VA Pharmacy Prime Vendor Contract Awarded to McKesson for $28.16M in FY2014

Contract Overview

Contract Amount: $28,158,861 ($28.2M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-09-01

End Date: 2014-09-30

Contract Duration: 29 days

Daily Burn Rate: $971.0K/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 VA256PPVFY2014SEP

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94104

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $28.2 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR VA256PPVFY2014SEP Key points: 1. The contract, valued at $28.16 million, was awarded to McKesson Corporation. 2. This represents a significant expenditure within the pharmaceutical preparation manufacturing sector. 3. The award was made under full and open competition, suggesting a competitive bidding process. 4. The contract duration was 29 days, indicating a short-term or task-specific award.

Value Assessment

Rating: good

The contract value of $28.16 million for a 29-day period suggests a substantial but potentially variable demand for pharmaceutical supplies. Benchmarking against similar large-scale pharmacy contracts would be necessary for a precise per-unit cost assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically allows for the broadest range of potential bidders and fosters price discovery. This method aims to secure the best value for the government.

Taxpayer Impact: The competitive nature of the award is intended to ensure taxpayer funds are used efficiently for pharmaceutical procurement.

Public Impact

Ensures timely access to essential pharmaceuticals for veterans. Supports the operational needs of the Department of Veterans Affairs healthcare system. Impacts the pharmaceutical supply chain and distribution networks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (29 days) may indicate a need for ongoing re-competition or a specific, short-term requirement.
Lack of detailed cost breakdown makes it difficult to assess cost-effectiveness beyond the total award amount.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Managed by the Department of Veterans Affairs, a key agency for veteran healthcare.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, a critical component of the healthcare industry. Spending in this area is driven by demand for medications and medical supplies, often influenced by government health programs and veteran populations.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms would apply to ensure compliance and performance.

Related Government Programs

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

Risk Flags

Short contract duration
Limited cost-effectiveness visibility
Potential for administrative overhead with frequent re-competition
Lack of small business participation data

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $28.2 million to MCKESSON CORPORATION. EXPRESS REPORT PHARMACY PRIME VENDOR VA256PPVFY2014SEP

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 $28.2 million.

What is the period of performance?

Start: 2014-09-01. End: 2014-09-30.

What was the primary driver for the high value of this contract within such a short duration?

The high value of $28.16 million for a 29-day period suggests this contract likely covered a significant volume of pharmaceutical needs, potentially including emergency supplies, a surge in demand, or a specific large-scale procurement event. Without further details on the specific items procured or the context of the award, it's difficult to pinpoint the exact driver.

How did the pricing compare to benchmarks given the full and open competition?

While full and open competition generally promotes competitive pricing, the provided data lacks specific pricing details or benchmarks to evaluate the cost-effectiveness. A thorough analysis would require comparing the unit prices of the pharmaceuticals procured against market rates or historical contract data for similar items.

What is the long-term effectiveness of awarding short-duration contracts like this for essential pharmaceutical supplies?

Short-duration contracts can ensure flexibility and responsiveness to immediate needs but may lead to increased administrative burden and potentially higher costs due to frequent re-competition. For essential supplies, longer-term contracts with performance incentives might offer greater stability and cost savings, provided they are structured to adapt to changing market conditions.

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: $28,158,861

Exercised Options: $28,158,861

Current Obligation: $28,158,861

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline