DoD Spends $320M on Pharmacy Services with Express Scripts Inc. via Full and Open Competition
Contract Overview
Contract Amount: $320,138,650 ($320.1M)
Contractor: Express Scripts Inc
Awarding Agency: Department of Defense
Start Date: 2003-09-09
End Date: 2009-11-03
Contract Duration: 2,247 days
Daily Burn Rate: $142.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIXED PRICE INCENTIVE
Sector: Healthcare
Place of Performance
Location: MARYLAND HEIGHTS, ST. LOUIS County, MISSOURI, 63043
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $320.1 million to EXPRESS SCRIPTS INC for work described as: Key points: 1. Significant contract value of over $320 million awarded to Express Scripts Inc. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of 2247 days (over 6 years) indicates a long-term commitment. 4. The sector is related to healthcare/pharmacy services, a critical area for government operations.
Value Assessment
Rating: good
The contract value of $320M over 2247 days suggests a substantial but potentially reasonable cost for comprehensive pharmacy services. Benchmarking against similar large-scale pharmacy benefit management contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of 'FULL AND OPEN COMPETITION' indicates that multiple bidders were likely considered, which generally promotes price discovery and competitive pricing. This method aims to secure the best value for the government.
Taxpayer Impact: The competitive nature of the award suggests that taxpayers likely benefited from a more efficient pricing structure compared to a sole-source or limited competition scenario.
Public Impact
Ensures access to prescription medications for beneficiaries. Supports the health and readiness of military personnel and their families. Impacts the pharmaceutical supply chain and drug pricing dynamics.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics or quality indicators in provided data.
- Potential for price increases over the long contract duration.
- Dependence on a single contractor for critical pharmacy services.
Positive Signals
- Competitive award process.
- Significant value delivered through a large contract.
- Long-term service provision ensures continuity.
Sector Analysis
This contract falls within the Healthcare sector, specifically focusing on pharmacy benefit management. Spending benchmarks in this area are highly variable, depending on the scope of services, number of beneficiaries, and negotiated drug prices.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. Large contracts like this often involve prime contractors who may then subcontract, but direct small business participation is not evident here.
Oversight & Accountability
The contract's duration and value necessitate robust oversight to ensure performance, manage costs, and verify compliance with terms. The Department of Defense's contracting oversight mechanisms would be crucial.
Related Government Programs
- Pharmacies and Drug Stores
- Department of Defense Contracting
- Tricare Management Activity Programs
Risk Flags
- Long contract duration may lead to price escalation.
- Potential for vendor lock-in.
- Dependence on a single provider for critical health services.
- Lack of detailed performance metrics in summary data.
Tags
pharmacies-and-drug-stores, department-of-defense, mo, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $320.1 million to EXPRESS SCRIPTS INC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is EXPRESS SCRIPTS INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Tricare Management Activity).
What is the total obligated amount?
The obligated amount is $320.1 million.
What is the period of performance?
Start: 2003-09-09. End: 2009-11-03.
What was the specific scope of pharmacy services covered under this contract, and how did it compare to market standards at the time of award?
The provided data identifies the NAICS code 446110 as 'Pharmacies and Drug Stores,' suggesting a broad scope including prescription fulfillment and potentially related pharmacy services. A detailed comparison to market standards would require access to the contract's statement of work and contemporaneous market research reports to assess if the services were comprehensive and competitively priced against similar offerings.
What were the key performance indicators (KPIs) and risk mitigation strategies outlined in the contract to ensure service quality and manage potential disruptions?
The provided data lacks specific details on KPIs or risk mitigation. However, for a contract of this magnitude and duration, it's expected that the Department of Defense would have included performance standards related to prescription accuracy, delivery times, formulary management, and beneficiary satisfaction. Risk mitigation might involve contingency plans for supply chain issues or contractor performance failures.
How did the fixed-price incentive (FPI) structure influence cost control and contractor performance throughout the contract's lifecycle?
A Fixed Price Incentive (FPI) contract aims to share cost savings or overruns between the government and the contractor, incentivizing efficiency. If Express Scripts met or exceeded targets, both parties could benefit. Conversely, cost overruns would be shared, potentially increasing the final price beyond initial estimates, highlighting the importance of effective cost monitoring and target setting.
Industry Classification
NAICS: Retail Trade › Health and Personal Care Stores › Pharmacies and Drug Stores
Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Parent Company: Priority Healthcare Distribution Inc. (UEI: 078461979)
Address: 14000 RIVERPORT DR, MARYLAND HEIGH, MO
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2003-09-09
Current End Date: 2009-11-03
Potential End Date: 2009-11-03 00:00:00
Last Modified: 2013-06-03
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