KEMSA MCP Contract Exceeds $509M for Medical Commodities, Awarded Sole-Source

Contract Overview

Contract Amount: $509,539,555 ($509.5M)

Contractor: Kenya Medical Supplies Author ITY

Awarding Agency: Agency for International Development

Start Date: 2015-09-25

End Date: 2024-07-09

Contract Duration: 3,210 days

Daily Burn Rate: $158.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: IGF::CL::IGFKEMSA MEDICAL COMMODITIES PROGRAM (KEMSA MCP)

Plain-Language Summary

Agency for International Development obligated $509.5 million to KENYA MEDICAL SUPPLIES AUTHOR ITY for work described as: IGF::CL::IGFKEMSA MEDICAL COMMODITIES PROGRAM (KEMSA MCP) Key points: 1. Significant spending on medical commodities through a sole-source contract. 2. Contract duration is extensive, spanning over 8 years. 3. Lack of competition raises concerns about price discovery and value for money. 4. The sector is critical for public health, making oversight paramount.

Value Assessment

Rating: questionable

The contract's cost-plus award fee structure, combined with a sole-source award, makes direct pricing comparisons difficult. Without competitive bidding, it's challenging to ascertain if the pricing reflects fair market value for the medical commodities procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to achieve the lowest possible price.

Taxpayer Impact: The sole-source nature of this large contract may result in suboptimal pricing, potentially increasing the financial burden on taxpayers for essential medical supplies.

Public Impact

Ensures availability of critical medical commodities for public health programs. Potential for inflated costs due to lack of competition impacts healthcare budget. Long-term nature of the contract may hinder adoption of newer, more cost-effective solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus award fee structure
Long contract duration

Positive Signals

Addresses critical need for medical commodities
Long-term commitment ensures supply chain stability

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically related to the procurement and distribution of medical commodities. Spending benchmarks for such specialized services can vary widely, but the scale and sole-source nature here warrant scrutiny.

Small Business Impact

The provided data does not indicate any specific provisions or participation by small businesses in this contract. Further analysis would be needed to determine if small businesses had opportunities to participate or benefit.

Oversight & Accountability

The sole-source award and cost-plus fee structure necessitate robust oversight to ensure funds are used efficiently and effectively. Transparency in performance metrics and cost justifications is crucial for accountability.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Agency for International Development Contracting
Agency for International Development Programs

Risk Flags

Lack of competition
Potential for overpricing
Limited transparency in pricing
Long contract duration may stifle innovation
Cost-plus award fee structure can be complex to oversee

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $509.5 million to KENYA MEDICAL SUPPLIES AUTHOR ITY. IGF::CL::IGFKEMSA MEDICAL COMMODITIES PROGRAM (KEMSA MCP)

Who is the contractor on this award?

The obligated recipient is KENYA MEDICAL SUPPLIES AUTHOR ITY.

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $509.5 million.

What is the period of performance?

Start: 2015-09-25. End: 2024-07-09.

What was the justification for awarding this contract sole-source, and how was the pricing determined to be fair and reasonable?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without this specific justification, it's difficult to assess the fairness of the pricing. A thorough review of the contract file and any pre-award surveys would be necessary to understand the rationale and the process used to establish a fair and reasonable price, especially given the cost-plus award fee structure.

What are the key performance indicators (KPIs) for this contract, and how are they being monitored to ensure value for taxpayer money?

Key performance indicators for a medical commodities contract would likely include delivery timeliness, product quality, stock availability, and adherence to specifications. Monitoring these KPIs is crucial, especially with a cost-plus award fee structure, to ensure the contractor is meeting performance targets and that the award fee is justified. Regular performance reviews and audits by the Agency for International Development are essential for accountability.

How does the cost-plus award fee structure incentivize efficiency and cost savings for the government in this sole-source contract?

A cost-plus award fee (CPAF) structure aims to incentivize contractor performance by allowing reimbursement of allowable costs plus a fee that is composed of a base fee and an award amount. The award amount is typically tied to meeting or exceeding specific performance objectives. However, in a sole-source context, the effectiveness of this incentive in driving down costs is debatable, as the contractor may have less pressure to be highly cost-conscious compared to a competitive environment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 13 COMMERCIAL STREET, NAIROBI

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign Owned, Nonprofit Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $646,439,978

Exercised Options: $646,439,978

Current Obligation: $509,539,555

Actual Outlays: $118,765,184

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline