HHS's Indian Health Service awards $250K contract for pharmaceutical supplies to McKesson Corporation

Contract Overview

Contract Amount: $250,000 ($250.0K)

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2026-03-24

End Date: 2027-08-23

Contract Duration: 517 days

Daily Burn Rate: $484/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73114

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $250,000 to MCKESSON CORPORATION for work described as: PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS. Key points: 1. McKesson Corporation, a major player, secures this contract. 2. The contract is competed under SAP, indicating a structured procurement process. 3. Potential risks include supply chain disruptions and price fluctuations for essential medicines. 4. The pharmaceutical sector is critical for public health, with significant government spending.

Value Assessment

Rating: good

The contract value of $250,000 is relatively small. Benchmarking against similar open market purchases for pharmaceutical supplies would be necessary to fully assess pricing, but the competitive nature suggests reasonable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), which is designed for smaller purchases and promotes competition. This method likely led to competitive pricing discovery.

Taxpayer Impact: The relatively small contract value suggests a minimal direct taxpayer impact, but ensuring cost-effectiveness for essential medicines is crucial for overall healthcare spending.

Public Impact

Ensures availability of essential pharmaceutical supplies for IHS customers. Supports public health initiatives by providing necessary medications. Potential for price volatility in the pharmaceutical market could impact future costs.

Waste & Efficiency Indicators

Waste Risk Score: 48 / 10

Warning Flags

Reliance on a single vendor for a critical supply.
Potential for price increases in the pharmaceutical market.
Supply chain vulnerabilities affecting drug availability.

Positive Signals

Competitive bidding process under SAP.
Contract duration provides supply stability.
Established vendor with a track record.

Sector Analysis

This contract falls within the pharmaceutical wholesale and distribution sector. Government spending in this area is substantial, driven by the need for essential medicines across various agencies. Benchmarks for similar supply contracts are often tied to negotiated pricing agreements and market indices.

Small Business Impact

The data does not indicate any specific involvement or benefit for small businesses in this particular contract award. The focus appears to be on established suppliers within the pharmaceutical wholesale market.

Oversight & Accountability

The contract is managed by the Indian Health Service, a division of HHS. Standard procurement regulations and oversight apply, ensuring compliance with federal acquisition rules. The use of SAP suggests a streamlined oversight process for this value threshold.

Related Government Programs

Drugs and Druggists' Sundries Merchant Wholesalers
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Potential for price increases in the pharmaceutical market.
Reliance on a single vendor for critical supplies.
Supply chain disruptions impacting availability.
Limited transparency on specific drug pricing within the total award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $250,000 to MCKESSON CORPORATION. PHARMACEUTICAL SUPPLIES, OPEN MARKET PURCHASES FOR NSSC CUSTOMERS.

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $250,000.

What is the period of performance?

Start: 2026-03-24. End: 2027-08-23.

What is the historical pricing trend for these specific pharmaceutical supplies purchased through similar open market contracts?

Analyzing historical pricing data for these specific pharmaceutical supplies is crucial. Without it, it's difficult to definitively assess if the current $250,000 award represents a cost-effective procurement. Comparing unit prices against previous awards or market indices for similar drugs would provide a clearer picture of value for taxpayer money and identify any significant price escalations.

What are the contingency plans in place to mitigate supply chain risks for these essential pharmaceuticals?

Given the critical nature of pharmaceutical supplies, understanding contingency plans is vital. This includes assessing the vendor's (McKesson Corporation) inventory management, alternative sourcing strategies, and emergency distribution protocols. Robust contingency planning helps ensure uninterrupted access to necessary medications for IHS customers, even in the face of unforeseen disruptions like natural disasters or public health emergencies.

How does the pricing of these supplies compare to direct manufacturer purchases or other government-wide contract vehicles?

Comparing the pricing of these open market purchases to other procurement avenues is essential for evaluating effectiveness. If direct manufacturer contracts or larger government-wide vehicles (like GSA schedules) offer significantly lower prices for the same or comparable pharmaceuticals, it suggests this open market approach may not be the most cost-efficient method for the IHS. This comparison helps optimize future procurement strategies.

Industry Classification

NAICS: Wholesale Trade › Drugs and Druggists' Sundries Merchant Wholesalers › Drugs and Druggists' Sundries Merchant Wholesalers

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6535 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: $250,000

Exercised Options: $250,000

Current Obligation: $250,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75H71122A00161

IDV Type: BPA

Timeline