VA's Pharmacy Prime Vendor Contract with McKesson Corporation Reaches $46.7M, Awarded Under Full and Open Competition

Contract Overview

Contract Amount: $46,740,793 ($46.7M)

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: $1.6M/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: HINES, COOK County, ILLINOIS, 60141

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $46.7 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. The contract, valued at $46.7 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 primary sector appears to be healthcare, specifically pharmaceutical supply. 5. The award was made by the Department of Veterans Affairs.

Value Assessment

Rating: good

The contract value of $46.7 million for a 29-day period suggests a significant but potentially short-term need. Without specific unit pricing or comparison to similar short-term contracts, a precise value assessment is difficult, but the full and open competition implies a market-driven 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 for the widest possible range of bidders and promotes price discovery through market forces. This method is generally expected to yield competitive pricing.

Taxpayer Impact: Full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible prices through a robust bidding process.

Public Impact

Ensures timely access to essential pharmaceuticals for veterans. Supports the Department of Veterans Affairs' mission to provide healthcare. The short duration may indicate a bridge contract or a specific, limited-time requirement. Potential for price fluctuations if this is a recurring short-term award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (29 days) may indicate an interim solution or a specific, limited need.
Lack of detailed performance metrics or specific deliverables in the provided data.
Potential for price volatility if this is a recurring short-term contract.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Supports a critical government function: providing healthcare to veterans.
Awarded to a known entity in the pharmaceutical supply chain.

Sector Analysis

This contract falls within the healthcare sector, specifically the wholesale distribution of drugs and sundries. The pharmaceutical supply chain is a critical component of healthcare delivery, with significant government spending often directed towards ensuring access to medications.

Small Business Impact

The provided data does not indicate any specific set-asides for small businesses. The award to McKesson Corporation, a large established company, suggests that small businesses may not have been primary participants in this particular procurement, though they could be subcontractors.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. The use of full and open competition is a standard procurement practice that generally promotes accountability. Further oversight would involve monitoring performance and adherence to contract terms.

Related Government Programs

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

Risk Flags

Short contract duration.
Lack of detailed pricing data for analysis.
No indication of small business participation.
Potential for price volatility if this is a recurring short-term award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $46.7 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 $46.7 million.

What is the period of performance?

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

What was the specific purpose and justification for the short 29-day duration of this contract?

The short 29-day duration suggests this contract may have served as a bridge to a longer-term agreement, fulfilled a specific, time-limited need, or was part of a phased procurement strategy. Without further details on the contract's history or the VA's procurement plan, the exact reason remains unclear. Understanding this would clarify whether it represents a standard operational need or an exceptional circumstance.

How does the per-unit cost of drugs under this contract compare to market benchmarks or previous VA contracts?

The provided data lacks specific per-unit cost information, making a direct comparison impossible. While 'full and open competition' generally drives competitive pricing, the actual cost-effectiveness depends on the specific drugs procured and their volumes. Benchmarking would require access to detailed pricing schedules and comparison with similar contracts or market data for the same period.

What mechanisms are in place to ensure the ongoing effectiveness and reliability of McKesson Corporation's pharmaceutical supply to the VA under this contract?

The contract's effectiveness relies on the VA's standard oversight procedures, which typically include performance monitoring, quality assurance checks, and adherence to delivery schedules. Given the critical nature of pharmaceutical supply, the VA likely has protocols for tracking delivery timeliness, product integrity, and responsiveness to any supply chain disruptions. The firm fixed-price nature also incentivizes the contractor to meet obligations.

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: $46,740,793

Exercised Options: $46,740,793

Current Obligation: $46,740,793

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline