How Operation Warp Speed's Big Vaccine Contracts Could Stay Secret

More than $6 billion in federal funding has been routed through a firm that manages defense contracts, making the agreements subject to less federal scrutiny and transparency.

Transcript

ARI SHAPIRO, HOST:

The Trump administration compares its crash program to develop a coronavirus vaccine to the Manhattan Project. And like the secretive atomic bomb initiative, details about Operation Warp Speed's work may take years to fully unravel. NPR pharmaceuticals correspondent Sydney Lupkin reports.

SYDNEY LUPKIN, BYLINE: Operation Warp Speed has announced vaccine contracts worth billions of dollars to pharmaceutical companies. But NPR has learned that many of the deals have been issued through a nongovernment intermediary. This approach allows Operation Warp Speed to award the money quickly but can weaken the oversight and transparency of traditional government contracting. A senior administration official tells NPR that the government took this approach to address the pandemic.

Robin Feldman, a professor at the University of California, Hastings College of the Law, says it makes some sense to cut through red tape during a crisis, but there's a trade-off.

ROBIN FELDMAN: We have to be on a wartime footing. We have to operate in a different way. However, we have to be careful about what we throw out in that process.

LUPKIN: Most government contracts have to follow a set of rules called the Federal Acquisition Regulation. Franklin Turner, a lawyer who works on government contracts, says the rules include everything from an anti-human-trafficking clause to requirements about ethics and company conduct.

FRANKLIN TURNER: It's really a Bible that the government and contractors are supposed to follow with respect to a given acquisition.

LUPKIN: But the standard contracting process can take months or years. So the government allowed an alternative called an other transaction agreement, or OTA. This approach was intended to attract companies that otherwise wouldn't be willing to contract with the federal government. But these alternative agreements come with a risk for the government and taxpayers. They don't include some standard protections. Typical contracts would allow the government to take control of a drug or vaccine if, for example, the drugmaker engages in price gouging. Leaving that out worries people like Kathryn Ardizzone, a lawyer at Knowledge Ecology International, a nonprofit focused on intellectual property policy.

KATHRYN ARDIZZONE: All of the regulations that are in a traditional government contract are there to protect ordinary, everyday Americans. And it's very concerning that they're left out here.

LUPKIN: Four vaccine contracts worth more than $6 billion went through an intermediary called Advanced Technology International. It manages a lot of these non-traditional contracts for consortia of companies, academics and nonprofits. The Defense Department spoke with Advanced Technology International in the spring about something called the Medical CBRN Defense Consortium. Its members included pharmaceutical companies already working on COVID-19 vaccines. And the organization already had a standing contract with the government regarding this consortium.

Robert Tuohy is Advanced Technology International's former chief operating officer. He said it collected vaccine proposals from consortium members and passed them along to the federal government to make a decision.

ROBERT TUOHY: Then they hand us the money and ask us to award essentially a sub-OTA to the team that they have selected within the membership of the consortium.

LUPKIN: The Defense Department never told Tuohy's team that they were doing work for Operation Warp Speed. He called that information invisible to his organization. Because these OTAs were issued through a third party, it might be impossible to get copies of the contracts under public records laws. Ardizzone and I separately filed public records requests for large vaccine procurement contracts that HHS has announced. Here's Ardizzone again.

ARDIZZONE: The stakes are as high as you could ever imagine. And now we don't know what's in the agreements.

LUPKIN: So far, neither of us have gotten the records we asked for.

Sydney Lupkin, NPR News. Transcript provided by NPR, Copyright NPR.