VA's Pharmacy Prime Vendor Contract with McKesson Corporation Totals $15.25M for 30 Days

Contract Overview

Contract Amount: $15,250,999 ($15.3M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-12-01

End Date: 2009-12-31

Contract Duration: 30 days

Daily Burn Rate: $508.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT PHARMACY PRIME VENDOR

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90073

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $15.3 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. The contract awarded to McKesson Corporation for pharmacy prime vendor services represents a significant expenditure for the Department of Veterans Affairs. 2. Competition for this contract was full and open, suggesting a competitive bidding process. 3. The contract's duration of 30 days indicates a short-term need or a bridge contract. 4. The sector is primarily related to healthcare procurement, specifically pharmaceuticals.

Value Assessment

Rating: good

The contract value of $15.25M for a 30-day period suggests a substantial but potentially variable per-diem cost. Without specific unit pricing or volume data, a precise comparison is difficult, but it appears to be a significant investment for a short timeframe.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to more competitive pricing. The price discovery mechanism is through the competitive bidding process.

Taxpayer Impact: Taxpayer funds are being utilized for essential pharmaceutical supplies to support veterans' healthcare needs. The competitive nature of the award aims to ensure efficient use of these funds.

Public Impact

Ensures timely access to essential medications for veterans. Supports the operational needs of VA healthcare facilities nationwide. Contributes to the overall health and well-being of the veteran population. Impacts the pharmaceutical supply chain and distribution networks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration may lead to frequent re-competition costs.
Potential for price fluctuations in subsequent short-term awards.

Positive Signals

Full and open competition promotes market efficiency.
Award to a single vendor ensures supply chain continuity for the period.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on the procurement and distribution of pharmaceuticals. Spending benchmarks in this area are highly variable based on drug types, volumes, and contract structures, but this represents a significant short-term outlay for essential medical supplies.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine if small businesses were involved as subcontractors or if opportunities were missed.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. Accountability is maintained through contract performance monitoring and adherence to federal procurement regulations.

Related Government Programs

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

Risk Flags

Short contract duration may lead to increased administrative costs.
Potential for price escalation in future contract renewals.
Dependence on a single vendor for critical pharmaceutical supplies.
Lack of transparency on specific drug pricing within the total contract value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $15.3 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 $15.3 million.

What is the period of performance?

Start: 2009-12-01. End: 2009-12-31.

What is the projected annual spending for this pharmacy prime vendor service based on this 30-day contract?

Extrapolating from the 30-day contract value of $15.25M, the projected annual spending would be approximately $183M ($15.25M * 12 months). However, this assumes consistent monthly spending and does not account for potential seasonal variations in demand or changes in contract scope over a full year.

What are the key performance indicators (KPIs) used to assess McKesson Corporation's performance under this contract?

Key performance indicators likely include on-time delivery rates, order accuracy, inventory management, drug availability, and compliance with temperature and handling requirements. The VA would monitor these KPIs to ensure the contractor meets contractual obligations and maintains the quality of pharmaceutical supply.

How does the pricing structure of this contract compare to other federal or commercial pharmacy prime vendor contracts?

Without specific unit pricing details and volume data, a direct comparison is challenging. However, the 'FIRM FIXED PRICE' structure suggests predictability for the VA. The full and open competition aims to ensure the price is competitive within the market for similar services and drug volumes.

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: 8

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,250,999

Exercised Options: $15,250,999

Current Obligation: $15,250,999

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline