VA's Pharmacy Prime Vendor Contract Awarded to McKesson Corporation for $16.9M

Contract Overview

Contract Amount: $16,913,350 ($16.9M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-06-01

End Date: 2009-06-30

Contract Duration: 29 days

Daily Burn Rate: $583.2K/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: LANCASTER, DALLAS County, TEXAS, 75134

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16.9 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. The Department of Veterans Affairs awarded a significant contract for pharmacy prime vendor services. 2. McKesson Corporation secured this contract, indicating strong competition in the pharmaceutical supply chain. 3. The contract's fixed-price nature aims to control costs for essential drug and sundries procurement. 4. This award falls under the Drugs and Druggists' Sundries Merchant Wholesalers sector.

Value Assessment

Rating: good

The contract value of $16.9 million appears reasonable given the scope of pharmacy prime vendor services. Benchmarking against similar large-scale pharmaceutical distribution contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method likely resulted in competitive pricing for the VA.

Taxpayer Impact: The competitive award process is expected to yield cost savings for taxpayers by ensuring fair market pricing for essential pharmaceuticals.

Public Impact

Ensures a steady supply of prescription drugs and medical sundries to VA facilities nationwide. Supports the healthcare needs of veterans by providing access to necessary medications. The contract's duration and value highlight the scale of VA's pharmaceutical procurement operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in pharmaceutical markets impacting long-term cost-effectiveness.
Dependence on a single vendor for a critical supply chain component.

Positive Signals

Awarded through full and open competition, indicating competitive pricing.
Firm fixed-price contract helps manage budget predictability.

Sector Analysis

This contract operates within the pharmaceutical wholesale and distribution sector, a critical component of the healthcare supply chain. Spending benchmarks in this area are often tied to overall healthcare expenditure and drug pricing trends.

Small Business Impact

Analysis of small business participation is not directly available from the provided data, but large prime vendor contracts often involve subcontracting opportunities.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight of this contract to ensure timely delivery and quality of pharmaceutical products. Performance metrics and compliance checks are standard oversight mechanisms.

Related Government Programs

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

Risk Flags

Supply chain vulnerability
Vendor performance risk
Market price volatility
Contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16.9 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 $16.9 million.

What is the period of performance?

Start: 2009-06-01. End: 2009-06-30.

What is the projected long-term cost-effectiveness of this contract given potential drug price inflation?

The long-term cost-effectiveness hinges on the contract's flexibility regarding price adjustments and the VA's ability to negotiate favorable terms amidst market volatility. While a firm fixed price offers initial predictability, mechanisms for addressing significant inflation or deflation in drug costs are crucial for sustained value.

What are the primary risks associated with relying on a single vendor for the Pharmacy Prime Vendor program?

The primary risks include supply chain disruptions due to unforeseen events affecting the vendor (e.g., natural disasters, labor issues, financial instability), potential for reduced negotiation leverage over time, and the impact of a single point of failure on medication availability for veterans.

How effectively does this contract support the VA's mission to provide comprehensive healthcare to veterans?

This contract is fundamental to the VA's mission by ensuring a reliable and efficient supply of pharmaceuticals. Its effectiveness is measured by the consistent availability of medications, the quality of products, and the overall cost management, directly impacting the quality of care veterans receive.

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: $16,913,350

Exercised Options: $16,913,350

Current Obligation: $16,913,350

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline