DoD awards $3.36M for pharmaceutical supplies, highlighting potential for significant savings through competitive bidding

Contract Overview

Contract Amount: $3,356,955 ($3.4M)

Contractor: Amerisourcebergen Drug Corp

Awarding Agency: Department of Defense

Start Date: 2026-01-12

End Date: 2026-01-13

Contract Duration: 1 days

Daily Burn Rate: $3.4M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 4570467164!PV PHARM BRANCH, VENDOR, CAGE 0U9U0

Place of Performance

Location: CONSHOHOCKEN, MONTGOMERY County, PENNSYLVANIA, 19428

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $3.4 million to AMERISOURCEBERGEN DRUG CORP for work described as: 4570467164!PV PHARM BRANCH, VENDOR, CAGE 0U9U0 Key points: 1. Contract awarded through full and open competition, suggesting a robust market and potential for competitive pricing. 2. The contract's value is modest within the broader pharmaceutical supply sector, but represents a specific need for the Defense Logistics Agency. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Short duration of the delivery order may indicate a need for immediate or short-term supply. 5. Vendor AMERISOURCEBERGEN DRUG CORP has a significant presence in pharmaceutical distribution.

Value Assessment

Rating: good

The contract value of approximately $3.36 million for a single delivery order is within a reasonable range for pharmaceutical supplies. Benchmarking against similar contracts for bulk medicinal and botanical manufacturing would require access to a broader dataset of DLA or other agency procurements. However, the firm fixed-price structure is a positive indicator for value, as it locks in costs and reduces the risk of unexpected increases for the government. The price appears competitive given the nature of pharmaceutical distribution.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters a competitive environment. A higher number of bidders typically leads to better price discovery and potentially lower prices for the government. The use of this procurement method suggests that the market for these pharmaceutical supplies is sufficiently developed to support multiple capable vendors.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for receiving the best value through a wide range of offers and competitive pricing.

Public Impact

Military personnel and potentially their dependents will benefit from the reliable supply of necessary pharmaceuticals. The contract ensures the availability of medicinal and botanical products essential for healthcare services within the Department of Defense. The geographic impact is primarily focused on the distribution points managed by the Defense Logistics Agency, serving military installations. This contract supports the pharmaceutical manufacturing and distribution workforce indirectly by maintaining demand for these critical supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or quality assurance details in the provided data.
Potential for price fluctuations in the pharmaceutical market not fully captured by a fixed-price contract if raw material costs change significantly.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract type minimizes financial risk for the government.
Vendor AMERISOURCEBERGEN DRUG CORP is a known entity in pharmaceutical distribution, suggesting reliability.

Sector Analysis

The pharmaceutical manufacturing and distribution sector is a critical component of the healthcare industry, with significant government spending. This contract falls under the broader category of healthcare and defense logistics. The market is characterized by high regulatory standards, complex supply chains, and substantial research and development investments. Government contracts in this space often focus on ensuring supply chain security and access to essential medicines for military and public health needs. Comparable spending benchmarks would involve analyzing other DLA or VA pharmaceutical procurements.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. The vendor, AMERISOURCEBERGEN DRUG CORP, is a large corporation. Therefore, the direct impact on the small business ecosystem for this specific award appears minimal, unless the prime contractor engages small businesses for subcontracting opportunities not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency (DLA) Contracting Command is responsible for the award and administration. Transparency is facilitated through public contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Pharmaceutical Contracts
Department of Defense Medical Supplies
Federal Supply Schedule (FSS) Pharmaceutical Programs
Veterans Affairs Pharmaceutical Procurement

Risk Flags

Potential for supply chain disruption
Product quality assurance concerns
Short contract duration may require follow-on actions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.4 million to AMERISOURCEBERGEN DRUG CORP. 4570467164!PV PHARM BRANCH, VENDOR, CAGE 0U9U0

Who is the contractor on this award?

The obligated recipient is AMERISOURCEBERGEN DRUG CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $3.4 million.

What is the period of performance?

Start: 2026-01-12. End: 2026-01-13.

What is the historical spending pattern for AMERISOURCEBERGEN DRUG CORP with the Department of Defense?

Analyzing the historical spending patterns of AMERISOURCEBERGEN DRUG CORP with the Department of Defense (DoD) requires accessing comprehensive federal procurement data. Based on available information, AMERISOURCEBERGEN DRUG CORP (CAGE 0U9U0) is a significant player in pharmaceutical distribution and has likely received numerous contracts across various federal agencies, including the DoD. Historical data would reveal the volume and types of goods and services provided, contract values, and the agencies they've served. This specific contract, valued at approximately $3.36 million, represents a single delivery order. A deeper dive into FPDS or similar databases would quantify their total contract awards with the DoD over several fiscal years, identifying trends, major programs supported, and their overall contribution to the DoD's pharmaceutical supply chain. This context helps assess their reliability and importance as a government contractor.

How does the awarded price compare to market rates for similar pharmaceutical supplies?

Determining the precise market rate comparison for this specific pharmaceutical supply contract is challenging without detailed product information and access to real-time market data. However, the contract's value of $3.36 million for a single delivery order awarded under full and open competition suggests a competitive pricing environment. AMERISOURCEBERGEN DRUG CORP is a major distributor, and their pricing is generally considered competitive within the industry. To perform a robust comparison, one would need to identify the specific National Stock Number (NSN) or product codes, research their average selling prices through commercial distributors, and compare them against prices listed on federal supply schedules or other government contracts for identical or substitutable items. The firm fixed-price nature of the contract provides a degree of certainty regarding the cost, but actual market competitiveness hinges on the number of bids received and the final negotiated price relative to industry benchmarks.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this pharmaceutical supply contract include potential supply chain disruptions (e.g., manufacturing issues, transportation delays), quality control failures of the pharmaceutical products, and potential price volatility if market conditions change significantly post-award, despite the fixed-price structure. Mitigation strategies are inherent in the contract type and vendor selection. The firm fixed-price (FFP) contract mitigates financial risk for the government by locking in the price. Awarding to a large, established distributor like AMERISOURCEBERGEN DRUG CORP, who has extensive experience and infrastructure, reduces the risk of supply chain failure. Furthermore, government contracts typically include clauses for quality assurance, inspection, and acceptance, allowing the DLA to reject non-conforming products. The short duration (delivery order for 2026) also limits the exposure period to market fluctuations and potential supply chain issues.

What is the expected performance standard for AMERISOURCEBERGEN DRUG CORP under this contract?

The expected performance standards for AMERISOURCEBERGEN DRUG CORP under this contract are primarily dictated by the terms of the delivery order and the overarching contract it falls under, likely a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a Federal Supply Schedule (FSS) agreement. Key performance indicators (KPIs) would typically include timely delivery to designated locations, adherence to specified quantities, and maintenance of product quality and integrity (e.g., proper storage, handling, expiration dating). The contract specifies a firm fixed price, implying that the vendor is responsible for delivering the specified pharmaceutical products at the agreed-upon cost. Failure to meet these standards could result in contract remedies, such as rejection of goods, assessment of damages, or termination. While specific performance metrics aren't detailed in the summary data, standard government contracting principles apply.

How does this contract fit into the broader mission of the Defense Logistics Agency?

This contract directly supports the Defense Logistics Agency's (DLA) core mission of providing comprehensive logistics support to the U.S. military. The DLA is responsible for the end-to-end supply chain management of a vast array of items, including pharmaceuticals, medical equipment, and subsistence. By procuring essential medicinal and botanical products through contracts like this one, the DLA ensures that military healthcare providers have the necessary supplies to maintain the health and readiness of service members and their families. This specific award contributes to the DLA's role in ensuring the availability and timely delivery of critical medical materiel, thereby underpinning the operational effectiveness and well-being of the armed forces globally.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Medicinal and Botanical Manufacturing

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

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: Cencora, Inc.

Address: 1 W 1ST AVE, CONSHOHOCKEN, PA, 19428

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

Financial Breakdown

Contract Ceiling: $3,356,955

Exercised Options: $3,356,955

Current Obligation: $3,356,955

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2DX22D0069

IDV Type: IDC

Timeline