VA awards $414K delivery order to UPS for pharmacy medications, highlighting courier services

Contract Overview

Contract Amount: $414,123 ($414.1K)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-01

End Date: 2026-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $378/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TASK ORDER FOR THE PHARMACY PRESCRIPTION MEDICATIONS FROM VAMC LEXINGTON FOR A FIVE ORDERING PERIODS

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40502

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $414,123.47 to UNITED PARCEL SERVICE CO. for work described as: TASK ORDER FOR THE PHARMACY PRESCRIPTION MEDICATIONS FROM VAMC LEXINGTON FOR A FIVE ORDERING PERIODS Key points: 1. The contract focuses on essential pharmacy prescription medications, indicating a critical need. 2. United Parcel Service (UPS) is the sole awardee, suggesting established delivery capabilities. 3. The award is for a 5-year period, indicating long-term reliance on this service. 4. The sector is couriers and express delivery services, crucial for healthcare logistics.

Value Assessment

Rating: good

The contract value of $414,123.47 over five years appears reasonable for dedicated delivery services. Benchmarking against similar contracts for medical supply delivery would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a limited competition scenario. This method may impact price discovery compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayer funds are utilized for essential medication delivery, ensuring veterans receive necessary prescriptions. The cost-effectiveness of the chosen competition method impacts the overall value for taxpayers.

Public Impact

Ensures timely delivery of vital prescription medications to veterans. Supports the operational efficiency of the VAMC Lexington pharmacy. Contributes to veteran healthcare access and satisfaction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may not yield the lowest possible price.
Reliance on a single vendor for a critical service.

Positive Signals

Awarded to a well-established and reputable delivery service provider.
Long-term contract ensures consistent service delivery.

Sector Analysis

The healthcare sector relies heavily on efficient logistics for medication delivery. This contract falls within the 'Couriers and Express Delivery Services' NAICS code, a critical component of healthcare supply chains.

Small Business Impact

This contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were considered or if opportunities were missed.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard oversight procedures for delivery services and medication logistics should be in place to ensure performance and accountability.

Related Government Programs

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

Risk Flags

Limited competition
Potential for price increases
Vendor dependency
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $414,123.47 to UNITED PARCEL SERVICE CO.. TASK ORDER FOR THE PHARMACY PRESCRIPTION MEDICATIONS FROM VAMC LEXINGTON FOR A FIVE ORDERING PERIODS

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 $414,123.47.

What is the period of performance?

Start: 2023-04-01. End: 2026-03-31.

What was the rationale for excluding other sources in the 'full and open competition after exclusion of sources' method?

The rationale for excluding other sources typically involves specific technical requirements, existing infrastructure compatibility, or unique service needs that only a particular vendor can meet. Without further details, it's difficult to ascertain the precise justification, but it implies a belief that only UPS could fulfill the contract's specific demands at the time of award.

How does the per-unit delivery cost compare to industry benchmarks for similar healthcare logistics contracts?

A precise per-unit delivery cost benchmark is not available without more granular data on the number of deliveries and their average distance. However, the total contract value of $414,123.47 over five years for pharmacy prescription medications suggests a significant volume. Comparing this to industry averages for last-mile delivery in healthcare logistics would be necessary to assess cost-effectiveness.

What are the potential risks associated with relying on a single vendor for medication delivery over a five-year period?

The primary risks include service disruptions due to UPS operational issues, potential price increases in future years if not locked in, and a lack of competitive pressure to innovate or improve service. Contingency plans and performance monitoring are crucial to mitigate these risks and ensure uninterrupted delivery of essential medications to veterans.

Industry Classification

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

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

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: $574,923

Exercised Options: $414,123

Current Obligation: $414,123

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline