Siga's No-Bid Contract From the Obama Administration

To paraphrase a local radio station disk jockey from my youth, “The hits just keep on coming.” We have had, among others, Fast and Furious and Solyndra scandals. As if those scandals weren’t enough, we now get Siga Technologies. What, you ask, is Siga? Well, hopefully this post will inform you.

Siga is a pharmaceuticals company, whose controlling stockholder is Ronald O. Perelman, a major democrat donor. (BTW, for a list of Perelman political contributions, see this link.) The Department of Health and Human Services (HHS) has signed a no-bid contract with Siga Technologies for $443 million (as much as $2.8 billion if the government exercises its purchase option) to buy a high priced drug to combat smallpox.

From this source, we learn that Siga got:

• A no-bid contract, a “sole-source” procurement for which Siga was the only company allowed to submit a proposal.
• Obama administration officials blocked other firms from competing when Siga was in danger of losing the contract.
• Siga’s bid of $255 per dose, a 180% profit, is far above what the government’s specialists said was reasonable.
• Senior officials at HHS replaced the lead negotiator for the deal when Siga complained that contracting specialists at HHS were resisting the company’s financial demands.
• The smallpox vaccine, which costs the government $3 per dose, can reliably prevent death when given within four days of exposure.
• Dr. Thomas M. Mack, an epidemiologist at USC’s Keck School of Medicine, called the plan to stockpile Siga’s drug “a waste of time and a waste of money.”
• Siga’s drug, an antiviral pill called ST-246, would be used to treat people who were diagnosed with smallpox too late for the vaccine to help. But ST-246 cannot be tested on people because of ethical constraints.
• In June, 2010, Siga upped its presence in Washington D.C. by naming Andrew Stern to its Board of Directors. Stern, former head of the Service Employees International Union (SEIU) and frequent visitor to the Obama White House, led a union that is a source of campaign money and volunteers for Democrat candidates.
• The federal contract required that the winning bidder be a small business, with no more than 500 employees. Officials at the Small Business Administration investigated and agreed that Siga did not qualify. So what did the Obama administration do? It blocked all companies – except Siga – from bidding on a second offering of the contract.
• St-246 has a shelf life of 38 months, unlike the smallpox vaccine which remains potent for decades.

Bottom line: Smallpox has been eradicated and only “is known to exist only in the locked freezers of a Russian scientific institute and the U.S. government.” The government’s pursuit of Siga’s product raises the question: Should the U.S. buy an unproven drug for such a nebulous threat as a smallpox biological attack?

But that’s just my opinion.