VA awards $16.4M for software, with McKesson Corporation as the sole contractor in a 2-month period

Contract Overview

Contract Amount: $16,405,000 ($16.4M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-03-01

End Date: 2008-04-30

Contract Duration: 60 days

Daily Burn Rate: $273.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PPV - MARCH & APRIL 2008

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85706

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16.4 million to MCKESSON CORPORATION for work described as: PPV - MARCH & APRIL 2008 Key points: 1. The contract value represents a significant investment in software publishing services for the VA. 2. Analysis of the contract's value in relation to its short duration is key to assessing efficiency. 3. The firm-fixed-price structure suggests a defined scope and cost, reducing financial risk for the government. 4. Competition dynamics are limited, as this was a full and open competition but only one award was made. 5. The specific software provided and its impact on VA operations warrant further investigation. 6. Benchmarking this award against similar software contracts could reveal cost-effectiveness.

Value Assessment

Rating: fair

The award of $16.4 million for a 60-day period, averaging over $273,000 per day, appears high for software services. Without knowing the specific software and its criticality, it's difficult to definitively assess value. However, compared to typical software development or licensing contracts which often span longer periods or involve more extensive deliverables, this short-term, high-value award raises questions about the scope and necessity of the expenditure within such a compressed timeframe. Further details on the services rendered are needed for a more precise valuation.

Cost Per Unit: Approximately $273,417 per day, which is high for a 60-day software service contract without specific context on the software's nature and criticality.

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. Despite the open competition, only one award was made to McKesson Corporation. This suggests that while the opportunity was broadly advertised, McKesson was the only entity that met the requirements or submitted a competitive bid for this specific software publishing need within the given timeframe.

Taxpayer Impact: The full and open competition is positive for taxpayers as it theoretically allows for the best possible pricing. However, the fact that only one award resulted from this competition may indicate a lack of robust market interest or a highly specialized requirement that only McKesson could fulfill, potentially limiting price negotiation.

Public Impact

Veterans Affairs healthcare system likely benefits from the software, potentially improving administrative or clinical processes. The services delivered are related to software publishing, which could include development, maintenance, or distribution. The geographic impact is likely national, given the VA's scope, though specific deployment locations are not detailed. Workforce implications are unclear but could involve IT support staff or end-users of the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High daily expenditure rate for a short-term contract.
Limited competition outcome despite full and open solicitation.
Lack of detailed information on the specific software and its impact.

Positive Signals

Awarded through full and open competition, ensuring broad market access.
Firm-fixed-price contract type provides cost certainty.
Contract awarded to a known entity, McKesson Corporation.

Sector Analysis

The software publishing industry is a critical component of the broader technology sector, providing essential tools and platforms for various organizations. This contract falls within the NAICS code 511210 (Software Publishers). The market for specialized government software solutions is substantial, with agencies like the VA requiring robust and reliable systems. Benchmarking this award against other government software contracts of similar duration and scope would be necessary to fully assess its market competitiveness and value.

Small Business Impact

There is no indication that this contract involved small business set-asides, nor is there information on subcontracting plans. Given the nature of software publishing and the award to a large corporation like McKesson, the direct impact on the small business ecosystem is likely minimal unless McKesson engages small businesses for subcontracting work, which is not specified here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. As a purchase order (PO), it might have a less formal oversight structure than a larger, more complex contract. Transparency is limited by the available data; details on performance metrics, specific deliverables, and post-award reviews are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs IT Services
Government Software Procurement
Healthcare IT Solutions
Software Licensing and Maintenance

Risk Flags

High daily cost for a short-term contract.
Limited competition outcome despite open solicitation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16.4 million to MCKESSON CORPORATION. PPV - MARCH & APRIL 2008

Who is the contractor on this award?

The obligated recipient is MCKESSON CORPORATION.

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 $16.4 million.

What is the period of performance?

Start: 2008-03-01. End: 2008-04-30.

What specific software or services did McKesson Corporation provide under this contract?

The provided data indicates the contract falls under NAICS code 511210, 'Software Publishers,' and the award notice mentions 'Software Publishers.' However, the specific nature of the software or services provided by McKesson Corporation is not detailed in the given information. This could range from licensing existing software, providing custom software development, offering maintenance and support for software, or distributing software products. Understanding the exact deliverables is crucial for assessing the contract's value and impact on the Department of Veterans Affairs' operations.

How does the daily cost of this contract compare to industry benchmarks for similar software services?

The contract's daily cost averaged approximately $273,417 ($16.4 million / 60 days). Benchmarking this figure is challenging without knowing the specific software or services rendered. If this was for routine software licensing or basic support, the daily rate would be exceptionally high. However, if it involved complex, mission-critical software development, emergency deployment, or highly specialized data management services, the rate might be justifiable. A comparison would require identifying contracts with similar scope, complexity, and duration within the government or private sector for software publishing.

What were the key performance indicators (KPIs) or success metrics for this contract?

The provided data does not include any information regarding Key Performance Indicators (KPIs) or specific success metrics for this contract. For a firm-fixed-price contract, the primary measure of success is typically the delivery of the agreed-upon goods or services by the specified deadline and within the agreed budget. However, for software services, qualitative aspects like system performance, user satisfaction, and integration success are also important. Without defined KPIs, it is difficult to objectively assess the contractor's performance and the overall effectiveness of the award.

What is McKesson Corporation's track record with the Department of Veterans Affairs for similar software contracts?

The provided data identifies McKesson Corporation as the awardee for this specific contract. However, it does not offer details on their broader track record with the Department of Veterans Affairs (VA) or for similar software contracts. McKesson is a large healthcare services and information technology company, and their history with the VA likely spans various IT and supply chain services. A comprehensive assessment of their track record would require reviewing past contract performance evaluations, any past performance questionnaires, and other available data on their history of delivering software-related services to the VA or other federal agencies.

What is the historical spending pattern for software publishing services by the Department of Veterans Affairs?

The provided data is specific to a single contract award from March-April 2008. It does not offer historical spending patterns for the Department of Veterans Affairs (VA) in the software publishing category. To understand historical spending, one would need to analyze VA's procurement data over multiple fiscal years, identifying all contracts awarded under NAICS code 511210 or similar codes, and summing their values. This would reveal trends in spending, identify major vendors, and indicate whether this $16.4 million award was typical, unusually large, or small in the context of the VA's overall software acquisition strategy.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE POST STREET, 19TH FLR, SAN FRANCISCO, CA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,405,000

Exercised Options: $16,405,000

Current Obligation: $16,405,000

Timeline