VA Pharmacy Prime Vendor Contract Exceeds $28M in FY2015, McKesson Corporation Awarded

Contract Overview

Contract Amount: $28,082,349 ($28.1M)

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: $968.4K/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 NCO 12 FY2015 SEP 1, 2015 TO SEP 30, 2015 CONTRACT VA797P-12-D-0001

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $28.1 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACY PRIME VENDOR NCO 12 FY2015 SEP 1, 2015 TO SEP 30, 2015 CONTRACT VA797P-12-D-0001 Key points: 1. Contract value of $28.08M for a single month (September 2015). 2. McKesson Corporation is a major player in pharmaceutical distribution. 3. Potential for significant taxpayer impact due to large contract value. 4. Focus on pharmaceutical preparation manufacturing within the healthcare sector.

Value Assessment

Rating: good

The contract value of $28.08M for one month suggests a substantial volume of pharmaceutical purchases. Benchmarking against similar large-scale pharmacy prime vendor contracts would be necessary for a precise pricing assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: The significant expenditure of over $28 million in a single month highlights the substantial financial commitment from taxpayers for pharmaceutical supplies.

Public Impact

Ensures 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 network. Potential for cost savings through competitive bidding on essential medicines.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High monthly expenditure
Single vendor for a large volume
Short contract duration (1 month)

Positive Signals

Full and open competition
Firm fixed price contract type

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on pharmaceutical preparation manufacturing and distribution. Spending benchmarks for similar large-scale pharmacy prime vendor contracts are typically in the tens to hundreds of millions annually.

Small Business Impact

The data does not indicate specific participation or subcontracting by small businesses. Large prime vendor contracts like this often involve complex supply chains where small business involvement may be indirect.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight of this contract. Accountability would involve ensuring timely delivery, quality of pharmaceuticals, and adherence to contract terms.

Related Government Programs

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

Risk Flags

High monthly expenditure
Short contract duration
Potential for vendor lock-in with large prime vendors
Reliance on a single large corporation for critical supplies

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $28.1 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACY PRIME VENDOR NCO 12 FY2015 SEP 1, 2015 TO SEP 30, 2015 CONTRACT VA797P-12-D-0001

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 $28.1 million.

What is the period of performance?

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

What was the specific scope of 'Pharmaceutical Preparation Manufacturing' covered by this contract?

The contract likely covered the procurement and distribution of a wide range of pharmaceuticals, including manufactured drugs, generics, and potentially specialized medications. The 'Manufacturing' aspect might refer to the vendor's role in packaging, labeling, or even some level of compounding, rather than primary drug synthesis.

How did the pricing compare to market benchmarks for similar pharmaceutical supplies during FY2015?

Without access to the specific pricing details and market data from FY2015, a direct comparison is difficult. However, the 'full and open competition' and 'firm fixed price' elements suggest an effort to achieve competitive pricing. Further analysis would require comparing unit prices against industry averages and other government contracts.

What is the typical duration for a Pharmacy Prime Vendor contract, and why was this one only for one month?

Pharmacy Prime Vendor contracts are often awarded for longer durations (e.g., multiple years) to ensure supply chain stability and leverage economies of scale. A one-month duration for a contract valued at over $28 million is unusual and might indicate a bridge contract, a specific short-term need, or a transition period before a new, longer-term contract was awarded.

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: $28,082,349

Exercised Options: $28,082,349

Current Obligation: $28,082,349

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline