McKesson Corporation awarded $250K contract for pharmaceutical supplies to Indian Health Service

Contract Overview

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

Contractor: Mckesson Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2026-03-27

End Date: 2027-08-23

Contract Duration: 514 days

Daily Burn Rate: $486/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. Contract awarded via BPA Call under a competitive process. 2. Firm Fixed Price contract type suggests predictable costs. 3. Duration of 514 days provides a medium-term supply. 4. No specific small business set-aside noted, but subcontracting potential exists. 5. The contract falls within the Drugs and Druggists' Sundries Merchant Wholesalers NAICS code. 6. Awarded by the Indian Health Service, a division of HHS.

Value Assessment

Rating: good

The contract value of $250,000 for pharmaceutical supplies over approximately 17 months appears reasonable given the scope. Benchmarking against similar open market purchases for NSSC customers would provide a more precise value-for-money assessment. The firm fixed price structure helps mitigate cost overruns, contributing to a good value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under SAP (Simplified Acquisition Procedures), indicating a competitive process suitable for smaller dollar values. While the specific number of bidders is not provided, SAP generally encourages a reasonable level of competition. The use of a BPA Call suggests that a broader contract vehicle was already in place and competed, with this being a call against that.

Taxpayer Impact: The competitive nature of the award, even under SAP, is beneficial for taxpayers as it likely led to more favorable pricing than a sole-source procurement.

Public Impact

Beneficiaries include patients served by the Indian Health Service (IHS) facilities. Services delivered are the provision of essential pharmaceutical supplies. Geographic impact is likely focused on IHS facilities within the Oklahoma region. Workforce implications are minimal, primarily related to logistics and distribution of supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders in the competitive process.
Potential for price fluctuations in the pharmaceutical market not fully captured by fixed price if raw material costs change significantly.

Positive Signals

Awarded through a competitive process (SAP).
Firm Fixed Price contract type provides cost certainty.
Contract duration aligns with supply needs for the period.
Awarded to a known entity in the pharmaceutical supply chain.

Sector Analysis

The pharmaceutical wholesale and distribution sector is a critical component of the healthcare industry, ensuring the availability of medications. This contract fits within the broader market for drug wholesalers, which is substantial. Comparable spending benchmarks would involve analyzing other IHS or federal procurements for similar pharmaceutical supplies, considering volume and specific drug categories.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). However, McKesson Corporation, as a large prime contractor, may engage small businesses for subcontracting opportunities related to logistics, delivery, or specialized services, though this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Indian Health Service and the Department of Health and Human Services. Standard procurement regulations and contract management practices would apply. Transparency is facilitated by contract award databases, and any specific Inspector General jurisdiction would depend on the nature of any potential issues arising.

Related Government Programs

Department of Defense Pharmaceutical Prime Vendor Program
Federal Supply Schedule (FSS) for Medical Equipment and Pharmaceuticals
Strategic National Stockpile (SNS) procurements

Risk Flags

Supply Chain Vulnerability
Price Volatility Risk
Quality Assurance Concerns
Dependence on Single Supplier for Specific Items

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: 2026-03-27. End: 2027-08-23.

What is McKesson Corporation's track record with the Indian Health Service and other federal agencies for pharmaceutical supply contracts?

McKesson Corporation is a major pharmaceutical distributor with extensive experience serving federal agencies, including the Indian Health Service (IHS) and the Department of Defense. They are a frequent awardee of large-scale contracts for pharmaceutical supplies, often through prime vendor agreements and federal supply schedules. Their track record generally indicates a capacity to manage complex supply chains and meet significant demand. However, like any large contractor, they have faced scrutiny and occasional disputes regarding pricing, delivery performance, and market practices in the past. A detailed review of past performance evaluations and any contract disputes specific to IHS or similar agencies would be necessary for a comprehensive assessment.

How does the $250,000 contract value compare to typical IHS pharmaceutical procurements of similar scope?

The $250,000 contract value for pharmaceutical supplies is relatively modest for a federal agency like the Indian Health Service, which often manages much larger, multi-year contracts for its broad network of facilities. This specific award, being a BPA Call, suggests it might be for a specific, limited need or a particular set of items rather than a comprehensive supply agreement. To benchmark effectively, one would need to compare it against other BPA Calls or smaller procurements made by IHS for similar categories of drugs and sundries, considering the quantity and duration. Without more granular data on the specific items procured and the number of facilities served by this BPA Call, a precise comparison is difficult, but it appears to be a targeted procurement.

What are the primary risks associated with this specific pharmaceutical supply contract?

The primary risks associated with this contract include potential supply chain disruptions, which can affect any pharmaceutical procurement, especially given global dependencies. Price volatility in the pharmaceutical market, although somewhat mitigated by the firm fixed price, could still pose a risk if unforeseen market shifts occur. Another risk is ensuring the quality and efficacy of the drugs supplied, necessitating robust quality control measures by both the contractor and the IHS. Furthermore, if this BPA Call represents a significant portion of a particular drug's supply for certain IHS facilities, any interruption could have a direct impact on patient care. The limited scope indicated by the contract value might also mean that alternative suppliers are not readily available for these specific items under this call.

What is the expected program effectiveness and impact on IHS patient care?

The expected program effectiveness hinges on the reliable and timely delivery of the contracted pharmaceutical supplies to the designated Indian Health Service facilities. If McKesson Corporation fulfills the contract terms efficiently, the impact on IHS patient care should be positive, ensuring that healthcare providers have access to necessary medications. This contributes to the continuity of care and the ability to treat a range of medical conditions effectively. The effectiveness is directly tied to the contractor's performance in maintaining adequate stock levels, ensuring product integrity, and meeting delivery schedules. Successful execution of this contract supports the IHS mission of providing comprehensive healthcare services to American Indians and Alaska Natives.

How has federal spending on pharmaceutical supplies through the Indian Health Service trended over the past five years?

Federal spending on pharmaceutical supplies through the Indian Health Service (IHS) has generally trended upwards over the past five years, reflecting increasing healthcare demands and rising drug costs. While specific figures fluctuate based on agency budgets, program expansions, and public health needs (such as during the COVID-19 pandemic), the overall trajectory indicates a sustained investment in ensuring access to medications for its patient population. The IHS relies on a mix of contract vehicles, including large prime vendor agreements, Federal Supply Schedules, and open market purchases like this BPA Call, to procure these essential supplies. Analyzing detailed IHS budget reports and contract award databases would provide precise year-over-year spending trends and highlight shifts in 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