DoD's $33.5M Express Scripts Contract for Pharmacy Benefits Management Awarded via Full and Open Competition

Contract Overview

Contract Amount: $33,536,883 ($33.5M)

Contractor: Express Scripts Inc

Awarding Agency: Department of Defense

Start Date: 2014-05-01

End Date: 2017-04-30

Contract Duration: 1,095 days

Daily Burn Rate: $30.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF TPHARM4 TASK ORDER 0001

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63121

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to EXPRESS SCRIPTS INC for work described as: IGF::OT::IGF TPHARM4 TASK ORDER 0001 Key points: 1. Contract value of $33.5 million over 3 years. 2. Awarded to Express Scripts Inc., a major player in pharmacy benefit management. 3. Competition was full and open, suggesting potential for competitive pricing. 4. Sector is healthcare, specifically direct health and medical insurance carriers.

Value Assessment

Rating: good

The contract value of $33.5 million for a 3-year period appears reasonable for pharmacy benefit management services. Benchmarking against similar large-scale contracts would provide a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to more competitive pricing. The price discovery process likely benefited from this competitive environment.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that drives down costs and improves service quality.

Public Impact

Ensures access to prescription drugs for military personnel and their families. Supports the Defense Health Agency's mission to provide healthcare services. Impacts the pharmaceutical supply chain and related insurance carriers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Full and open competition
Established contractor
Clear contract type (Firm Fixed Price)

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on pharmacy benefit management. Spending in this area is substantial across the federal government, supporting healthcare delivery and drug accessibility.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large corporation, Express Scripts Inc. There is no indication of small business participation in this specific award.

Oversight & Accountability

The contract was awarded by the Department of Defense through the Defense Health Agency. Standard oversight mechanisms for federal contracts would apply, including performance monitoring and financial audits.

Related Government Programs

Direct Health and Medical Insurance Carriers
Department of Defense Contracting
Defense Health Agency Programs

Risk Flags

Potential for vendor lock-in if not managed carefully.
Reliance on a single large provider for critical pharmacy services.
Complexity of managing pharmaceutical costs and supply chains.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to EXPRESS SCRIPTS INC. IGF::OT::IGF TPHARM4 TASK ORDER 0001

Who is the contractor on this award?

The obligated recipient is EXPRESS SCRIPTS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $33.5 million.

What is the period of performance?

Start: 2014-05-01. End: 2017-04-30.

What is the specific scope of pharmacy services covered under this contract?

The contract is for pharmacy benefit management, which typically includes negotiating drug prices, managing pharmacy networks, processing prescription claims, and implementing drug utilization review programs. Specific details would be outlined in the task order's statement of work.

How does the firm fixed price structure mitigate cost overruns?

A firm fixed price contract establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. This shifts the risk of cost overruns to the contractor, providing predictability for the government and incentivizing efficient performance.

What performance metrics are used to evaluate Express Scripts Inc.'s effectiveness?

Performance metrics likely include measures of drug cost savings, network adequacy, claims processing accuracy, patient satisfaction, and adherence to formulary requirements. The Defense Health Agency would monitor these against established benchmarks.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT940213R0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Priority Healthcare Distribution Inc. (UEI: 078461979)

Address: 1 EXPRESS WAY, SAINT LOUIS, MO, 63121

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,536,883

Exercised Options: $33,536,883

Current Obligation: $33,536,883

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT940214D0002

IDV Type: IDC

Timeline