VA's Pharmacy Prime Vendor Contract Awarded to McKesson for $27.5M in FY2016

Contract Overview

Contract Amount: $27,543,083 ($27.5M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-09-01

End Date: 2016-09-30

Contract Duration: 29 days

Daily Burn Rate: $949.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27701

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $27.5 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP Key points: 1. The Department of Veterans Affairs awarded a significant contract for pharmaceutical preparations. 2. McKesson Corporation secured the award, indicating a competitive landscape in pharmaceutical supply. 3. The contract's value of $27.5 million warrants scrutiny for cost-effectiveness and taxpayer impact. 4. This spending falls within the broader pharmaceutical manufacturing sector, crucial for healthcare delivery.

Value Assessment

Rating: good

The contract value of $27.5 million for a one-month period appears reasonable given the scope of pharmaceutical supply. Benchmarking against similar large-scale prime vendor contracts would provide a more definitive assessment of its pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing for the government.

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

Public Impact

Ensures timely access to essential medications for veterans. Supports the operational readiness of VA healthcare facilities. Impacts the pharmaceutical supply chain and drug availability nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in subsequent contract periods.
Dependence on a single vendor for a critical supply chain.

Positive Signals

Awarded through full and open competition.
Secures essential pharmaceutical supplies for veterans.

Sector Analysis

This contract falls under the Pharmaceutical Preparation Manufacturing sector, a critical component of the healthcare industry. Spending in this area is consistently high due to the ongoing need for medications.

Small Business Impact

Analysis of small business participation was not explicitly detailed in the provided data. Further investigation would be needed to determine the extent of small business involvement in this contract's fulfillment.

Oversight & Accountability

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

Related Government Programs

Pharmaceutical Preparation Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for price increases in future contract periods.
Reliance on a single vendor for a critical supply chain.
Need for ongoing performance monitoring to ensure quality and timeliness.
Vulnerability to supply chain disruptions affecting pharmaceutical availability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $27.5 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2016 SEP

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 $27.5 million.

What is the period of performance?

Start: 2016-09-01. End: 2016-09-30.

What is the projected annual cost for the Pharmacy Prime Vendor program based on this monthly award?

Based on the provided monthly award of $27,543,082.60, the projected annual cost for the Pharmacy Prime Vendor program would be approximately $330.5 million ($27.5M * 12 months). This figure assumes consistent monthly spending throughout the year and does not account for potential fluctuations or contract modifications.

What are the key performance indicators (KPIs) used to evaluate McKesson Corporation's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, VA contracts for pharmaceutical prime vendors would include metrics related to delivery timeliness, order accuracy, drug availability, inventory management, and compliance with regulations.

How does the unit cost of pharmaceuticals under this contract compare to other federal agencies or the commercial market?

A direct comparison of unit costs is not possible with the provided data. To assess value, a detailed analysis of the specific pharmaceuticals procured, their quantities, and negotiated prices would be required, benchmarked against similar contracts or market data.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › Pharmaceutical Preparation Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE POST ST, SAN FRANCISCO, CA, 94104

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

Financial Breakdown

Contract Ceiling: $27,543,083

Exercised Options: $27,543,083

Current Obligation: $27,543,083

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline