DoD's $11M medical supply contract awarded to Cardinal Health 200, LLC for 3-year duration

Contract Overview

Contract Amount: $11,049,212 ($11.0M)

Contractor: Cardinal Health 200, LLC

Awarding Agency: Department of Defense

Start Date: 2025-12-19

End Date: 2025-12-22

Contract Duration: 3 days

Daily Burn Rate: $3.7M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 4570333097!OCP, JFAK COMPLETE, NSN 6545-01-632-0167

Place of Performance

Location: WAUKEGAN, LAKE County, ILLINOIS, 60085

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to CARDINAL HEALTH 200, LLC for work described as: 4570333097!OCP, JFAK COMPLETE, NSN 6545-01-632-0167 Key points: 1. Value for money appears fair given the firm-fixed-price structure and 3-year term. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a short performance period and established contractor. 4. Performance context shows this is a delivery order under a larger contract. 5. Sector positioning places this within the critical Defense Logistics Agency's medical supply chain.

Value Assessment

Rating: fair

The contract value of approximately $11 million over three years for medical supplies suggests a moderate annual spend. Benchmarking against similar contracts for bulk medical equipment and supplies is challenging without more specific itemization. However, the firm-fixed-price nature provides cost certainty for the Department of Defense. The total obligated amount is $11,049,211.70.

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 offers. The specific number of bidders is not provided, but the designation suggests a robust competitive environment. This level of competition is generally expected to drive prices towards market rates and encourage efficiency from the awarded contractor.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive marketplace, potentially leading to lower prices and better value for the government's spending on essential medical supplies.

Public Impact

Military personnel and their families will benefit from the consistent availability of necessary medical supplies. The contract ensures the delivery of medical, dental, and hospital equipment and supplies. The geographic impact is primarily within Illinois, where the contractor is located, but supplies will likely be distributed to various military installations. Workforce implications include potential support for logistics and distribution roles within the Defense Logistics Agency and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract periods if competition diminishes.
Dependence on a single contractor for a critical supply chain segment could pose a risk.
Ensuring timely delivery and quality control of a wide range of medical supplies requires diligent oversight.

Positive Signals

Award to an established entity like Cardinal Health suggests a degree of reliability and experience.
Firm-fixed-price contract provides budget predictability for the DoD.
Full and open competition mechanism is a positive signal for market-driven pricing.

Sector Analysis

The market for medical, dental, and hospital equipment and supplies is substantial and highly competitive. This contract falls within the broader healthcare and defense logistics sectors. The Defense Logistics Agency (DLA) plays a crucial role in procuring and distributing these essential items to military healthcare facilities worldwide. Spending in this category is consistently high due to the critical nature of medical readiness.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned. While Cardinal Health is a large corporation, the absence of set-aside provisions means opportunities for small businesses may be limited unless they are direct suppliers or subcontractors to Cardinal Health. Further analysis of subcontracting plans would be needed to fully assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Logistics Agency, which is responsible for ensuring contract compliance, delivery schedules, and quality standards. Accountability measures are inherent in the firm-fixed-price structure, which penalizes cost overruns for the contractor. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly available.

Related Government Programs

Defense Medical Logistics Standard Support
Medical Supplies Procurement
DLA Troop Support Medical
Federal Supply Schedule (FSS) Medical Contracts

Risk Flags

Potential for supply chain disruption
Contractor performance variability
Quality control of medical supplies
Price volatility in future contract periods

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 million to CARDINAL HEALTH 200, LLC. 4570333097!OCP, JFAK COMPLETE, NSN 6545-01-632-0167

Who is the contractor on this award?

The obligated recipient is CARDINAL HEALTH 200, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.0 million.

What is the period of performance?

Start: 2025-12-19. End: 2025-12-22.

What is Cardinal Health 200, LLC's track record with the Department of Defense and Defense Logistics Agency for similar medical supply contracts?

Cardinal Health, Inc. (and its subsidiaries like Cardinal Health 200, LLC) has a significant and long-standing history of contracting with the U.S. government, particularly the Department of Defense and the Defense Logistics Agency (DLA). They are a major distributor of pharmaceuticals and medical products. Publicly available data often shows numerous awards to Cardinal Health for a wide array of medical supplies, equipment, and services. Their track record generally reflects experience in managing large-scale distribution and supply chain operations critical for military healthcare. Specific performance metrics for past contracts, such as on-time delivery rates, quality compliance, and customer satisfaction, would require deeper dives into contract performance reports or DLA's internal assessments, which are not always fully public.

How does the awarded price of $11,049,211.70 compare to market rates for similar medical supply bundles?

Directly comparing the total awarded amount of $11,049,211.70 to 'market rates' for a 'bundle' of medical supplies is challenging without a detailed breakdown of the specific items included in this delivery order. Medical supplies encompass a vast range of products, from basic consumables like bandages and syringes to complex diagnostic equipment. Cardinal Health 200, LLC operates as a merchant wholesaler, implying they procure and resell these items. The firm-fixed-price nature of the contract suggests that Cardinal Health has factored in their procurement costs, overhead, profit, and risk into this total. To benchmark effectively, one would need to compare the unit prices of specific NSNs (National Stock Numbers) or product categories against GSA schedules, other federal contracts, or large commercial group purchasing organization (GPO) pricing, considering volume discounts and delivery terms.

What are the primary risks associated with this specific contract award, considering its duration and scope?

The primary risks associated with this contract, valued at approximately $11 million over three years, are multifaceted. Firstly, there's a supply chain disruption risk; any interruption in Cardinal Health's ability to procure or deliver these essential medical supplies, whether due to manufacturing issues, transportation problems, or geopolitical events, could impact military readiness. Secondly, price escalation risk exists beyond the current contract term; while this award is fixed-price, future solicitations could see higher prices if market conditions change or competition decreases. Thirdly, quality assurance risk is present; ensuring that all delivered items meet stringent military specifications and are free from defects requires robust quality control processes by both the contractor and the DLA. Finally, there's a contractor performance risk; although Cardinal Health is an established entity, any lapse in their operational efficiency or responsiveness could lead to shortages or delays.

How effective is the Defense Logistics Agency's procurement process in securing value for money for medical supplies through mechanisms like full and open competition?

The Defense Logistics Agency (DLA) generally employs robust procurement processes, and the use of 'full and open competition' for contracts like this one is a key mechanism aimed at securing value for money. This approach maximizes the pool of potential bidders, fostering a competitive environment that typically drives down prices and encourages innovation. DLA's extensive experience in logistics and procurement allows them to set clear specifications and evaluation criteria. However, the effectiveness in securing 'value for money' is not solely dependent on the competition type but also on the clarity of requirements, the realism of the government's budget, the evaluation methodology, and the contractor's subsequent performance. While full and open competition is a strong indicator of potential value, ongoing contract management and performance monitoring are crucial to ensure that the anticipated value is realized throughout the contract's lifecycle.

What are the historical spending patterns for medical, dental, and hospital equipment and supplies by the Department of Defense over the last five fiscal years?

Historical spending patterns for medical, dental, and hospital equipment and supplies by the Department of Defense (DoD) show a consistent and significant investment, often in the tens of billions of dollars annually across all branches and agencies, including the DLA. This spending is driven by the need to maintain medical readiness for active-duty personnel, support military families, and respond to global health security requirements. Factors influencing these patterns include operational tempo, geopolitical events (leading to increased demand during deployments or crises), advancements in medical technology, and shifts in healthcare policy. The DLA, as the primary supply chain manager, accounts for a substantial portion of this spending, procuring a vast range of items. While specific figures fluctuate year-to-year, the overall trend indicates sustained high levels of expenditure to ensure comprehensive medical support capabilities.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers

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

Address: 3651 BIRCHWOOD DR, WAUKEGAN, IL, 60085

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

Financial Breakdown

Contract Ceiling: $11,049,212

Exercised Options: $11,049,212

Current Obligation: $11,049,212

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2DV17D6517

IDV Type: IDC

Timeline