VA awards $2.56M contract for pharmacy delivery services to United Parcel Service

Contract Overview

Contract Amount: $2,555,492 ($2.6M)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COURIER AND DELIVERY SERVICE-PHARMACY DEPARTMENT

Place of Performance

Location: BILOXI, HARRISON County, MISSISSIPPI, 39531

State: Mississippi Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.6 million to UNITED PARCEL SERVICE CO. for work described as: COURIER AND DELIVERY SERVICE-PHARMACY DEPARTMENT Key points: 1. Contract awarded to incumbent United Parcel Service (UPS) for pharmacy delivery. 2. Spending is within the typical range for courier and delivery services. 3. Potential risk of overpayment due to lack of robust competition. 4. IT sector is not applicable; this falls under general services.

Value Assessment

Rating: fair

The contract's pricing is a firm fixed price, which offers some predictability. However, without a competitive benchmark or detailed cost breakdown, it's difficult to assess if the $2.56 million is optimal compared to similar pharmacy delivery contracts.

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 approach may not have yielded the most competitive pricing, potentially impacting price discovery.

Taxpayer Impact: Taxpayers may be paying a premium if the limited competition prevented a lower price from being achieved through a broader bidding process.

Public Impact

Ensures timely delivery of pharmaceuticals to VA patients. Supports the operational needs of the VA pharmacy department. Relies on a single vendor for a critical service.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs.
Reliance on a single vendor for essential services.

Positive Signals

Ensures continuity of pharmaceutical delivery.
Fixed price contract provides budget certainty.

Sector Analysis

This contract falls under general government services, specifically courier and delivery. Spending benchmarks for this sector vary widely based on volume, distance, and service level. The $2.56 million for a one-year delivery order is substantial but needs context regarding the scope of services provided.

Small Business Impact

The data does not indicate any specific provisions or considerations for small businesses in this contract award. The award went to a large corporation, United Parcel Service.

Oversight & Accountability

The contract was awarded by the Department of Veterans Affairs, which has established oversight mechanisms. However, the limited competition aspect warrants scrutiny to ensure accountability and value for taxpayer money.

Related Government Programs

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

Risk Flags

Limited competition
Potential for non-competitive pricing
Vendor lock-in
Lack of transparency in source exclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.6 million to UNITED PARCEL SERVICE CO.. COURIER AND DELIVERY SERVICE-PHARMACY DEPARTMENT

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 $2.6 million.

What is the period of performance?

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

What was the justification for excluding other sources during the competition phase?

The justification for excluding other sources is crucial for understanding the limited competition. If the exclusion was based on specific technical requirements or past performance, it might be justifiable. However, if it was an administrative decision, it raises concerns about whether the VA explored all avenues to secure the best possible price and service.

How does the per-delivery cost compare to industry averages for similar pharmaceutical logistics?

Benchmarking the per-delivery cost against industry averages for pharmaceutical logistics is essential for assessing value. Without this data, it's difficult to determine if the $2.56 million contract represents a fair price. Factors like delivery volume, geographic coverage, and required delivery speed would need to be considered for an accurate comparison.

What are the contingency plans if United Parcel Service fails to meet delivery obligations?

Given the reliance on a single vendor for critical pharmaceutical deliveries, contingency planning is paramount. The VA should have clear protocols and alternative arrangements in place should UPS falter. This includes understanding the penalties outlined in the contract and having pre-identified backup delivery services ready to be activated to prevent disruptions.

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: 2

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: $2,555,492

Exercised Options: $2,555,492

Current Obligation: $2,555,492

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline