VA Spends $14.6M on Pharmaceuticals in March 2009 with McKesson Corporation

Contract Overview

Contract Amount: $14,630,385 ($14.6M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-03-01

End Date: 2009-03-31

Contract Duration: 30 days

Daily Burn Rate: $487.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PRIMARY PHARMACEUTICAL VENDOR - MARCH 2009

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85706

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $14.6 million to MCKESSON CORPORATION for work described as: PRIMARY PHARMACEUTICAL VENDOR - MARCH 2009 Key points: 1. Significant spending on pharmaceuticals highlights the VA's reliance on key vendors. 2. McKesson Corporation is a major player in the pharmaceutical distribution market. 3. The contract's fixed price structure aims to control costs, but monitoring is crucial. 4. This spending falls within the broader healthcare sector's pharmaceutical procurement trends.

Value Assessment

Rating: good

The $14.6 million expenditure for a single month appears substantial. Benchmarking against similar VA pharmaceutical contracts or national averages would provide better context on its value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method generally leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential pharmaceutical supplies.

Public Impact

Ensures access to necessary medications for veterans. Supports a major pharmaceutical distributor, impacting the supply chain. Potential for cost savings through competitive bidding in healthcare procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Single month spending is high, requires trend analysis.
Vendor concentration risk if McKesson is a primary supplier.
Potential for price increases in future contract periods.

Positive Signals

Full and open competition utilized.
Firm fixed price contract type.
Awarded by Department of Veterans Affairs, serving a critical population.

Sector Analysis

Pharmaceutical spending is a critical component of the healthcare sector. This contract represents a significant portion of the VA's drug procurement, reflecting national trends in healthcare costs and supply chain management.

Small Business Impact

This contract does not appear to directly benefit small businesses, as McKesson Corporation is a large, established company. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement oversight processes should be in place to ensure compliance and performance.

Related Government Programs

Software Publishers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High single-month expenditure.
Potential vendor dependency.
Lack of detailed cost breakdown.
Limited insight into specific pharmaceuticals procured.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $14.6 million to MCKESSON CORPORATION. PRIMARY PHARMACEUTICAL VENDOR - MARCH 2009

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 $14.6 million.

What is the period of performance?

Start: 2009-03-01. End: 2009-03-31.

What is the typical monthly pharmaceutical spending for the VA, and how does this $14.6 million compare?

Without historical data or broader market benchmarks, it's difficult to definitively assess if $14.6 million for one month is high or low. However, given the scale of the VA's operations and the cost of pharmaceuticals, this figure is substantial and warrants comparison with average monthly expenditures and similar contracts to understand its relative value and identify potential outliers or trends.

What are the risks associated with relying on a single primary vendor like McKesson for pharmaceuticals?

Relying on a single primary vendor can create significant supply chain risks. Disruptions due to the vendor's operational issues, natural disasters, or geopolitical events could severely impact the VA's ability to procure necessary medications. Furthermore, a lack of competition could lead to price escalations in future contract negotiations, potentially increasing costs for taxpayers.

How effective is the firm fixed price contract in controlling pharmaceutical costs for the VA?

A firm fixed price contract is generally effective in controlling costs as it locks in the price, shifting the risk of cost overruns to the contractor. For pharmaceuticals, this can be beneficial if the initial price is competitive. However, its long-term effectiveness depends on the initial pricing accuracy and the ability to renegotiate or re-compete the contract if market prices change significantly.

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: 1 POST ST, SAN FRANCISCO, CA, 90

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

Financial Breakdown

Contract Ceiling: $14,630,385

Exercised Options: $14,630,385

Current Obligation: $14,630,385

Timeline