VA's Pharmacy Prime Vendor Contract with McKesson Corporation Totals $14.9M, Awarded Under Full and Open Competition

Contract Overview

Contract Amount: $14,932,682 ($14.9M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-09-01

End Date: 2009-09-30

Contract Duration: 29 days

Daily Burn Rate: $514.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT PHARMACY PRIME VENDOR

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $14.9 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. The contract, valued at $14.9 million, was awarded to McKesson Corporation. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract duration was 29 days, indicating a short-term or interim award. 4. The spending falls under the 'Drugs and Druggists' Sundries Merchant Wholesalers' NAICS code.

Value Assessment

Rating: good

The contract value of $14.9 million for a 29-day period suggests a significant but potentially short-term need. Without specific unit pricing or comparison to similar short-term pharmacy vendor contracts, a precise pricing assessment is difficult, but the full and open competition implies a focus on achieving a competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows all responsible sources to submit a bid. This method is designed to promote price discovery and ensure the government receives the best value by fostering a competitive environment.

Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it aims to secure competitive pricing and avoid inflated costs associated with limited or sole-source procurements.

Public Impact

Ensures access to essential pharmaceuticals for veterans. Supports the Department of Veterans Affairs' healthcare mission. Potential for cost savings due to competitive bidding. Reliability of drug supply chain for VA facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (29 days) may indicate an interim solution or a specific, limited-time requirement.
Lack of detailed breakdown of spending by drug category or service.

Positive Signals

Awarded under full and open competition, promoting fairness and potential cost savings.
Awarded to a known entity (McKesson Corporation) with established supply chain capabilities.

Sector Analysis

This contract falls within the healthcare sector, specifically related to pharmaceutical procurement. Spending benchmarks for pharmacy prime vendor contracts can vary widely based on the volume of prescriptions, types of drugs, and the specific needs of the agency. The $14.9 million for a 29-day period represents a substantial expenditure for a short timeframe.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. As this was a full and open competition, larger prime vendors likely dominated the bidding process, though subcontractors could potentially include small businesses.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Oversight would typically involve ensuring timely delivery, product quality, and adherence to contract terms. The short duration might imply less extensive long-term oversight is required compared to multi-year contracts.

Related Government Programs

Drugs and Druggists' Sundries Merchant Wholesalers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Short contract duration.
Potential for price fluctuations in pharmaceutical markets.
Dependence on a single vendor for a critical supply.
Limited data on specific drug costs and volumes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $14.9 million to MCKESSON CORPORATION. EXPRESS REPORT PHARMACY PRIME VENDOR

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $14.9 million.

What is the period of performance?

Start: 2009-09-01. End: 2009-09-30.

What was the primary driver for the short 29-day duration of this contract?

The short 29-day duration suggests this contract may have served as an interim solution to bridge a gap between longer-term contracts, fulfilled an immediate and specific need, or was part of a phased procurement strategy. Without further context, it's difficult to pinpoint the exact reason, but it implies a non-standard or temporary requirement.

How did the pricing achieved through full and open competition compare to historical or projected costs for similar pharmaceutical supplies?

While full and open competition is designed to achieve competitive pricing, the provided data lacks specific cost comparisons. To assess value, one would need to analyze the per-unit costs of key pharmaceuticals against market benchmarks or previous contract pricing. The $14.9 million total for 29 days is significant, but its cost-effectiveness hinges on the specific drugs and quantities procured.

What is the potential impact on veteran healthcare access if this vendor experienced supply chain disruptions?

Given McKesson Corporation's established role as a major pharmaceutical distributor, the risk of significant supply chain disruption is generally considered low. However, any interruption could impact the availability of critical medications for veterans, potentially leading to treatment delays or the need for alternative, possibly more expensive, sourcing methods.

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: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 POST ST, SAN FRANCISCO, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,932,682

Exercised Options: $14,932,682

Current Obligation: $14,932,682

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline