USAID to award AIDS drug supply chain contract

US Agency for International Development

Officials from the U.S. Agency for International Development (USAID) will soon award a multimillion-dollar contract to develop a global supply chain management system for purchasing, distributing and tracking drugs to treat people with HIV/AIDS and related infections.

The system is part of the President’s Emergency Plan for AIDS Relief, a five-year, $15 billion initiative to distribute medicine and supplies to 2 million people with HIV, prevent 7 million new infections, and provide care to 10 million people with the disease in 15 of the most-afflicted countries.

The system would deliver up to $7 billion in antiretroviral drugs and services.

According to an industry source, teams led by IBM, BearingPoint and John Snow are the three finalists for the supply chain management contract. The source said the contract could be awarded as early as this week.

“As of right now, I’m really not at liberty to discuss anything because it’s still at a procurement stage,” Roslyn Matthews, a spokeswoman for USAID, said last week. “We do expect the award to be coming out very soon.”

She also declined to identify the finalists.

However, the industry source, who spoke on the condition of anonymity because the person's company is part of one of the teams bidding for the contract, said the agency has capped development, deployment, operation and maintenance of the supply chain at $75 million for the initiative’s first three years.

“Subsequent questions came out about really what does that mean and what happens if the program grows,” the source said. “They came back and the response was even if the program were to grow…that $75 million was still the cap.”

The source said there’s a unique blend of technology, security and pharmaceutical companies forming each team. The source added that the technology solution to the initiative is not complex, but a lot of technical infrastructure needs to be in place in those 15 countries.

The source said a project of this nature should probably cost “several hundred million dollars -- not $75 million.”

Matthews said she could not discuss any problems the vendors may have run into. Several representatives of large companies initially interested in bidding on the supply chain management project declined to comment for this story.

In a July 4 piece in the New Republic regarding the plan and the $75 million cap, Mark Dybul, deputy U.S. global AIDS coordinator, said USAID had done its homework about the cost and that many bidders had no problem with the monetary cap.

The source said industry officials had complained to USAID about the cap. The source said the winning bidder will put in a “piecemeal or a skeleton-type approach in supporting this, and it’s going to take a lot longer to the point of successful distribution in establishing a network that makes this program very healthy.”