VA's Pharmacy Prime Vendor Contract for FY2017 Q3 Awarded to McKesson Corporation for $47.5M

Contract Overview

Contract Amount: $47,477,713 ($47.5M)

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: $521.7K/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: DULUTH, GWINNETT County, GEORGIA, 30096

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $47.5 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 awarded a significant contract for pharmaceutical supplies. 2. McKesson Corporation, a major player in the pharmaceutical distribution market, secured the award. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The spending period covers three months in FY2017, indicating a recurring need for these services.

Value Assessment

Rating: good

The contract's value of $47.5M over three months suggests a substantial volume of pharmaceutical purchases. Benchmarking against similar large-scale pharmaceutical distribution contracts would be necessary for a precise value assessment, but the firm fixed price indicates cost certainty for the VA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically fosters competitive pricing and allows for a broad range of potential bidders. This method is expected to yield fair market prices for the pharmaceutical supplies.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it aims to secure the best possible price for essential pharmaceutical products for veterans.

Public Impact

Ensures timely access to essential medications for veterans. Supports the operational needs of VA healthcare facilities nationwide. Contributes to the stability of the pharmaceutical supply chain for a critical government agency.

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 via full and open competition.
Firm fixed price contract provides cost predictability.
Supports a vital government function (veteran healthcare).

Sector Analysis

This contract falls within the pharmaceutical preparation manufacturing and distribution sector. Spending in this area is crucial for public health and national security, with significant government contracts awarded to major distributors like McKesson.

Small Business Impact

While the prime vendor is a large corporation, the contract's nature as a large-scale distribution agreement may limit direct subcontracting opportunities for small businesses in the pharmaceutical manufacturing itself. However, ancillary services related to logistics and delivery could potentially involve small businesses.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Regular performance reviews and audits would be standard to ensure compliance with terms and conditions, and to monitor delivery and quality of pharmaceuticals.

Related Government Programs

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

Risk Flags

Supply chain disruption risk.
Potential for price increases in future contract periods.
Dependence on a single large supplier.
Regulatory compliance risks in pharmaceutical handling.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $47.5 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 $47.5 million.

What is the period of performance?

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

What is the historical spending trend for the Pharmacy Prime Vendor contract?

Analyzing historical spending data for the Pharmacy Prime Vendor contract is crucial to understand if the current award of $47.5M for FY2017 Q3 represents an increase, decrease, or stable expenditure compared to previous periods. This trend analysis helps identify potential cost efficiencies or escalating costs over time and informs future budget projections.

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

Key performance indicators for this contract likely include on-time delivery rates, order accuracy, drug availability, and adherence to temperature control and handling standards for pharmaceuticals. The VA would monitor these KPIs to ensure the reliability and quality of the supply chain, mitigating risks associated with medication shortages or spoilage.

How does the VA ensure the quality and efficacy of pharmaceuticals procured through this prime vendor contract?

The VA ensures pharmaceutical quality and efficacy through stringent vendor qualification processes, adherence to FDA regulations, and potentially through its own internal quality assurance checks. The contract likely includes specifications for product sourcing, handling, and storage, with provisions for addressing any deviations or quality issues that may arise.

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: $47,477,713

Exercised Options: $47,477,713

Current Obligation: $47,477,713

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline