Senate Democrat Seeks Investigation of Obama’s No-Bid Contract for Smallpox Drug

A top Senate Democrat has requested an investigation into the Obama administration’s awarding  a $433 million no-bid contract to the maker of an experimental smallpox vaccine.

Sen. Claire McCaskill, D-Mo., says the five-year contract from the Department of Health and Human Services to Siga Technologies –  a New York company run by a major Democratic donor — raises questions about a conflict of interest and the potential waste of precious taxpayer funds.

In a letter to HHS inspector general Daniel Levinson on Monday, McCaskill expressed worry over the hefty price of the drug (reportedly $255 per dose) because the company had not been not forced to compete for the contract. She also noted that the drug itself, known as ST-246, may not be effective since it has a short shelf-life and hasn’t been tested on humans.

“Under the contract, the department will acquire 1.7 million doses of smallpox vaccine for the strategic national stockpile, ” McCaskill wrote. “The vaccine is reported to be more expensive and has a shorter shelf-life than the vaccine currently in the SNS, and it is unknown whether this produce is actually safe for human use.”

“I request that you review the circumstances surrounding the award of the contract, including whether it was reasonable in light of the risk of a smallpox outbreak and the reported shortfalls with the Siga Technologies vaccine,” she said.  McCaskill chairs a Senate panel that oversees government contracts.

Her request was first reported by the Los Angeles Times, which earlier this month noted the concerns of some leading epidemiologists about the necessity of a new, government-funded vaccine.

The paper also raised questions about the propriety of giving a no-bid contract to a company backed by Ronald O. Perelman, one of the richest men in the world and a major donor to Democrats and President Obama.  McCaskill said the money had been initially set aside by Congress for small business, of which Siga Technologies is not.

The company has spent more than $500,000 lobbying in Washington since 2009, according to  data tracked by the Center for Responsive Politics.

Siga said in a statement to the Times that any review of the contract award would show it was “fair and reasonable” and “negotiated and executed in good faith in accordance with all applicable law to address an important national security need.”

During the 2008 presidential campaign, Obama promised to “ensure that federal contracts over $25,000 are competitively bid.”  While his administration has put more contracts up for bidding than his predecessor, according to PolitiFact, it continues to award millions of dollars in sole-source contracts.