DOJ awards $300K for inmate healthcare medications, with McKesson Corporation as the contractor

Contract Overview

Contract Amount: $300,000 ($300.0K)

Contractor: Mckesson Corporation

Awarding Agency: Department of Justice

Start Date: 2026-04-01

End Date: 2026-06-30

Contract Duration: 90 days

Daily Burn Rate: $3.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY26 B1 MCKESSON MEDICATION QTR 3 MEDICATION FOR INMATE HEALTHCARE

Place of Performance

Location: MARION, WILLIAMSON County, ILLINOIS, 62959

State: Illinois Government Spending

Plain-Language Summary

Department of Justice obligated $300,000 to MCKESSON CORPORATION for work described as: FY26 B1 MCKESSON MEDICATION QTR 3 MEDICATION FOR INMATE HEALTHCARE Key points: 1. Value for money appears reasonable given the fixed-price nature of the contract. 2. Competition dynamics indicate a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators are low due to the firm fixed-price contract type and short duration. 4. Performance context is for inmate healthcare, a critical service within correctional facilities. 5. Sector positioning is within pharmaceutical preparation manufacturing for healthcare services.

Value Assessment

Rating: good

The contract value of $300,000 for a 90-day period for medication supply seems aligned with market rates for correctional healthcare. Benchmarking against similar contracts for inmate pharmaceutical needs would provide further validation, but the firm fixed-price structure generally promotes cost control. The awarded amount is within the expected range for such services, indicating fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method typically fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open nature of the competition is a positive indicator for price discovery.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the most advantageous pricing and terms for the government, thereby optimizing the use of public funds for essential inmate healthcare.

Public Impact

Inmates within the Federal Prison System will receive necessary medications. The services delivered are critical pharmaceutical supplies for healthcare. The geographic impact is primarily within Illinois, where the contract is being performed. Workforce implications are minimal, likely involving McKesson's existing distribution and logistics network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting medication availability.
Ensuring consistent quality and efficacy of pharmaceuticals provided.

Positive Signals

Contract awarded to a large, established pharmaceutical supplier.
Firm fixed-price contract provides cost certainty.
Short contract duration limits long-term exposure to price fluctuations.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a significant part of the healthcare industry, providing essential drugs and medical supplies. Federal spending in this area supports public health initiatives, including correctional healthcare. This contract represents a small portion of overall federal pharmaceutical spending, which is often dominated by larger contracts for broader healthcare programs or defense medical supplies. Benchmarks for similar correctional facility medication contracts would be valuable for detailed analysis.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of pharmaceutical supply, it is likely that larger, established companies like McKesson are best positioned to fulfill such requirements. There is no explicit information on subcontracting plans, but it is unlikely to involve significant subcontracting to small businesses for the core medication supply.

Oversight & Accountability

Oversight for this contract would fall under the Federal Prison System's procurement and healthcare management divisions. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified medications. Transparency is generally maintained through federal procurement databases, though specific performance metrics and IG oversight details are not provided in this summary.

Related Government Programs

Federal Prison System Healthcare Contracts
Pharmaceutical Supply Chain Management
Inmate Medical Services
Department of Justice Procurement

Risk Flags

Supply Chain Vulnerability
Quality Assurance of Pharmaceuticals
Contractor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $300,000 to MCKESSON CORPORATION. FY26 B1 MCKESSON MEDICATION QTR 3 MEDICATION FOR INMATE HEALTHCARE

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $300,000.

What is the period of performance?

Start: 2026-04-01. End: 2026-06-30.

What is McKesson Corporation's track record with federal contracts, particularly for correctional facilities?

McKesson Corporation is a major healthcare company with a long history of federal contracting. They frequently supply pharmaceuticals and medical supplies to various government agencies, including the Department of Defense and the Department of Veterans Affairs, as well as correctional systems. Their track record generally indicates experience in large-scale distribution and compliance with government regulations. However, specific performance details, past issues, or commendations related to correctional facility contracts would require a deeper dive into contract databases and performance reviews. Given their size and market presence, they are a common awardee for such requirements.

How does the awarded price of $300,000 for 90 days compare to similar inmate healthcare medication contracts?

Without specific comparable contract data, a precise comparison is difficult. However, $300,000 for a 90-day supply of medications for a correctional facility suggests an average daily cost of approximately $3,333. This figure needs to be contextualized by the inmate population size, the types of medications required (e.g., generics vs. specialized drugs), and the specific facility's needs. Generally, firm fixed-price contracts aim for competitive pricing, and this amount appears within a plausible range for a medium-sized facility or a specific subset of medication needs. A more robust analysis would involve benchmarking against contracts with similar scope, duration, and patient populations.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks include potential supply chain disruptions that could lead to medication shortages, and ensuring the consistent quality and efficacy of the pharmaceuticals provided. These risks are mitigated by the contract being awarded to a large, established supplier like McKesson, which typically has robust supply chain management and quality control processes. The firm fixed-price nature also incentivizes the contractor to manage these risks effectively to maintain profitability. Furthermore, the short duration of the contract (90 days) limits the government's exposure to prolonged disruptions or quality issues, allowing for reassessment and potential re-competition if problems arise.

How effective is the Federal Prison System in managing pharmaceutical procurement to ensure value and timely delivery?

The Federal Prison System (FPS) manages pharmaceutical procurement through various mechanisms, including competitive bidding processes and established supply agreements. Their effectiveness is generally assessed through contract performance monitoring, audits, and the ability to maintain adequate medication supplies for inmate health. While specific metrics on FPS's overall effectiveness in pharmaceutical procurement are not readily available in this context, the system relies on established procurement regulations and oversight bodies. The use of firm fixed-price contracts and full and open competition, as seen here, are standard practices aimed at ensuring value and timely delivery. Challenges can arise from complex supply chains and fluctuating healthcare needs within the inmate population.

What has been the historical spending pattern for inmate healthcare medications by the Bureau of Prisons?

Historical spending patterns for inmate healthcare medications by the Bureau of Prisons (BOP) have generally shown consistent demand, reflecting the ongoing healthcare needs of the incarcerated population. Spending fluctuates based on factors such as inmate population size, the prevalence of chronic diseases, and the introduction of new or more expensive treatments. The BOP typically utilizes a mix of contract types, including full and open competition and potentially other methods for specialized needs. Analyzing historical data would reveal trends in average contract values, the number of awards, and the primary contractors involved. This specific $300,000 award represents a single delivery order, likely part of a larger, ongoing procurement strategy for pharmaceutical supplies.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6555 STATE HIGHWAY 161, IRVING, TX, 75039

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

Financial Breakdown

Contract Ceiling: $300,000

Exercised Options: $300,000

Current Obligation: $300,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36W79720D0001

IDV Type: IDC

Timeline