VA Awards $30.5M Pharmacy Benefit Management Contract to OptumRx for February 2025

Contract Overview

Contract Amount: $30,455,128 ($30.5M)

Contractor: Optumrx Administrative Services, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-02-01

End Date: 2025-02-28

Contract Duration: 27 days

Daily Burn Rate: $1.1M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EXPRESS REPORT: PBM FEB 2025

Place of Performance

Location: GOLDEN, JEFFERSON County, COLORADO, 80401

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $30.5 million to OPTUMRX ADMINISTRATIVE SERVICES, LLC for work described as: EXPRESS REPORT: PBM FEB 2025 Key points: 1. The contract is for Pharmacy Benefit Management services. 2. OptumRx Administrative Services, LLC is the awardee. 3. The contract was awarded under full and open competition. 4. This is a single delivery order with a short duration. 5. The total value is approximately $30.5 million.

Value Assessment

Rating: good

The contract value of $30.5 million for a one-month period suggests a significant but potentially variable need for PBM services. Benchmarking against similar short-term, high-value PBM contracts would be necessary for a precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award was made under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair value.

Taxpayer Impact: The competitive nature of the award is expected to yield a fair price for the PBM services, benefiting taxpayers by avoiding inflated costs.

Public Impact

Veterans will continue to receive essential pharmacy benefit management services. The short duration suggests a specific, immediate need or a bridge to a longer-term solution. OptumRx's role ensures efficient prescription drug processing and cost control for the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration may indicate a temporary need or potential for future re-competition.
Lack of detailed performance metrics in the provided data.
Potential for price fluctuations in subsequent, longer-term contracts.

Positive Signals

Awarded through full and open competition.
Clear awardee and agency.
Fixed price contract type provides cost certainty.

Sector Analysis

Pharmacy Benefit Management falls under administrative services for insurance and pension funds. Spending in this sector can vary widely based on the number of beneficiaries and the scope of services provided, but consistent, competitive contracting is key.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. As a large administrative service contract, it is likely that larger companies dominate this space, but subcontracting opportunities may exist.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms should ensure proper execution and accountability.

Related Government Programs

Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Short contract duration.
Limited performance data provided.
Potential for price escalation in future contracts.
Dependence on a single vendor for a critical service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $30.5 million to OPTUMRX ADMINISTRATIVE SERVICES, LLC. EXPRESS REPORT: PBM FEB 2025

Who is the contractor on this award?

The obligated recipient is OPTUMRX ADMINISTRATIVE SERVICES, 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 $30.5 million.

What is the period of performance?

Start: 2025-02-01. End: 2025-02-28.

What is the projected cost per prescription or per member per month for this contract?

Without specific utilization data or a breakdown of the $30.5 million total award, calculating a precise cost per prescription or per member per month is not possible. This figure would typically be derived from the number of prescriptions processed or the number of beneficiaries served during the contract period, which are not provided in the summary data.

What are the key performance indicators (KPIs) for this contract, and how will OptumRx's performance be measured?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, PBM contracts include metrics related to drug cost savings, formulary management, claims processing efficiency, and member satisfaction. The VA's contract oversight would involve monitoring these KPIs to ensure OptumRx meets performance expectations.

Given the short, one-month duration, is this contract intended to bridge a gap until a new, longer-term contract is awarded?

The short, one-month duration strongly suggests this delivery order is a bridge contract. It likely serves to maintain essential pharmacy benefit management services without interruption while the VA completes a more comprehensive procurement process for a longer-term solution, potentially with different or expanded scope.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 11000 OPTUM CIR, EDEN PRAIRIE, MN, 55344

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

Financial Breakdown

Contract Ceiling: $30,455,128

Exercised Options: $30,455,128

Current Obligation: $30,455,128

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79124D0011

IDV Type: IDC

Timeline