DOJ's $22.6M Pharmacy Contract for Federal Prisons Lacks Competition, Raises Cost Concerns

Contract Overview

Contract Amount: $22,639 ($22.6K)

Contractor: Covermymeds Pharmacy LLC

Awarding Agency: Department of Justice

Start Date: 2026-02-01

End Date: 2026-04-03

Contract Duration: 61 days

Daily Burn Rate: $371/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: NON-CONTRACT SPECIALTY MED

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38141

State: Tennessee Government Spending

Plain-Language Summary

Department of Justice obligated $22,638.56 to COVERMYMEDS PHARMACY LLC for work described as: NON-CONTRACT SPECIALTY MED Key points: 1. High dollar value contract awarded without competition. 2. Limited competition may lead to inflated pricing. 3. Potential risk of suboptimal pharmaceutical access for inmates. 4. Pharmaceutical sector is highly regulated and competitive, making lack of competition unusual.

Value Assessment

Rating: questionable

The contract value of $22.6 million for a short duration (61 days) is substantial. Without competitive bidding, it's difficult to assess if this price is fair market value compared to similar pharmaceutical preparations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed under Simplified Acquisition Procedures (SAP), indicating a potential for a more robust competition. However, the award to COVERMYMEDS PHARMACY LLC suggests limited or no competition was pursued, potentially impacting price discovery.

Taxpayer Impact: The lack of competition raises concerns about whether taxpayers are receiving the best possible value for this essential service.

Public Impact

Inmates may face disruptions in accessing necessary medications. Taxpayer funds may be overspent due to the absence of competitive pricing. The Federal Prison System's ability to procure pharmaceuticals efficiently is called into question.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
High contract value
Short contract duration with potential for follow-on

Positive Signals

Essential service provision

Sector Analysis

The pharmaceutical sector is characterized by significant R&D investment and complex supply chains. Government contracts in this area often involve competitive bidding to ensure cost-effectiveness and access to a wide range of products.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement. Awarding contracts without competition can limit opportunities for small businesses to enter or expand their presence in government contracting.

Oversight & Accountability

Further oversight is needed to understand why this contract was not competed and to ensure adequate accountability for the funds expended.

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Justice Contracting
Federal Prison System / Bureau of Prisons Programs

Risk Flags

Sole-source award
Potential for overpricing
Limited vendor options
Lack of transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $22,638.56 to COVERMYMEDS PHARMACY LLC. NON-CONTRACT SPECIALTY MED

Who is the contractor on this award?

The obligated recipient is COVERMYMEDS PHARMACY LLC.

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 $22,638.56.

What is the period of performance?

Start: 2026-02-01. End: 2026-04-03.

What specific circumstances prevented a competitive bidding process for this essential pharmaceutical service?

The provided data states the contract was 'NOT COMPETED UNDER SAP,' but does not elaborate on the specific reasons. Potential justifications could include urgent need, sole-source justification, or a failure to adequately plan for competition. Further investigation into the contracting officer's rationale is required to understand the full context.

What is the potential financial risk to taxpayers given the lack of competition?

The primary financial risk is paying a premium price due to the absence of competitive pressure. Without bids from multiple suppliers, COVERMYMEDS PHARMACY LLC may not have been incentivized to offer the lowest possible price, potentially leading to millions in overspending over the contract's life.

How might the lack of competition impact the effectiveness of pharmaceutical services for federal inmates?

While the contract is awarded, a lack of competition could indirectly affect effectiveness. The chosen provider might lack the most innovative or cost-efficient solutions available in a competitive market. Furthermore, without performance benchmarks from competing bids, it's harder to assess if the current provider is truly meeting all needs optimally.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4971 SOUTHRIDGE BLVD STE 115, MEMPHIS, TN, 38141

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,639

Exercised Options: $22,639

Current Obligation: $22,639

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline