DOJ awards $4.5M to McKesson for inmate pharmaceuticals at FMC Fort Worth

Contract Overview

Contract Amount: $4,486,860 ($4.5M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Justice

Start Date: 2025-12-31

End Date: 2026-09-30

Contract Duration: 273 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MCKESSON PHARMACEUTICALS FOR INMATES AT FMC FORT WORTH

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76119

State: Texas Government Spending

Plain-Language Summary

Department of Justice obligated $4.5 million to MCKESSON CORPORATION for work described as: MCKESSON PHARMACEUTICALS FOR INMATES AT FMC FORT WORTH Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 273 days indicates a short-term need for pharmaceutical supplies. 3. The firm-fixed-price contract type helps manage cost certainty for the government. 4. This award is a delivery order, likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The specific location (FMC Fort Worth) highlights localized service delivery within the Bureau of Prisons. 6. The contractor, McKesson Corporation, is a major player in pharmaceutical distribution.

Value Assessment

Rating: good

The contract value of approximately $4.5 million for a 273-day period for pharmaceutical supplies to a federal correctional facility appears reasonable. Benchmarking against similar contracts for inmate healthcare services is challenging without more specific data on the volume and types of pharmaceuticals required. However, McKesson is a large, established supplier, and the firm-fixed-price structure provides cost predictability. The value seems aligned with the expected needs of a facility of this size.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters price discovery and allows the government to select the most advantageous offer. The use of full and open competition suggests a healthy market for pharmaceutical supply services to federal correctional facilities.

Taxpayer Impact: Taxpayers benefit from the competitive process, which is intended to drive down costs and ensure the government receives fair market value for essential inmate healthcare supplies.

Public Impact

Inmates at FMC Fort Worth will receive necessary pharmaceutical medications. The Bureau of Prisons ensures the continuity of healthcare services for its population. The contract supports the operational readiness of a federal correctional institution. This award contributes to the pharmaceutical supply chain within the Texas region. The contract indirectly supports jobs within the pharmaceutical distribution and logistics sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single large supplier could pose supply chain risks.
Ensuring adequate inventory management to prevent stockouts or overstocking.

Positive Signals

Award to a well-established pharmaceutical distributor with a proven track record.
Firm-fixed-price contract provides budget certainty.
Competition ensures a baseline level of market-driven pricing.

Sector Analysis

The pharmaceutical manufacturing and distribution sector is a critical component of the healthcare industry, characterized by large, established players like McKesson. Federal agencies, particularly those managing large populations like the Bureau of Prisons, are significant consumers of pharmaceuticals. Spending in this area is driven by inmate health needs and public health mandates. This contract fits within the broader federal strategy to ensure healthcare access for incarcerated individuals.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of pharmaceutical distribution and the scale of operations required, it is common for such contracts to be awarded to large, established corporations. There is no explicit information on subcontracting opportunities for small businesses within this specific award, but McKesson's broader operations may involve small business suppliers.

Oversight & Accountability

The Bureau of Prisons, as part of the Department of Justice, is subject to various oversight mechanisms. This includes internal audits, potential reviews by the DOJ Office of the Inspector General, and compliance with federal procurement regulations. Transparency is generally maintained through contract databases like FPDS. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight compared to cost-reimbursement contracts.

Related Government Programs

Federal Prison System Healthcare Services
Bureau of Prisons Pharmaceutical Contracts
Inmate Medical Care Contracts
Department of Justice Pharmacy Services

Risk Flags

Potential for drug shortages impacting supply continuity.
Price fluctuations in the pharmaceutical market.
Ensuring compliance with all relevant pharmaceutical regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $4.5 million to MCKESSON CORPORATION. MCKESSON PHARMACEUTICALS FOR INMATES AT FMC FORT WORTH

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 $4.5 million.

What is the period of performance?

Start: 2025-12-31. End: 2026-09-30.

What is McKesson Corporation's track record with the federal government, specifically the Bureau of Prisons?

McKesson Corporation is a major pharmaceutical distributor that has a long-standing relationship with various government agencies, including the Department of Defense and the Department of Veterans Affairs, as well as the Bureau of Prisons. They frequently secure contracts for the supply of pharmaceuticals and medical supplies. Historical data indicates McKesson has been a primary supplier for many federal correctional facilities over the years, often through large IDIQ contracts or individual delivery orders. Their extensive distribution network and established presence make them a common awardee for such requirements. While specific performance metrics for this exact contract are not yet available, their general track record with the government is one of consistent supply, though like any large contractor, they may have faced scrutiny on pricing or delivery in specific instances over their long history.

How does the value of this contract compare to similar pharmaceutical supply contracts for federal correctional facilities?

Comparing the value of this $4.5 million contract for a 273-day period requires context on the inmate population size and specific pharmaceutical needs of FMC Fort Worth. Federal correctional facilities vary significantly in size and healthcare complexity. However, this value appears to be within a typical range for supplying a medium-to-large federal prison for a period of less than a year. Larger facilities or those with specialized medical units might see higher annual spending. McKesson, as a primary supplier, often holds contracts across multiple facilities, and the total value of their federal pharmaceutical business is substantial. Without access to a direct benchmark of per-inmate pharmaceutical spending across the BOP, a precise comparison is difficult, but the award size is not an outlier for this type of service.

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

The primary risks associated with this contract include potential supply chain disruptions (e.g., drug shortages, transportation issues), price volatility for pharmaceuticals, and ensuring the quality and appropriateness of medications supplied. McKesson, being a large, established distributor, generally has robust supply chain management and quality control processes. The firm-fixed-price contract mitigates the risk of cost overruns for the government if prices were to increase unexpectedly during the contract period. The Bureau of Prisons likely has contingency plans and may monitor inventory levels closely. Furthermore, the contract's relatively short duration (273 days) limits the exposure to long-term market fluctuations or supplier performance issues. The competitive award process also helps ensure the selection of a reliable provider.

What is the expected effectiveness of this contract in meeting the healthcare needs of FMC Fort Worth inmates?

This contract is expected to be highly effective in meeting the basic pharmaceutical needs of inmates at FMC Fort Worth. McKesson's role as a major distributor ensures access to a wide range of medications required for common illnesses, chronic conditions, and acute medical issues encountered within a correctional setting. The firm-fixed-price structure incentivizes McKesson to efficiently manage its supply chain to meet the BOP's demands within the agreed-upon price. The effectiveness hinges on McKesson's ability to consistently deliver the correct medications on time and in the required quantities, which is a core competency for large distributors. The Bureau of Prisons' medical staff will oversee the proper dispensing and administration of these medications.

How has federal spending on pharmaceuticals for correctional facilities evolved over time?

Federal spending on pharmaceuticals for correctional facilities has generally trended upwards over the past two decades, driven by several factors. These include an aging inmate population with more chronic health conditions, increased utilization of more advanced and often more expensive medications, and a growing emphasis on providing healthcare standards comparable to the community. The Bureau of Prisons, like other large healthcare providers, faces challenges in managing pharmaceutical costs while ensuring comprehensive care. Contracts for pharmaceutical supplies are a significant portion of the BOP's healthcare budget. While specific year-over-year spending data for FMC Fort Worth isn't detailed here, the overall trend for the BOP indicates a sustained and significant investment in inmate pharmaceutical needs, often utilizing large-scale contracts with major distributors like McKesson.

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: $4,486,860

Exercised Options: $4,486,860

Current Obligation: $4,486,860

Actual Outlays: $1,407,310

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