DoD's $26.9M Pharmacy Benefit Management Contract Awarded to National Sourcing, Inc. for Support Services
Contract Overview
Contract Amount: $26,898,084 ($26.9M)
Contractor: National Sourcing, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-07-18
End Date: 2016-08-03
Contract Duration: 1,843 days
Daily Burn Rate: $14.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: SUPPORT SERVICES
Place of Performance
Location: FORT KNOX, HARDIN County, KENTUCKY, 40122
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $26.9 million to NATIONAL SOURCING, INC. for work described as: SUPPORT SERVICES Key points: 1. The contract's value of $26.9 million over its period of performance suggests a significant investment in pharmacy benefit management. 2. Competition dynamics indicate a 'full and open competition after exclusion of sources,' which warrants further investigation into the rationale for exclusion. 3. The definitive contract type and firm-fixed-price award suggest a clear scope and predictable costs, potentially mitigating financial risk. 4. Performance context is limited without specific metrics on the effectiveness of the pharmacy benefit management services provided. 5. The contract falls within the broader healthcare sector, specifically focusing on third-party administration of insurance and pension funds. 6. The award to National Sourcing, Inc. represents a substantial allocation of resources for essential healthcare support services within the Department of Defense.
Value Assessment
Rating: fair
Benchmarking the value of this $26.9 million contract for pharmacy benefit management is challenging without specific performance metrics or comparable contract data. The firm-fixed-price award suggests cost certainty for the government. However, the absence of detailed service delivery outcomes makes a comprehensive value-for-money assessment difficult. Further analysis would require understanding the scope of services and the impact on healthcare costs and beneficiary satisfaction.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'full and open competition after exclusion of sources.' This designation implies that while the competition was intended to be broad, specific sources were excluded, potentially limiting the pool of bidders. The exact reasons for this exclusion are not detailed, which could impact the government's ability to secure the most competitive pricing and innovative solutions.
Taxpayer Impact: The exclusion of certain sources, even in a broadly competed environment, may have reduced the competitive pressure, potentially leading to higher costs for taxpayers than if all potential bidders had participated.
Public Impact
Beneficiaries of this contract are likely Department of Defense personnel and their dependents, who receive pharmacy benefits. The services delivered include pharmacy benefit management and third-party administration of insurance and pension funds, aiming to streamline healthcare access and costs. The geographic impact is likely widespread, covering military installations and personnel across various locations. Workforce implications may include the employment of administrative staff and healthcare professionals involved in managing pharmacy benefits.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The 'exclusion of sources' in a 'full and open competition' raises concerns about potential limitations on competitive pricing and innovation.
- Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the services provided.
- The broad nature of 'support services' could mask inefficiencies if not tightly managed and monitored.
Positive Signals
- The firm-fixed-price contract type provides cost predictability for the government.
- The definitive contract structure suggests a well-defined scope of work.
- The contract duration of 1843 days indicates a stable, long-term relationship for essential services.
Sector Analysis
This contract falls within the healthcare sector, specifically focusing on the administrative and management aspects of pharmaceutical benefits. The market for Pharmacy Benefit Managers (PBMs) is substantial, with significant government spending in this area to control drug costs and manage formularies. Comparable spending benchmarks would typically involve analyzing other large-scale PBM contracts within federal agencies or large private healthcare systems.
Small Business Impact
Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. Given the nature of pharmacy benefit management, which often requires specialized infrastructure and expertise, it is possible that large, established firms are primary contractors. Further investigation would be needed to determine if small businesses had opportunities to participate as subcontractors or in specific niche areas.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers and potentially Inspector General's office. Accountability measures would be tied to the contract's performance clauses and reporting requirements. Transparency is generally facilitated through contract databases, but detailed operational oversight information is often internal.
Related Government Programs
- TRICARE Pharmacy Program
- Department of Veterans Affairs Pharmacy Benefits Management
- Federal Employee Health Benefits (FEHB) Program Pharmacy Services
Risk Flags
- Potential for reduced competition due to source exclusion.
- Lack of transparency regarding performance metrics.
- Need for further clarification on the scope of 'support services'.
Tags
healthcare, pharmacy-benefit-management, department-of-defense, department-of-the-army, definitive-contract, firm-fixed-price, limited-competition, support-services, insurance-administration, pension-administration, kentucky, national-sourcing-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.9 million to NATIONAL SOURCING, INC.. SUPPORT SERVICES
Who is the contractor on this award?
The obligated recipient is NATIONAL SOURCING, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $26.9 million.
What is the period of performance?
Start: 2011-07-18. End: 2016-08-03.
What specific pharmacy benefit management services were included under this contract?
The contract data indicates 'Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds.' This typically encompasses services such as claims processing, formulary management, drug utilization review, negotiating rebates with pharmaceutical manufacturers, and managing mail-order or retail pharmacy networks. The 'other third party administration' aspect suggests it may also cover broader administrative functions related to insurance and pension plans for DoD personnel, ensuring efficient delivery of benefits and cost control.
What was the rationale for excluding certain sources in this 'full and open competition after exclusion of sources' award?
The designation 'full and open competition after exclusion of sources' implies that while the competition was intended to be broad, specific potential bidders were deliberately excluded. The rationale for such exclusions is typically documented by the procuring agency and can be based on factors like past performance issues, inability to meet specific technical requirements, or national security concerns. Without access to the agency's justification documentation, the precise reasons remain unclear, but it suggests a deliberate narrowing of the competitive field from an initially open solicitation.
How does the $26.9 million contract value compare to similar pharmacy benefit management contracts within the federal government?
Comparing the $26.9 million value requires context regarding the contract's duration and scope. This contract spanned approximately five years (July 2011 to August 2016). Large-scale PBM contracts, such as those for the TRICARE program or the Department of Veterans Affairs, can run into billions of dollars over similar or longer periods, reflecting the vast number of beneficiaries and the complexity of managing pharmaceutical benefits for entire healthcare systems. This $26.9 million contract appears to be of moderate size, likely serving a specific segment or region within the DoD.
What were the key performance indicators (KPIs) used to evaluate National Sourcing, Inc.'s performance under this contract?
The provided data does not specify the key performance indicators (KPIs) used to evaluate National Sourcing, Inc.'s performance. Typically, for pharmacy benefit management contracts, KPIs would include metrics related to cost savings (e.g., achieved rebates, reduced drug spend), formulary compliance, network adequacy, member satisfaction, claims processing accuracy and timeliness, and adherence to regulatory requirements. Without these specific metrics, a thorough assessment of the contractor's effectiveness and value for money is not possible.
What is the historical spending trend for pharmacy benefit management services within the Department of the Army?
The provided data only details a single contract award of $26.9 million to National Sourcing, Inc. for support services including PBM from 2011 to 2016. To understand historical spending trends for pharmacy benefit management within the Department of the Army, a broader analysis of contract awards over multiple fiscal years would be necessary. This would involve examining spending across various PBM contracts, including those awarded to different contractors and potentially covering different scopes of service or beneficiary populations, to identify patterns, growth, or shifts in investment.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9124D11R0015
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8402 LAUREL FAIR CIR STE 207, TAMPA, FL, 33610
Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $26,898,084
Exercised Options: $26,898,084
Current Obligation: $26,898,084
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $10,997,805
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2011-07-18
Current End Date: 2016-08-03
Potential End Date: 2016-08-03 00:00:00
Last Modified: 2016-06-22
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