VA awards $2.8M contract for home delivery of prescription products to RGH Enterprises, LLC

Contract Overview

Contract Amount: $2,822,462 ($2.8M)

Contractor: RGH Enterprises, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $7.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HOME DELIVERY OF VISN PHARM PRESCRIBED PRODUCTS

Place of Performance

Location: TWINSBURG, SUMMIT County, OHIO, 44087

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.8 million to RGH ENTERPRISES, LLC for work described as: HOME DELIVERY OF VISN PHARM PRESCRIBED PRODUCTS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $2.8 million over one year indicates a significant investment in pharmaceutical logistics. 3. The fixed-price nature of the contract shifts performance risk to the contractor. 4. The award to RGH Enterprises, LLC, a single entity, requires scrutiny of their capacity and past performance. 5. The North American Industry Classification System (NAICS) code 339113 points to a specialized manufacturing and supply chain operation. 6. The contract duration of 364 days suggests a need for ongoing, consistent service delivery.

Value Assessment

Rating: fair

The contract value of $2.8 million for a one-year period for home delivery of prescription products appears to be within a reasonable range for such services, though specific benchmarks are not readily available without more granular data on the volume and types of products delivered. The fixed-price contract structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price is competitive. However, without comparative data on similar contracts or detailed cost breakdowns, a definitive assessment of value for money is challenging. The absence of a specific dollar amount for the base award versus options makes it harder to assess the initial commitment.

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 a competitive environment, which should theoretically lead to better pricing and service offerings for the government. The Department of Veterans Affairs utilized this approach, suggesting confidence in the market's ability to provide the required services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings through a robust bidding process, encouraging multiple vendors to offer their best prices and terms.

Public Impact

Veterans will benefit from the convenient and reliable home delivery of their prescribed pharmaceutical products. The service ensures timely access to medications, potentially improving health outcomes and adherence to treatment plans. The contract supports the Department of Veterans Affairs' mission to provide comprehensive healthcare services to its beneficiaries. Geographic impact is likely nationwide or within specific regions served by the VA facilities associated with this contract, ensuring broad access. The contract may have implications for the logistics and pharmaceutical supply chain workforce involved in delivery and fulfillment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits the assessment of competitive intensity.
The absence of detailed performance metrics makes it difficult to gauge the contractor's capacity and potential risks.
Limited information on the specific types and volumes of pharmaceutical products to be delivered hinders a precise value assessment.
The contractor's track record and past performance data are not detailed, posing a potential risk if not thoroughly vetted.
The fixed-price contract, while shifting risk, could lead to scope creep if not managed carefully.

Positive Signals

Awarded through full and open competition, suggesting a healthy market response.
The fixed-price contract structure incentivizes contractor efficiency and cost control.
The contract duration of nearly a full year indicates a stable, ongoing need for these services.
The Department of Veterans Affairs is leveraging established procurement processes to meet veteran needs.
The contract aims to improve healthcare access for veterans through home delivery, a positive service enhancement.

Sector Analysis

The pharmaceutical and medical supply industry is a significant sector within the federal procurement landscape, with substantial government spending aimed at ensuring access to healthcare products for beneficiaries. This contract for home delivery of prescription products falls within the broader category of healthcare logistics and supply chain management. Comparable spending benchmarks for similar services can vary widely based on the scope, volume, and specific product mix, but the $2.8 million annual value suggests a substantial operation. The NAICS code 339113, Surgical Appliance and Supplies Manufacturing, indicates a focus on the manufacturing and distribution aspects of medical supplies, which may include the packaging and preparation for delivery of pharmaceuticals.

Small Business Impact

The provided data indicates that small business set-aside was not utilized for this contract (ss: false, sb: false). This suggests that the contract was not specifically targeted towards small businesses, and RGH Enterprises, LLC, may be a larger entity or the competition did not yield a small business awardee. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless RGH Enterprises voluntarily engages small businesses as subcontractors. Further investigation into subcontracting goals would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs (VA) contracting officer and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through contract databases like SAM.gov, where award details are publicly available. However, the depth of public insight into day-to-day operational oversight is limited.

Related Government Programs

VA Pharmacy Benefits Management
DOD Pharmacy Operations
Federal Supply Schedule (FSS) Pharmaceutical Contracts
Medical Logistics Support Services
Home Healthcare Services

Risk Flags

Contractor performance history not detailed.
Specific metrics for service delivery and quality not provided.
Potential for supply chain disruptions impacting medication availability.
Limited insight into the competitive landscape beyond 'full and open'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.8 million to RGH ENTERPRISES, LLC. HOME DELIVERY OF VISN PHARM PRESCRIBED PRODUCTS

Who is the contractor on this award?

The obligated recipient is RGH ENTERPRISES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $2.8 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

What is the historical spending pattern for home delivery of prescription products by the Department of Veterans Affairs?

Analyzing historical spending for home delivery of prescription products by the VA is crucial for understanding trends, identifying potential cost efficiencies, and benchmarking current contract values. Without access to specific historical data for this exact service category, we can infer general trends in VA pharmaceutical spending. The VA consistently ranks as one of the largest federal purchasers of pharmaceuticals and related services. Spending in this area has likely seen an increase over the years due to factors such as an aging veteran population, advancements in medical treatments requiring ongoing medication, and a strategic push towards patient-centered care models that include home-based services. The COVID-19 pandemic may have also accelerated the adoption and utilization of home delivery services. A detailed analysis would require examining VA budget allocations and contract awards specifically related to pharmaceutical distribution and home delivery over the past 5-10 years to identify growth rates, fluctuations, and the impact of policy changes.

How does the awarded price compare to similar contracts for pharmaceutical home delivery services?

Benchmarking the $2.8 million contract value against similar contracts for pharmaceutical home delivery services is essential for assessing value for money. However, direct comparisons are challenging without detailed information on the scope, volume, geographic coverage, and specific services included in other contracts. Factors such as the types of medications (e.g., specialty drugs vs. standard prescriptions), the number of prescriptions processed, the delivery speed requirements, and the level of patient support offered can significantly influence pricing. Generally, larger contracts with broader reach and more complex logistics command higher overall values. If this contract covers a significant portion of the VA's prescription delivery needs or involves specialized handling, the $2.8 million may be justified. Conversely, if similar contracts with comparable service levels are awarded at lower price points, it could indicate potential overpricing or a less competitive bid environment for this specific award. A thorough comparison would necessitate accessing data from multiple VA or DoD contracts for similar services.

What is RGH Enterprises, LLC's track record with federal contracts, particularly with the VA?

Evaluating RGH Enterprises, LLC's track record with federal contracts, especially with the Department of Veterans Affairs, is a key component of risk assessment. Information available through federal procurement databases (like SAM.gov) can provide insights into their past performance, contract history, and any reported issues. A positive track record would include successful completion of previous contracts, adherence to delivery schedules and quality standards, and minimal disputes or performance deficiencies. Conversely, a history of contract terminations, significant performance failures, or unresolved claims could signal higher risk. Given that this is a substantial award, it is important to ascertain if RGH Enterprises has previously managed contracts of similar size and complexity, particularly in the pharmaceutical logistics or healthcare supply chain domain. Their experience with VA-specific regulations and systems would also be a significant factor in their ability to successfully execute this contract.

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

Several potential risks are associated with this contract for home delivery of prescription products. One primary risk is performance failure, where RGH Enterprises, LLC, may not meet delivery timelines, maintain product integrity (e.g., temperature control for certain medications), or ensure accurate order fulfillment, potentially impacting veteran health outcomes. Another risk involves supply chain disruptions, which could arise from unforeseen events like natural disasters, transportation issues, or manufacturer shortages, leading to medication stockouts. Financial risks could include cost overruns for the contractor, potentially leading to requests for contract modifications or reduced service quality if the fixed-price contract is not adequately managed. Mitigation strategies typically include robust oversight by the VA contracting officer, clear performance standards and metrics within the contract, regular performance reviews, contingency planning requirements for the contractor, and potentially performance bonds. The fixed-price nature itself acts as a mitigation for the government against cost escalation, placing that risk on the contractor.

How does this contract align with the VA's broader goals for improving veteran healthcare access and efficiency?

This contract directly aligns with the VA's strategic objectives to enhance healthcare access and improve the efficiency of service delivery for veterans. By facilitating the home delivery of prescription products, the VA aims to reduce barriers to medication adherence, particularly for veterans with mobility issues, those living in remote areas, or those who prefer the convenience of home-based services. This approach supports patient-centered care by bringing essential medical supplies directly to the veteran's doorstep, potentially leading to better health outcomes and increased patient satisfaction. Furthermore, optimizing pharmaceutical logistics through such contracts can contribute to overall healthcare system efficiency by streamlining distribution processes and potentially reducing administrative overhead associated with traditional pharmacy pick-ups. It reflects a broader trend in healthcare delivery towards leveraging technology and logistics to provide more accessible and convenient care solutions.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies 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: 1810 SUMMIT COMMERCE PK, TWINSBURG, OH, 44087

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

Financial Breakdown

Contract Ceiling: $2,822,462

Exercised Options: $2,822,462

Current Obligation: $2,822,462

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24419D0085

IDV Type: IDC

Timeline