VA's Pharmacy Prime Vendor Contract Awarded to McKesson Corporation for $34.4M in FY2015

Contract Overview

Contract Amount: $34,408,631 ($34.4M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-09-01

End Date: 2015-09-30

Contract Duration: 29 days

Daily Burn Rate: $1.2M/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) FY2015SEPT NCO 20

Place of Performance

Location: VANCOUVER, CLARK County, WASHINGTON, 98660

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $34.4 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2015SEPT NCO 20 Key points: 1. The contract, valued at $34.4 million, was awarded to McKesson Corporation. 2. This represents a significant award within the pharmaceutical preparation manufacturing sector. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The short duration (29 days) might indicate a specific, time-bound need or a bridge contract.

Value Assessment

Rating: good

The contract's firm fixed price structure suggests clear cost expectations. Benchmarking against similar large-scale pharmaceutical supply contracts would be necessary for a definitive value assessment, but the award amount appears reasonable for a prime vendor role.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The award was made under 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 this award likely resulted in a favorable price for taxpayers, ensuring efficient use of funds for essential pharmaceutical supplies.

Public Impact

Ensures timely access to pharmaceuticals for veterans. Supports the operational needs of the Department of Veterans Affairs healthcare system. Contributes to the stability of pharmaceutical supply chains. Impacts patient care by ensuring medication availability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration raises questions about long-term strategy.
Lack of specific product details limits granular cost analysis.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract provides cost certainty.

Sector Analysis

This contract falls within the Pharmaceutical Preparation Manufacturing sector, a critical area for healthcare. Spending benchmarks for prime vendor contracts of this nature can vary widely based on the scope of services and the specific pharmaceuticals managed.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or partners in this specific award. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The award was managed by the Department of Veterans Affairs, which has established procurement oversight processes. The use of a delivery order under a larger contract framework suggests adherence to existing regulations.

Related Government Programs

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

Risk Flags

Short contract duration.
Limited detail on specific services and products.
Potential for price fluctuations in pharmaceutical markets.
Dependence on a single large vendor for critical supplies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $34.4 million to MCKESSON CORPORATION. EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2015SEPT NCO 20

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 $34.4 million.

What is the period of performance?

Start: 2015-09-01. End: 2015-09-30.

What is the typical duration for Pharmacy Prime Vendor contracts, and does this short duration indicate a specific circumstance?

Pharmacy Prime Vendor contracts often have longer durations, typically spanning multiple years, to ensure consistent supply chain management and vendor commitment. A 29-day duration is unusually short and may suggest this was a bridge contract to cover a gap, a specific project-based need, or a limited-time requirement. Further investigation into the contract's history and purpose is warranted.

How does McKesson Corporation's pricing for this contract compare to industry benchmarks for similar pharmaceutical prime vendor services?

Without detailed line-item pricing and specific service scope, a precise benchmark comparison is challenging. However, McKesson is a major player in pharmaceutical distribution. The firm fixed price and full and open competition suggest a market-driven price. A comprehensive analysis would require comparing the total award value against the volume and types of pharmaceuticals procured and the services rendered, relative to other large-scale VA or government pharmaceutical contracts.

What is the potential impact on veteran healthcare access if this contract was not competitively bid or if pricing was suboptimal?

If this contract were not competitively bid or if pricing were suboptimal, veteran healthcare access could be negatively impacted through potential drug shortages, increased costs for the VA (leading to reduced services elsewhere), or delays in medication delivery. Full and open competition, as indicated here, mitigates these risks by fostering a competitive environment that typically drives down costs and ensures reliable service delivery.

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: $34,408,631

Exercised Options: $34,408,631

Current Obligation: $34,408,631

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline