VA's Pharmacy Prime Vendor Contract Awarded to McKesson Corporation for $52.5M

Contract Overview

Contract Amount: $52,470,562 ($52.5M)

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: $1.7M/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: HINES, COOK County, ILLINOIS, 60141

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $52.5 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR Key points: 1. Contract awarded to McKesson Corporation for $52.5 million. 2. Full and open competition was utilized. 3. The contract is for drugs and druggists' sundries. 4. This is a firm-fixed-price contract. 5. The contract duration is 30 days.

Value Assessment

Rating: good

The contract value of $52.5 million for a 30-day period suggests a significant volume of pharmaceutical purchases. Benchmarking against similar large-scale pharmaceutical contracts would be necessary for a precise pricing assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive indicator for price discovery. This method allows multiple vendors to bid, theoretically driving down costs and ensuring fair market pricing.

Taxpayer Impact: The competitive bidding process aims to secure the best possible prices for pharmaceuticals, thereby maximizing taxpayer value and minimizing unnecessary expenditure.

Public Impact

Ensures access to essential medications for veterans. Supports the Department of Veterans Affairs' healthcare mission. Impacts the pharmaceutical supply chain and distribution. Potential for cost savings through competitive bidding.

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 or award values for specific drug categories.

Positive Signals

Full and open competition utilized.
Firm-fixed-price contract provides cost certainty.

Sector Analysis

The pharmaceutical sector is characterized by high demand and complex supply chains. This contract falls under the wholesale distribution of drugs and sundries, a critical component of healthcare delivery.

Small Business Impact

The data does not indicate specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. The firm-fixed-price nature of the contract provides some level of cost control, but monitoring delivery and quality is crucial.

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 time frame for performance and potential for disruption.
Lack of detailed breakdown of costs by drug category.
Potential for price increases in follow-on contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $52.5 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 $52.5 million.

What is the period of performance?

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

What is the historical pricing trend for similar pharmacy prime vendor contracts awarded by the VA?

Historical pricing data for similar contracts is essential for a comprehensive value assessment. Analyzing past awards, including price per unit and total contract value over time, can reveal cost efficiencies or potential escalations. Without this context, it's difficult to definitively state if the $52.5 million for 30 days represents a competitive price.

What are the specific risks associated with a short 30-day contract duration for pharmaceutical supply?

A short 30-day duration poses risks such as potential supply chain disruptions if a follow-on contract is delayed, increased administrative burden for frequent re-solicitation, and potentially higher unit costs if vendors factor in short-term commitment premiums. It may also limit the ability to negotiate long-term volume discounts.

How effectively does the full and open competition process ensure optimal drug availability and quality for veterans?

Full and open competition theoretically maximizes the number of potential bidders, fostering a competitive environment that should lead to better pricing and service. However, effectiveness also depends on the clarity of requirements, the evaluation criteria, and the VA's ability to monitor vendor performance to ensure consistent drug availability and quality standards are met.

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: $52,470,562

Exercised Options: $52,470,562

Current Obligation: $52,470,562

Parent Contract

Parent Award PIID: V797P1020

IDV Type: IDC

Timeline