VA Awards UPS $155M Contract for Pharmacy Delivery Services Through Full and Open Competition

Contract Overview

Contract Amount: $155,004 ($155.0K)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-16

End Date: 2027-04-15

Contract Duration: 364 days

Daily Burn Rate: $426/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UPS PHARMACY DELIVERY SERVICE

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27705

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $155,004 to UNITED PARCEL SERVICE CO. for work described as: UPS PHARMACY DELIVERY SERVICE Key points: 1. Significant contract value of $155 million for essential pharmacy delivery. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk appears moderate given the established nature of the service provider. 4. The IT and Logistics sector is crucial for efficient government operations.

Value Assessment

Rating: good

The contract's firm fixed-price structure provides cost certainty. Benchmarking against similar large-scale delivery contracts would offer further insight into its value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources, indicating a robust price discovery process. This method generally leads to more competitive pricing.

Taxpayer Impact: Competitive bidding is expected to yield fair pricing, maximizing taxpayer value for essential pharmacy delivery services.

Public Impact

Ensures timely and reliable delivery of prescription medications to veterans. Supports the Department of Veterans Affairs' mission to provide healthcare services. Leverages a major logistics provider to reach a wide geographic area.

Waste & Efficiency Indicators

Waste Risk Score: 100 / 10

Warning Flags

Potential for service disruptions if UPS faces operational issues.
Dependence on a single provider for a critical service.

Positive Signals

Established logistics network ensures broad reach.
Firm fixed-price contract provides budget predictability.

Sector Analysis

This contract falls within the logistics and courier services sector, essential for government operations. Benchmarks for similar delivery contracts vary widely based on volume and geographic scope.

Small Business Impact

The contract was awarded to a large corporation, with no specific indication of small business participation in this award. Further analysis would be needed to determine subcontracting opportunities.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard oversight mechanisms for delivery services and performance metrics should be in place.

Related Government Programs

Couriers and Express Delivery Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for service disruptions.
Dependence on a single large vendor.
Limited visibility into specific small business subcontracting.
Geographic scope may present logistical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $155,004 to UNITED PARCEL SERVICE CO.. UPS PHARMACY DELIVERY SERVICE

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

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 $155,004.

What is the period of performance?

Start: 2026-04-16. End: 2027-04-15.

What is the expected impact on delivery times and reliability for veterans under this contract?

Given UPS's extensive logistics network and experience, the contract is expected to maintain or improve delivery times and reliability for veterans' prescriptions. The firm fixed-price structure incentivizes UPS to meet performance standards to ensure efficient operations and customer satisfaction, thereby supporting the VA's healthcare mission.

What are the primary risks associated with relying on UPS for pharmacy delivery, and how are they mitigated?

Primary risks include potential service disruptions due to UPS operational issues (e.g., labor disputes, weather) and over-reliance on a single vendor. Mitigation strategies likely involve performance clauses in the contract, contingency planning by the VA, and potentially backup delivery options for critical medications.

How does this contract contribute to the overall effectiveness of the VA's pharmacy program?

This contract is crucial for the VA's pharmacy program effectiveness by ensuring that veterans receive their medications reliably and efficiently. It allows the VA to focus on clinical aspects of pharmacy care while outsourcing the complex logistics of delivery, ultimately enhancing patient access to necessary treatments.

Industry Classification

NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1400 N HURSTBOURNE PKWY, LOUISVILLE, KY, 40223

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

Financial Breakdown

Contract Ceiling: $155,004

Exercised Options: $155,004

Current Obligation: $155,004

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline