HHS's Indian Health Service awards $250K contract for pharmaceutical supplies to McKesson Corporation

Contract Overview

Contract Amount: $250,000 ($250.0K)

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2026-03-24

End Date: 2027-08-23

Contract Duration: 517 days

Daily Burn Rate: $484/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73114

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $250,000 to MCKESSON CORPORATION for work described as: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS. Key points: 1. McKesson Corporation, a major player, dominates the pharmaceutical distribution market. 2. The contract is competed under SAP, suggesting a streamlined procurement process. 3. Potential risks include price volatility in the pharmaceutical market and supply chain disruptions. 4. Spending falls within the Drugs and Druggists' Sundries Merchant Wholesalers sector.

Value Assessment

Rating: good

The contract value of $250,000 is relatively small. Benchmarking against similar open market purchases for pharmaceutical supplies is difficult without more specific data on the exact items procured. However, the firm fixed price contract suggests price certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP (Simplified Acquisition Procedures), indicating it was likely a competitive process among eligible vendors. This method aims for efficiency in smaller procurements, but the extent of price discovery may be less rigorous than full and open competition.

Taxpayer Impact: The direct taxpayer impact is limited due to the relatively small contract value. The IHS aims to provide essential pharmaceutical supplies, ensuring value for taxpayer dollars spent on healthcare for Native Americans.

Public Impact

Ensures availability of essential medications for IHS customers. Supports healthcare services for Native American communities. Leverages existing procurement systems for efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 48 / 10

Warning Flags

Potential for price increases in pharmaceutical market
Reliance on a single large supplier

Positive Signals

Streamlined procurement process via SAP
Firm fixed price contract provides cost certainty

Sector Analysis

This contract falls under the Drugs and Druggists' Sundries Merchant Wholesalers sector, a critical component of the healthcare supply chain. Spending benchmarks for pharmaceutical supplies vary widely based on the specific drugs and quantities, but this $250,000 award appears to be for routine operational needs.

Small Business Impact

The data indicates this contract was awarded to McKesson Corporation, a large, established company. There is no specific indication of small business participation in this particular award, which is common for specialized supply contracts in this sector.

Oversight & Accountability

The contract is managed by the Indian Health Service (IHS), a federal agency responsible for providing healthcare to American Indians and Alaska Natives. Oversight would involve monitoring delivery, quality, and adherence to contract terms to ensure taxpayer funds are used effectively.

Related Government Programs

Drugs and Druggists' Sundries Merchant Wholesalers
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Market volatility in pharmaceutical pricing
Potential supply chain disruptions
Limited competition due to specialized nature of supplies
Dependence on a single large supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $250,000 to MCKESSON CORPORATION. PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $250,000.

What is the period of performance?

Start: 2026-03-24. End: 2027-08-23.

What specific pharmaceutical items are included in this contract, and how do their prices compare to market averages?

The provided data does not specify the exact pharmaceutical items procured under this contract. To assess value accurately, a detailed list of the drugs and sundries is needed. Comparing prices against market averages for these specific items would reveal if the $250,000 award represents a fair market price or if there's potential for cost savings through negotiation or alternative sourcing.

What are the primary risks associated with relying on McKesson Corporation for these pharmaceutical supplies?

The primary risks include potential supply chain disruptions affecting McKesson's ability to deliver, price increases due to market fluctuations or McKesson's pricing power, and a lack of immediate alternatives if issues arise. While McKesson is a reliable supplier, dependence on a single large entity can create vulnerabilities that require proactive risk mitigation strategies from the IHS.

How effectively does this contract support the IHS's mission of providing healthcare to its customers?

This contract is crucial for ensuring the consistent availability of necessary pharmaceutical supplies, directly supporting the IHS's mission. By securing these supplies, the IHS can maintain essential healthcare services for its beneficiaries. The firm fixed price and competitive SAP process suggest an effort towards efficient resource allocation for this critical function.

Industry Classification

NAICS: Wholesale Trade › Drugs and Druggists' Sundries Merchant Wholesalers › Drugs and Druggists' Sundries Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6535 STATE HIGHWAY 161, IRVING, TX, 75039

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

Financial Breakdown

Contract Ceiling: $250,000

Exercised Options: $250,000

Current Obligation: $250,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75H71122A00161

IDV Type: BPA

Timeline