VA's Pharmacy Prime Vendor Contract with McKesson Corporation Totals $38.2M

Contract Overview

Contract Amount: $38,222,102 ($38.2M)

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: $1.3M/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: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37129

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $38.2 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. Contract awarded to McKesson Corporation for pharmacy prime vendor services. 2. The Department of Veterans Affairs is the contracting agency. 3. The contract value is $38,222,102.12. 4. The contract was awarded under full and open competition. 5. The contract duration was 30 days.

Value Assessment

Rating: good

The contract value of $38.2M for a 30-day period suggests a significant volume of pharmaceutical purchases. Benchmarking against similar prime vendor contracts would be necessary for a precise pricing assessment, but the scale indicates substantial spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating a robust process for price discovery and ensuring the government received competitive pricing. This method typically leads to better value for taxpayer dollars.

Taxpayer Impact: Full and open competition generally maximizes taxpayer value by fostering a competitive environment among potential vendors, leading to more favorable pricing.

Public Impact

Ensures timely access to essential pharmaceuticals for veterans. Supports the VA's healthcare mission by providing a reliable supply chain. The large contract value highlights the significant investment in veteran healthcare. Competition in this sector can drive innovation in pharmaceutical distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (30 days) may indicate a bridge contract or a specific, limited need.
Lack of detailed performance metrics in provided data.
Potential for price fluctuations in pharmaceutical markets.

Positive Signals

Awarded under full and open competition.
Significant contract value suggests a critical service being provided.
Managed by the Department of Veterans Affairs, a major federal healthcare provider.

Sector Analysis

The pharmaceutical wholesale and distribution sector is critical for healthcare delivery. Federal spending in this area is substantial, driven by agencies like the VA serving large populations. Benchmarks often focus on cost per prescription or percentage of total drug spend.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. Large prime vendor contracts in this sector are typically dominated by major corporations due to the scale of operations and logistical requirements.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Robust oversight mechanisms are crucial to ensure timely delivery, quality of pharmaceuticals, and adherence to contract terms, especially given the high value.

Related Government Programs

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

Risk Flags

Short contract duration.
Limited performance data provided.
Potential for market volatility in drug pricing.
High contract value requires diligent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $38.2 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 $38.2 million.

What is the period of performance?

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

What is the typical duration for Pharmacy Prime Vendor contracts, and does this 30-day period suggest a deviation from the norm?

Pharmacy Prime Vendor contracts often have longer durations, typically spanning multiple years with options for renewal, to ensure supply chain stability. A 30-day duration is unusually short and might indicate a temporary or bridge contract to cover a gap while a longer-term contract is being finalized or recompeted. This could necessitate further investigation into the contract's purpose and potential follow-on actions.

How does the awarded amount of $38.2M for 30 days compare to industry benchmarks for similar pharmaceutical distribution services?

Without specific details on the volume and types of drugs procured, a direct comparison is difficult. However, $38.2M for a single month's prime vendor services represents a substantial expenditure, suggesting a very large patient population or a wide range of high-cost medications. Industry benchmarks often look at cost per prescription or as a percentage of total pharmaceutical spend, which would require more granular data for accurate assessment.

What are the key performance indicators (KPIs) used to measure the effectiveness of this Pharmacy Prime Vendor contract?

Effective oversight of a Pharmacy Prime Vendor contract typically involves KPIs such as on-time delivery rates, order accuracy, drug availability, temperature control compliance, and responsiveness to VA needs. While the provided data doesn't detail these KPIs, the VA would likely monitor these metrics closely to ensure the reliability and quality of pharmaceutical supply, which is critical for veteran healthcare.

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: $38,222,102

Exercised Options: $38,222,102

Current Obligation: $38,222,102

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline