The Funding:
Following the Money
Developing a COVID-19 vaccine in record time comes at a price. How much funding has been obligated for COVID-19 vaccines under the Department of Defense (DOD) and Department of Health and Human Services (HHS) partnership? Here we take a closer look at the federal funding for the program.
Image source: Julien Eichinger, Rassco/stock.adobe.comHow much has been obligated for COVID-19 vaccines under the DOD and HHS partnership?1
As of March 14, 2021, DOD and HHS had obligated at least $20 billion to develop, manufacture, and distribute COVID-19 vaccines under the DOD and HHS partnership, as shown in the figure below.
Department of Defense (DOD) and Department of Health and Human Services (HHS) Obligations for COVID-19 Vaccine Candidates under the DOD and HHS Partnership, as of March 14, 2021
Source: GAO analysis of Federal Procurement Data System – Next Generation data. | GAO-21-443Note: The DOD and HHS partnership was formerly known as Operation Warp Speed. We used the HHS Operation Warp Speed website and HHS press releases to determine which contract obligations to include in our analysis. For some vaccine candidates, Operation Warp Speed and the continued DOD and HHS partnership publicly announced support for both clinical development and manufacturing activities; while for other candidates, it only announced support for the manufacturing or purchase of vaccine doses. HHS announced two awards related to distribution for which we could not identify obligations in the Federal Procurement Data System-Next Generation which are not included in the chart above.2
HHS and DOD obligated approximately $13 billion as of December 31, 2020, through awards to six companies–AstraZeneca, Janssen, Moderna, Novavax, Pfizer, and Sanofi–for vaccine dose deliverables and various development and manufacturing activities associated with the different awards. Awards made from March through June were generally to fund development efforts, including clinical trials. Awards made from July to October were generally for vaccine manufacturing or the purchase of initial vaccine doses.
In addition to vaccines, HHS and DOD had obligated almost $2 billion as of December 31, 2020, through awards to three companies—Regeneron, AstraZeneca, and Eli Lilly—for the development and manufacture of laboratory-made antibodies.
What are OTAs and how are they accelerating the process?3
To accelerate the development and delivery of vaccines for COVID-19, HHS and DOD awarded contracts and “other transaction agreements” (OTA) for development, manufacturing, and the purchase of doses.
OTAs are flexible agreements that allow the parties to negotiate terms and conditions specific to the project. In our prior work, we noted that this flexibility can help agencies attract and contract with entities that have not done business with federal agencies due to concerns about standard government requirements. We also noted potential challenges with their use in terms of a risk of reduced accountability and transparency. OTAs are generally exempt from federal procurement laws and regulations, allowing intellectual property rights under each OTA to be tailored to suit the goals of the project.
DOD awarded OTAs to five of the six companies for vaccine deliverables.4 Overall, about $8.8 billion of the roughly $13 billion for vaccine development and manufacturing have been obligated through OTA awards as of December 31, 2020.
Footnotes
- Source: GAO-21-443
- Source: GAO-21-443
- Source: GAO-21-265
- From GAO-21-265: In the sixth case, DOD awarded a firm-fixed-price contract in accordance with the Federal Acquisition Regulation (FAR). Federal Acquisition Regulation § 16.202. GAO, COVID-19 Contracting: Observations on Federal Contracting in Response to the Pandemic, GAO-20-632 (Washington, D.C.: July 29, 2020).