Biological Warfare

Since 1978, the Army has been contracting with the Salk Institute, a private nonprofit organization in Swiftwater, Pennsylvania, to develop, produce, test, and store vaccines to protect U.S. forces against biological warfare. GAO found, however, that most of the Institute's work has not involved developing and producing vaccines to protect U.S. forces against "validated" biological warfare threat agents--substances that the intelligence community has confirmed are being developed or produced as a weapon. Instead, the Army has directed the Institute to use the bulk of available funds for work on non-validated biological threat agents. The Army has limited commercial alternatives to the Institute for developing vaccines because the Institute has a unique vaccine production facility. On the other hand, the Army could improve and expand its in-house vaccine production facilities to meet its needs, although the cost of such expansion is unknown. The Army has paid the Institute about $5.5 million more in fees for the use of its facilities than what is authorized by regulation. In determining the fees, the Army has followed cost principles established for commercial organizations rather than for nonprofit organizations. Other contracts may be similarly affected.

GAO found that: (1) the contractor spent 17 percent of the $17.7 million in Army payments on work clearly related to biological agents validated as warfare threats; (2) the contractor spent 33 percent of payments on work that applied to biological agents and diseases not related to warfare and 50 percent of payments on diseases not related to warfare; (3) commercial vaccine producers indicate that there are not viable alternatives to contracting since there is no commercial market for such vaccines in the United States and vaccine producers lack the facilities needed to produce them; (4) although the Army's current in-house capabilities are not sufficient to meet the demand for biological warfare vaccines, the Army could improve research and expand its research and development laboratories to meet vaccine production needs; and (5) the Army paid the contractor $5.5 million more in fees than applicable federal regulations permitted, by following cost principles for commercial organizations instead of those for nonprofit organizations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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