACCINE COMPANY LLC for work described as: PROGRAM REPORTING - TECHNICAL Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 3665 days (over 10 years) is exceptionally long for an R&D effort. 3. Cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed tightly. 4. The North American Industry Classification System (NAICS) code 541711 points to significant investment in biotechnology research. 5. The contract's value of over $117 million warrants close scrutiny of its performance and outcomes. 6. The lack of specific Product Service Code (PSC) data makes it difficult to pinpoint the exact nature of the R&D.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging without more specific details on the R&D deliverables. However, a 10-year duration for a single R&D contract of this magnitude is unusual and suggests potential for scope creep or extended development cycles. The CPFF structure, while common in R&D, requires diligent oversight to ensure cost efficiency. Compared to typical R&D contracts, the extended timeline and significant funding raise questions about the project's progress and ultimate value realization.

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. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The fact that it was competed suggests that the agency sought the best value proposition from the market for this specific research and development need.

Taxpayer Impact: Full and open competition is the most taxpayer-friendly approach, as it maximizes the potential for cost savings through a robust bidding process.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially public health sectors through advancements in biotechnology. Services delivered include research and development in biotechnology, aiming for novel solutions or improvements. The geographic impact is primarily within Maryland, where the contractor is located, but the research outcomes could have national or global implications. Workforce implications include specialized jobs in scientific research and development within the biotechnology field.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (over 10 years) may indicate slow progress or evolving research needs, increasing risk.
Cost-plus-fixed-fee (CPFF) contract type can incentivize cost increases if not rigorously monitored.
Lack of specific deliverable details makes it hard to assess performance against objectives.
The significant dollar amount over a long period requires strong justification for continued funding.
Potential for contractor lock-in due to the long-term nature of the engagement.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Focus on R&D in biotechnology addresses critical national security or public health needs.
Contractor has secured a significant award, indicating perceived capability in the R&D space.
Long-term nature could imply a strategic, foundational research effort.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on biotechnology. The biotechnology market is characterized by high innovation, significant investment, and long development cycles. Federal spending in this area often supports foundational research that may not be pursued by the private sector due to high risk and long return horizons. Comparable spending benchmarks would depend heavily on the specific sub-field of biotechnology being researched, but contracts in the tens to hundreds of millions are common for advanced R&D projects.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-value definitive contract, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified within the contract's statement of work. The focus on specialized R&D in biotechnology may also limit the types of small businesses that could participate in subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the Department of the Army. Given the CPFF structure and long duration, rigorous oversight of expenditures, progress reports, and adherence to the statement of work is crucial. Transparency would be enhanced through regular performance reviews and public reporting of milestones, though specific details are not provided here. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Biotechnology Research Programs
Department of Defense Research and Development
Advanced Medical Research
National Biodefense Strategy Initiatives

Risk Flags

Long Contract Duration
Cost-Plus Contract Type
High Contract Value
Lack of Specific Deliverables in Summary Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.6 million to DYNPORT VACCINE COMPANY LLC. PROGRAM REPORTING - TECHNICAL

Who is the contractor on this award?

The obligated recipient is DYNPORT VACCINE COMPANY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $117.6 million.

What is the period of performance?

Start: 2013-05-09. End: 2023-05-22.

What specific biotechnology advancements has Dynport Vaccine Company LLC delivered under this contract?

The provided data does not specify the exact biotechnology advancements delivered under this contract. The contract is for 'Research and Development in Biotechnology' (NAICS 541711) and was awarded as a Definitive Contract with a Cost Plus Fixed Fee (CPFF) structure. CPFF contracts are common for R&D where the scope may evolve or be difficult to define precisely upfront. To assess specific deliverables, one would need to review contract performance reports, technical milestone achievements, and final research outcomes, which are not included in the summary data. The long duration (over 10 years) suggests a potentially complex or long-term research effort, possibly related to vaccine development, therapeutics, or diagnostic tools, but concrete outcomes require deeper investigation into contract-specific documentation.

How does the $117.6 million cost compare to similar biotechnology R&D contracts within the Department of Defense?

Comparing the $117.6 million cost requires context regarding the specific R&D area within biotechnology. For long-term, high-risk research projects, especially those with potential national security or biodefense implications, such funding levels are not uncommon within the Department of Defense (DoD). However, the duration of this contract (over 10 years) is exceptionally long. Typical R&D contracts might range from 1-5 years. A contract of this magnitude over such an extended period suggests a foundational or platform technology development rather than a narrowly defined project. Benchmarking would involve looking at other DoD contracts for similar 'Research and Development in Biotechnology' (NAICS 541711) with durations exceeding 5 years to understand if this represents a standard investment or an outlier.

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

The primary risks associated with a CPFF contract of this duration ($117.6M over 10+ years) are twofold: cost escalation and performance monitoring. With CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure can incentivize the contractor to incur higher costs, as their profit margin remains constant regardless of the total cost. For a long-duration contract, the risk of cost escalation due to changing market conditions, unforeseen technical challenges, or scope creep is significant. Furthermore, monitoring performance and ensuring value for money over such an extended period requires robust oversight from the government to ensure the research remains aligned with objectives and that funds are used efficiently. The fixed fee, while intended to provide contractor incentive, might not adequately account for the complexities that arise over a decade of R&D.

What is the strategic importance of this biotechnology R&D contract for the Department of Defense?

The strategic importance of this contract likely lies in advancing biotechnology capabilities relevant to national security. This could encompass areas such as biodefense (e.g., developing countermeasures against biological threats), advanced medical treatments for service members, or novel materials and technologies derived from biological processes. Given the DoD's mission, investments in biotechnology R&D are crucial for maintaining a technological edge and ensuring the health and readiness of military personnel. The long-term nature suggests a focus on fundamental research or platform development that could yield significant future capabilities, rather than immediate product deployment. The specific focus within biotechnology would determine the precise strategic relevance, but generally, it supports the DoD's broader goals of threat mitigation and force modernization.

How has federal spending in biotechnology R&D, specifically within the DoD, trended over the life of this contract?

The contract was awarded in May 2013 and extends to May 2023. Over this period, federal spending in biotechnology R&D, particularly within the DoD, has generally seen increases, driven by evolving national security threats (like pandemics and bioterrorism) and advancements in life sciences. The DoD's research portfolio often includes significant investments in areas like medical countermeasures, human performance optimization, and synthetic biology. While this specific contract represents a substantial single award, overall federal investment in biotech R&D has been robust, often supported by initiatives like the Defense Advanced Research Projects Agency (DARPA) and the National Institutes of Health (NIH), which collaborate with or fund similar research. Tracking overall trends would require analyzing broader federal budget data for R&D appropriations in the life sciences sector.

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: W911QY12R0056

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 64 THOMAS JOHNSON DR, FREDERICK, MD, 21702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $258,064,432

Exercised Options: $257,417,661

Current Obligation: $117,632,941

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $132,491,378

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline