VA awards $130.5M for pharmaceutical preparations to McKesson Corporation under full and open competition

Contract Overview

Contract Amount: $130,506,095 ($130.5M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2012-12-01

End Date: 2012-12-31

Contract Duration: 30 days

Daily Burn Rate: $4.4M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT + PHARMACEUTICALS

Place of Performance

Location: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37130

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $130.5 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT + PHARMACEUTICALS Key points: 1. Significant contract value of $130.5 million awarded. 2. McKesson Corporation is a major player in the pharmaceutical distribution market. 3. Full and open competition was utilized, suggesting a robust price discovery process. 4. The contract falls within the pharmaceutical preparation manufacturing sector.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty. Benchmarking against similar pharmaceutical supply contracts would offer further insight into value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition indicates that multiple vendors had the opportunity to bid, fostering a competitive environment that should drive favorable pricing.

Taxpayer Impact: Taxpayer funds are being utilized through a competitive process, aiming for cost-effectiveness in pharmaceutical procurement.

Public Impact

Ensures access to essential pharmaceuticals for veterans. Supports the Department of Veterans Affairs' healthcare mission. Impacts the pharmaceutical supply chain and distribution network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in pharmaceutical markets.
Dependence on a single awardee for a large value contract.

Positive Signals

Competitive award process.
Clear contract type (firm fixed price).

Sector Analysis

This contract is within the pharmaceutical preparation manufacturing sector, which is critical for healthcare. Spending benchmarks in this area are often high due to the nature of medical supplies.

Small Business Impact

The data does not indicate specific small business participation. Further analysis would be needed to determine if small businesses were involved as subcontractors or prime contractors.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. Contract performance and adherence to terms would be monitored to ensure accountability.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Market volatility in pharmaceutical pricing.
Potential for supply chain disruptions.
Contract duration and renewal risks.
Dependence on a single large supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $130.5 million to MCKESSON CORPORATION. EXPRESS REPORT + PHARMACEUTICALS

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 $130.5 million.

What is the period of performance?

Start: 2012-12-01. End: 2012-12-31.

What is the historical pricing trend for similar pharmaceutical preparations procured by the VA?

Analyzing historical pricing data for comparable pharmaceutical preparations procured by the VA is crucial. This would involve comparing the awarded price against previous contracts for similar items, considering factors like inflation, market demand, and specific drug formulations. Such a comparison helps determine if the current award represents a fair and reasonable price over time and identifies any significant deviations that warrant further investigation.

What are the key performance indicators (KPIs) for this contract and how is performance being measured?

Key performance indicators for this contract likely include on-time delivery, product quality and compliance with specifications, and order accuracy. The VA would establish specific metrics and thresholds for these KPIs. Performance is typically measured through regular reporting by the contractor, inspections, and user feedback. Failure to meet KPIs could result in penalties or contract termination, ensuring accountability.

How does the awarded price compare to the government estimate or other competitive bids received?

Comparing the awarded price to the government's independent cost estimate and other bids received is essential for validating value. If the awarded price is significantly lower than the estimate and other bids, it suggests strong competition and good price discovery. Conversely, if it's higher, it may indicate issues with the bidding process or market conditions. This comparison is a primary method for assessing procurement effectiveness.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE POST ST, SAN FRANCISCO, CA, 94104

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

Financial Breakdown

Contract Ceiling: $130,506,095

Exercised Options: $130,506,095

Current Obligation: $130,506,095

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline