VA's Pharmacy Prime Vendor contract awarded to McKesson Corporation for $30.5M in FY2017

Contract Overview

Contract Amount: $30,552,564 ($30.6M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-06-01

End Date: 2017-08-31

Contract Duration: 91 days

Daily Burn Rate: $335.7K/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) FY2017 JUN-AUG

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $30.6 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2017 JUN-AUG Key points: 1. The contract, valued at $30.5M, covers pharmaceutical preparations. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. The contract duration was 91 days, suggesting a short-term or interim need. 4. The vendor is McKesson Corporation, a major player in pharmaceutical distribution.

Value Assessment

Rating: good

The contract value of $30.5M for a 91-day period appears reasonable given the nature of pharmaceutical prime vendor services. Benchmarking against similar large-scale pharmaceutical contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This method typically promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The competitive nature of the award is expected to have resulted in a cost-effective solution for taxpayers, ensuring efficient use of funds for essential pharmaceutical supplies.

Public Impact

Ensures timely access to essential medications for veterans. Supports the Department of Veterans Affairs' healthcare mission. Potential for cost savings through competitive bidding on pharmaceutical supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (91 days) may indicate a temporary solution or a gap-filling measure.
Lack of specific performance metrics in the provided data.
Potential for price fluctuations in pharmaceutical markets.

Positive Signals

Awarded through full and open competition.
Significant value indicates a critical service for the VA.
Firm fixed price contract provides cost certainty.

Sector Analysis

The pharmaceutical sector is highly regulated and competitive, with major distributors like McKesson playing a crucial role in the supply chain. Spending in this area is essential for public health services.

Small Business Impact

While this contract was awarded to a large corporation, the pharmaceutical supply chain often involves numerous small businesses as manufacturers or specialized service providers. Further analysis would be needed to determine the extent of small business participation in this specific award.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract to ensure timely delivery of pharmaceuticals and adherence to contract terms. Robust oversight is crucial for maintaining the integrity of the veteran healthcare system.

Related Government Programs

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

Risk Flags

Short contract duration
Potential for supply chain disruptions
Reliance on a single large vendor
Lack of detailed performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $30.6 million to MCKESSON CORPORATION. EXPRESS REPORT: PHARMACY PRIME VENDOR (PPV) FY2017 JUN-AUG

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 $30.6 million.

What is the period of performance?

Start: 2017-06-01. End: 2017-08-31.

What was the specific rationale for the short 91-day contract duration?

The short duration of 91 days for the Pharmacy Prime Vendor contract may suggest it was an interim measure to bridge a gap between longer-term contracts, or it could have been a specific procurement strategy for a particular need. Understanding the context of the procurement timeline and any preceding or subsequent contracts would clarify the reason for this limited period.

How does McKesson's pricing compare to industry benchmarks for similar pharmaceutical distribution services?

Without specific pricing details or access to industry benchmark data for pharmaceutical distribution services, a direct comparison is difficult. However, the contract's award under full and open competition implies that McKesson's pricing was deemed competitive at the time of award. Further analysis would require access to detailed cost breakdowns and market pricing data.

What is the potential impact on veteran healthcare access if McKesson fails to meet delivery obligations?

Failure by McKesson to meet delivery obligations could significantly disrupt veteran healthcare by causing shortages of essential medications. This could lead to treatment delays, increased patient suffering, and potentially force the VA to seek emergency alternative suppliers, which may be more costly and less efficient.

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: $30,552,564

Exercised Options: $30,552,564

Current Obligation: $30,552,564

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline