DoD's $35.4M Pharmacy Automation Contract to ScriptPro USA Inc. Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $35,395,526 ($35.4M)

Contractor: Scriptpro USA Inc

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2024-01-31

Contract Duration: 2,009 days

Daily Burn Rate: $17.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACY OUTPATIENT AUTOMATION SOLUTION SUPPORT SERVICES.

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to SCRIPTPRO USA INC for work described as: PHARMACY OUTPATIENT AUTOMATION SOLUTION SUPPORT SERVICES. Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements, suggesting effective price negotiation. 2. While awarded under full and open competition, the limited number of bidders warrants scrutiny for potential price impacts. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance duration of over five years provides stability for critical pharmacy operations. 5. This contract supports the Defense Health Agency's mission to provide healthcare services to military personnel and their families. 6. The procurement falls within the Surgical and Medical Instrument Manufacturing sector, indicating a specialized need.

Value Assessment

Rating: good

The contract's total value of approximately $35.4 million over its period of performance appears to be within a reasonable range when compared to industry benchmarks for similar pharmacy automation support services. The firm-fixed-price (FFP) contract type suggests that the government has secured predictable costs, which is a positive indicator of value. While specific per-unit cost data is not provided, the overall contract value relative to the duration and scope of services suggests a fair price was negotiated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the data suggests only one bid was received. This limited number of bidders, despite the open competition, could suggest a highly specialized market or potential barriers to entry for other firms. It raises questions about whether the full competitive potential was realized, which could impact price discovery.

Taxpayer Impact: A single bid under full and open competition means taxpayers may not have benefited from the lowest possible price that could have been achieved with broader participation. While the price may be fair, it's less likely to be the absolute lowest achievable.

Public Impact

Military personnel and their families directly benefit from efficient and accurate pharmacy services enabled by this automation solution. The contract ensures the continued operation and support of pharmacy automation systems within military healthcare facilities. Geographic impact is nationwide, covering various Defense Health Agency facilities that rely on these pharmacy services. Workforce implications include the potential for pharmacy technicians and pharmacists to focus on patient care rather than manual dispensing tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders despite full and open competition could indicate potential market concentration or barriers to entry.
Lack of detailed per-unit cost data makes granular value-for-money assessment challenging.
Long contract duration could lead to vendor lock-in if not managed carefully.

Positive Signals

Firm-fixed-price contract type provides cost certainty and mitigates risk of cost overruns for the government.
Awarded under full and open competition, theoretically allowing for broad market participation.
Contract supports critical healthcare services for the military community.

Sector Analysis

The contract falls within the broader Surgical and Medical Instrument Manufacturing sector (NAICS 339112), though its primary function is service support for pharmacy automation. This sector is characterized by innovation and stringent quality requirements. The market for pharmacy automation solutions is competitive, with several key players offering integrated systems and support. Spending in this area is driven by the need for efficiency, accuracy, and cost savings in healthcare settings, particularly within large government healthcare systems like the DHA.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) and 'sb' (small business) flags are false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, ScriptPro USA Inc., is likely a large business, and opportunities for small businesses within this specific procurement may be limited unless they are part of the supply chain or subcontracted indirectly.

Oversight & Accountability

Oversight for this contract would typically reside with the Defense Health Agency (DHA) contracting officers and program managers. The firm-fixed-price nature of the contract simplifies some oversight by fixing costs, but performance monitoring remains crucial. Accountability measures would involve tracking service level agreements, system uptime, and user satisfaction. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Health Agency Medical Support Contracts
Pharmacy Services Contracts
Medical Equipment Maintenance and Support
Federal Healthcare IT Solutions
Military Medical Logistics

Risk Flags

Limited competition despite full and open award
Potential for vendor lock-in due to specialized technology
Long contract duration requires ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to SCRIPTPRO USA INC. PHARMACY OUTPATIENT AUTOMATION SOLUTION SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is SCRIPTPRO USA INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2018-08-01. End: 2024-01-31.

What is ScriptPro USA Inc.'s track record with federal contracts, particularly within the Department of Defense?

ScriptPro USA Inc. has a history of securing contracts with the federal government, including significant engagements with the Department of Defense and the Department of Veterans Affairs. Their primary focus is on providing pharmacy automation solutions, encompassing dispensing systems, inventory management, and related software and support services. Analysis of federal procurement data reveals multiple awards to ScriptPro, often for similar pharmacy automation support and maintenance. While specific performance details for each contract are not always public, their continued success in winning competitive bids suggests a generally positive track record and established capability in meeting the requirements of government healthcare agencies. The longevity and value of these contracts indicate a level of trust and satisfaction from the awarding agencies.

How does the $35.4 million value compare to similar pharmacy automation support contracts awarded by the government?

Benchmarking the $35.4 million contract value requires comparing it against similar procurements for pharmacy automation support services over comparable timeframes. Contracts for large-scale pharmacy automation systems and their ongoing support can range significantly based on the scope, number of facilities served, and the specific technologies deployed. For a multi-year contract (approximately six years in this case, from Aug 2018 to Jan 2024), a total value of $35.4 million translates to an average annual expenditure of roughly $5.9 million. This figure appears reasonable when considering the complexity of maintaining and supporting advanced automation systems within a large healthcare network like the Defense Health Agency. Similar contracts for enterprise-level pharmacy automation support in other federal agencies or large hospital systems often fall within a similar annual spending bracket, suggesting this contract represents fair market value.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential vendor lock-in due to the specialized nature of pharmacy automation systems, the risk of performance degradation over the contract's long duration, and the possibility of unforeseen technological obsolescence. Mitigation strategies are embedded within the contract structure and oversight. The firm-fixed-price (FFP) nature of the contract helps mitigate financial risks related to cost overruns. Performance monitoring by the Defense Health Agency is crucial for ensuring the vendor meets service level agreements and maintains system functionality. The contract's duration, while providing stability, also necessitates careful management to ensure the technology remains current and effective. Furthermore, the requirement for ongoing support and maintenance inherently addresses the risk of system failure, ensuring continuity of pharmacy operations.

What is the expected program effectiveness and impact on pharmacy operations within the DoD?

The expected program effectiveness is high, aiming to enhance the efficiency, accuracy, and speed of pharmacy operations within the Department of Defense. Pharmacy automation systems are designed to reduce manual errors in prescription filling, improve inventory management, and streamline workflows, allowing pharmacists and technicians to dedicate more time to patient counseling and clinical services. This contract's support ensures these systems remain operational and up-to-date, directly contributing to the quality and reliability of pharmaceutical care provided to military personnel and their families. The impact is a more robust, error-resistant, and efficient pharmacy service, which is critical for maintaining the health and readiness of the armed forces.

How has federal spending on pharmacy automation solutions evolved over the past decade?

Federal spending on pharmacy automation solutions has seen a steady increase over the past decade, driven by the healthcare sector's broader push for efficiency, cost reduction, and improved patient safety. Agencies like the Department of Defense (DoD) and the Department of Veterans Affairs (VA) have consistently invested in these technologies to manage large volumes of prescriptions across numerous facilities. This trend reflects a recognition of the return on investment through reduced dispensing errors, optimized inventory, and better staff utilization. While specific aggregate spending figures fluctuate annually based on new procurements and contract renewals, the overall trajectory indicates a sustained commitment to leveraging automation in federal pharmacy operations. Factors influencing this include technological advancements, evolving healthcare regulations, and the ongoing need to support a large beneficiary population.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001118R0035

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Scriptpro LLC

Address: 5828 REEDS RD, SHAWNEE MISSION, KS, 66202

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

Financial Breakdown

Contract Ceiling: $35,611,698

Exercised Options: $35,395,526

Current Obligation: $35,395,526

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797P4237B

IDV Type: FSS

Timeline