VA awards $1.29M pharmacy contract to D & R Pharmaceutical Services for Kentucky veterans

Contract Overview

Contract Amount: $1,292,230 ($1.3M)

Contractor: D & R Pharmaceutical Services, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-12-31

End Date: 2025-12-31

Contract Duration: 365 days

Daily Burn Rate: $3.5K/day

Competition Type: NOT COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACY DISPENSING SERVICES FOR KENTUCKY STATE VETERANS HOMES

Place of Performance

Location: FLORENCE, BOONE County, KENTUCKY, 41042

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.3 million to D & R PHARMACEUTICAL SERVICES, LLC for work described as: PHARMACY DISPENSING SERVICES FOR KENTUCKY STATE VETERANS HOMES Key points: 1. Contract value of $1.29M for a 1-year period. 2. Awarded on a sole-source basis, limiting competitive pricing. 3. Performance period runs through December 31, 2025. 4. No small business set-aside was utilized. 5. The contract type is Firm Fixed Price, providing cost certainty. 6. The North American Industry Classification System (NAICS) code is 456110 (Pharmacies and Drug Retailers).

Value Assessment

Rating: fair

The contract value of $1.29M for one year of pharmacy dispensing services appears to be within a reasonable range for supporting veterans in Kentucky. However, without specific details on the volume of prescriptions or the types of medications dispensed, a precise value-for-money assessment is challenging. Benchmarking against similar sole-source contracts for pharmacy services within the VA or other federal agencies would provide a clearer picture of whether this pricing is competitive or inflated due to the lack of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This means that only one vendor, D & R Pharmaceutical Services, LLC, was solicited and awarded the contract. The lack of competition raises concerns about whether the government obtained the best possible price and service.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of a competitive bidding process. Without multiple offers, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

Veterans residing in Kentucky will benefit from continued access to essential pharmacy dispensing services. The contract ensures the provision of prescription medications and related pharmaceutical support. Services are geographically focused within Kentucky, supporting state veterans homes. The contract supports the operational needs of the Department of Veterans Affairs in fulfilling its mission to care for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the procurement process due to sole-source nature.
Performance metrics and quality assurance details are not publicly available for this award.

Positive Signals

Firm Fixed Price contract provides cost certainty for the VA.
Contract ensures continuity of essential pharmacy services for Kentucky veterans.
The contractor, D & R Pharmaceutical Services, LLC, is being utilized to fulfill a specific need.

Sector Analysis

The pharmacy and drug retail sector (NAICS 456110) is a critical component of the healthcare industry, providing essential medications to the public. Federal spending in this sector often involves large contracts for military bases, veterans' facilities, and public health programs. While specific benchmarks for sole-source pharmacy dispensing services are difficult to ascertain, the overall market is competitive, making sole-source awards a point of scrutiny for value.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract, potentially impacting the small business ecosystem for pharmacy services within this geographic area.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. Given it's a sole-source award, the justification for this procurement method would be subject to internal VA review and potentially oversight from the Government Accountability Office (GAO) if protested. Transparency regarding the justification for the sole-source award and performance monitoring would be key accountability measures.

Related Government Programs

VA Pharmacy Benefits Management
TRICARE Pharmacy Program
Federal Supply Schedule (FSS) for Pharmaceuticals

Risk Flags

Sole-source award raises concerns about price competition.
Lack of publicly available justification for sole-source procurement.
Limited transparency on specific performance metrics and quality assurance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.3 million to D & R PHARMACEUTICAL SERVICES, LLC. PHARMACY DISPENSING SERVICES FOR KENTUCKY STATE VETERANS HOMES

Who is the contractor on this award?

The obligated recipient is D & R PHARMACEUTICAL SERVICES, LLC.

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 $1.3 million.

What is the period of performance?

Start: 2024-12-31. End: 2025-12-31.

What is the justification for awarding this contract on a sole-source basis?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of providing the required service. This could be due to unique capabilities, proprietary technology, or urgent and compelling circumstances. A thorough review of the contract file and any associated justifications (e.g., Justification and Approval - J&A) would be necessary to understand the specific reasons why D & R Pharmaceutical Services, LLC was the only viable option for this pharmacy dispensing contract.

How does the $1.29M contract value compare to similar VA pharmacy contracts?

Comparing this $1.29M contract value requires detailed information on the scope of services, patient population served, and duration. Without these specifics, a direct comparison is difficult. However, the Department of Veterans Affairs (VA) manages numerous pharmacy contracts across the country, ranging from large-scale distribution agreements to localized dispensing services. The value of such contracts can vary significantly based on the number of veterans served and the complexity of pharmaceutical needs. Given this is a sole-source award for one year, it's crucial to benchmark against other sole-source or competitively awarded contracts for similar services in comparable geographic regions to assess if the pricing is competitive.

What are the potential risks associated with a sole-source pharmacy contract?

The primary risk associated with a sole-source pharmacy contract is the potential for inflated pricing due to the lack of competition. Without competing offers, the government may not achieve the best possible value for its money. Other risks include reduced innovation, as there is less incentive for the sole provider to improve services or adopt new technologies. Furthermore, reliance on a single provider can create vulnerabilities if that provider experiences performance issues, financial instability, or supply chain disruptions. Ensuring robust contract oversight and performance management becomes even more critical in sole-source situations.

What is the expected performance standard for D & R Pharmaceutical Services, LLC under this contract?

The provided data indicates the contract type is Firm Fixed Price (FFP) and the award is for Pharmacy Dispensing Services. While specific performance standards are not detailed in the summary data, FFP contracts generally require the contractor to deliver the specified goods or services at a fixed price, regardless of the contractor's actual costs. Performance expectations would typically be outlined in the Performance Work Statement (PWS) or Statement of Work (SOW) within the full contract. These would likely include requirements related to timely prescription fulfillment, accuracy, inventory management, compliance with regulations (e.g., HIPAA), and potentially customer service levels for veterans.

What is the historical spending pattern for pharmacy dispensing services in Kentucky for the VA?

Historical spending data for pharmacy dispensing services in Kentucky by the VA is not provided in the summary. To analyze this, one would need to access historical contract databases (like FPDS or SAM.gov) and filter for contracts awarded by the Department of Veterans Affairs to pharmacies or pharmaceutical service providers within Kentucky. Examining past awards, including their values, durations, and whether they were competed or sole-source, would reveal spending trends, identify incumbent contractors, and provide context for the current $1.29M award. This analysis is crucial for understanding if this award represents an increase or decrease in spending and whether competition has been a consistent factor.

Industry Classification

NAICS: Retail Trade › Health and Personal Care Retailers › Pharmacies and Drug Retailers

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 ARISTOCRAT DR STE B, FLORENCE, KY, 41042

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,292,230

Exercised Options: $1,292,230

Current Obligation: $1,292,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24923D0108

IDV Type: IDC

Timeline