VA's Pharmacy Prime Vendor Contract with McKesson Corporation for $39.2M in FY2017

Contract Overview

Contract Amount: $39,248,591 ($39.2M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-06-01

End Date: 2017-08-31

Contract Duration: 91 days

Daily Burn Rate: $431.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2017 JUN-AUG

Place of Performance

Location: ALBANY, ALBANY County, NEW YORK, 12208

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $39.2 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2017 JUN-AUG Key points: 1. The Department of Veterans Affairs (VA) awarded a significant contract for pharmaceutical preparations. 2. McKesson Corporation, a major player in the healthcare supply chain, is the vendor. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. This spending falls within the Pharmaceutical Preparation Manufacturing sector.

Value Assessment

Rating: good

The contract value of $39.2M over three months represents substantial pharmaceutical spending. Benchmarking against similar large-scale pharmaceutical supply contracts would be necessary for a precise value assessment, but the firm fixed price suggests cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The competitive nature of the award is expected to yield cost savings for taxpayers by securing favorable pricing for essential pharmaceuticals.

Public Impact

Ensures a steady supply of pharmaceuticals for veterans. Supports the operational needs of the VA healthcare system. Impacts the pharmaceutical distribution market and related industries. Contributes to the overall health and well-being of beneficiaries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in pharmaceutical markets.
Dependence on a single vendor for a critical supply chain.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract provides cost certainty.
Supports a vital government program for veterans.

Sector Analysis

This contract falls under the Pharmaceutical Preparation Manufacturing sector, which is crucial for healthcare delivery. Spending in this sector is generally high due to the essential nature of the products. Benchmarks would typically look at per-capita spending on pharmaceuticals within large healthcare systems.

Small Business Impact

While McKesson Corporation is a large entity, the contract's nature as a prime vendor for pharmaceuticals may involve subcontracting opportunities for smaller businesses in logistics, distribution, or specialized pharmaceutical services, though this is not explicitly detailed.

Oversight & Accountability

The VA's procurement processes are subject to oversight by various government watchdogs, including the Government Accountability Office (GAO) and the VA Office of Inspector General (OIG), to ensure fairness and compliance.

Related Government Programs

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

Risk Flags

Supply chain disruptions
Price volatility of pharmaceuticals
Vendor performance issues
Regulatory changes impacting drug manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $39.2 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2017 JUN-AUG

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 $39.2 million.

What is the period of performance?

Start: 2017-06-01. End: 2017-08-31.

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

Analyzing historical pricing data for comparable pharmaceutical preparations procured by the VA is crucial. This involves comparing the unit costs under this contract against previous awards and market benchmarks to identify any significant deviations or cost efficiencies achieved through the competitive bidding process.

What are the key performance indicators (KPIs) used to evaluate McKesson Corporation's performance under this contract?

Key performance indicators likely include on-time delivery rates, order accuracy, product quality, and adherence to contractual specifications. Regular performance reviews by the VA would assess McKesson's ability to meet these KPIs, ensuring the reliable supply of pharmaceuticals and identifying any potential service deficiencies.

How does the VA ensure the quality and efficacy of pharmaceuticals supplied under this contract?

The VA ensures pharmaceutical quality and efficacy through stringent vendor qualification processes, adherence to FDA regulations, and potentially through its own quality assurance testing. Contractual terms would mandate compliance with all relevant pharmaceutical standards and require vendors to provide documentation verifying product integrity.

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: $39,248,591

Exercised Options: $39,248,591

Current Obligation: $39,248,591

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline