DOJ awards McKesson $29.15M for Pharmaceutical Prep Manufacturing, serving Federal Prison System
Contract Overview
Contract Amount: $29,153,376 ($29.2M)
Contractor: Mckesson Corporation
Awarding Agency: Department of Justice
Start Date: 2025-01-03
End Date: 2025-09-30
Contract Duration: 270 days
Daily Burn Rate: $108.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: MCKESSON NON-CONTROLLED DOS: NOV 1- CR MARCH 14, 2024
Place of Performance
Location: IRVING, DALLAS County, TEXAS, 75039
State: Texas Government Spending
Plain-Language Summary
Department of Justice obligated $29.2 million to MCKESSON CORPORATION for work described as: MCKESSON NON-CONTROLLED DOS: NOV 1- CR MARCH 14, 2024 Key points: 1. Significant contract value for pharmaceutical supplies. 2. McKesson Corporation is a major player in the healthcare supply chain. 3. Potential risk related to sole-source or limited competition if not managed. 4. Spending falls within the Pharmaceutical Preparation Manufacturing sector.
Value Assessment
Rating: good
The contract value of $29.15M for a 270-day period appears reasonable for pharmaceutical supplies. Benchmarking against similar large-scale pharmaceutical procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is expected to yield fair market prices.
Taxpayer Impact: Full and open competition generally leads to better value for taxpayers by driving down costs through market forces.
Public Impact
Ensures critical pharmaceutical supplies for federal correctional facilities. Supports the operational needs of the Bureau of Prisons. Impacts patient care within the federal prison system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases if competition wanes in future.
- Dependence on a single large supplier for critical goods.
Positive Signals
- Awarded under full and open competition.
- Clear delivery period and defined scope.
- Contract supports essential government functions.
Sector Analysis
This contract falls under Pharmaceutical Preparation Manufacturing, a critical sector for healthcare and government services. Spending benchmarks for this category are typically high due to the nature of the products.
Small Business Impact
The data indicates McKesson Corporation, a large business, is the awardee. There is no explicit mention of small business participation in this specific award, suggesting opportunities may lie in subcontracting.
Oversight & Accountability
The Department of Justice's Federal Prison System is the end-user agency. Oversight would involve monitoring delivery, quality, and adherence to contract terms by the Bureau of Prisons.
Related Government Programs
- Pharmaceutical Preparation Manufacturing
- Department of Justice Contracting
- Federal Prison System / Bureau of Prisons Programs
Risk Flags
- Potential for price increases in future contracts.
- Supply chain vulnerability due to reliance on a single large vendor.
- Need for continuous market analysis to ensure ongoing competition.
- Ensuring consistent quality and efficacy of pharmaceuticals.
Tags
pharmaceutical-preparation-manufacturing, department-of-justice, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Justice awarded $29.2 million to MCKESSON CORPORATION. MCKESSON NON-CONTROLLED DOS: NOV 1- CR MARCH 14, 2024
Who is the contractor on this award?
The obligated recipient is MCKESSON CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).
What is the total obligated amount?
The obligated amount is $29.2 million.
What is the period of performance?
Start: 2025-01-03. End: 2025-09-30.
What is the historical pricing trend for McKesson's pharmaceutical supplies to the government?
Analyzing historical pricing data for McKesson's pharmaceutical supplies to the government is crucial for understanding cost trends and identifying potential escalations. This would involve comparing prices paid in previous contracts or delivery orders against current award prices, considering inflation and market dynamics. Without this historical context, it's difficult to definitively assess if the current $29.15M award represents a favorable or unfavorable price point over time.
What are the specific risks associated with relying on a single large supplier like McKesson for essential pharmaceuticals?
Relying on a single large supplier like McKesson presents several risks, including potential supply chain disruptions due to unforeseen events (e.g., natural disasters, labor disputes), limited negotiation leverage for future contracts, and the possibility of price gouging if competition is not actively maintained. It also raises concerns about vendor lock-in and the ability to quickly pivot to alternative suppliers if needed.
How effectively does this contract ensure the availability and quality of pharmaceuticals for federal inmates?
The effectiveness of this contract in ensuring availability and quality hinges on robust contract management and performance monitoring by the Bureau of Prisons. Key performance indicators related to on-time delivery, product integrity, and adherence to specifications are vital. Regular audits and quality control checks are necessary to confirm that McKesson is meeting all contractual obligations and that the pharmaceuticals provided are safe and effective for inmate use.
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
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6555 STATE HIGHWAY 161, IRVING, TX, 75039
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $29,153,376
Exercised Options: $29,153,376
Current Obligation: $29,153,376
Actual Outlays: $29,159,806
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 36W79720D0001
IDV Type: IDC
Timeline
Start Date: 2025-01-03
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-11-19
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