VA's Pharmacy Prime Vendor Contract: $23.5M Spent in Sep 2014 with McKesson

Contract Overview

Contract Amount: $23,498,960 ($23.5M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-09-01

End Date: 2014-09-30

Contract Duration: 29 days

Daily Burn Rate: $810.3K/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) FY2014 SEP

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27701

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $23.5 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2014 SEP Key points: 1. The Department of Veterans Affairs (VA) spent $23.5 million in September 2014 on pharmaceuticals through its Pharmacy Prime Vendor (PPV) program. 2. McKesson Corporation was the sole awardee for this specific delivery order, indicating a potential lack of broader competition for this period. 3. The contract type was Firm Fixed Price, which helps manage cost certainty for the VA. 4. The pharmaceutical preparation manufacturing sector is critical for healthcare delivery, and this spending reflects a significant portion of the VA's pharmaceutical needs.

Value Assessment

Rating: good

The $23.5 million spent in September 2014 represents a substantial but potentially reasonable expenditure for a prime vendor pharmaceutical contract. Benchmarking against similar large-scale pharmaceutical procurements would be necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While the data indicates 'FULL AND OPEN COMPETITION' for the overall PPV program, this specific delivery order was awarded to McKesson Corporation. The impact on price discovery for this particular order depends on the structure of the broader PPV contract and whether multiple vendors competed for this specific delivery.

Taxpayer Impact: The VA's ability to secure competitive pricing through its prime vendor program directly impacts taxpayer dollars allocated to healthcare for veterans.

Public Impact

Ensures timely access to essential medications for veterans. Supports the operational needs of VA pharmacies nationwide. Contributes to the overall health and well-being of the veteran population. Reflects the government's commitment to providing comprehensive healthcare services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific competition details for this delivery order.
Potential for price fluctuations in pharmaceutical markets.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Prime Vendor program aims for efficiency in pharmaceutical supply chain.

Sector Analysis

The pharmaceutical preparation manufacturing sector is a vital component of the healthcare industry. Spending benchmarks for such contracts can vary widely based on the scope of services, drug formulary, and volume. This $23.5 million expenditure for one month suggests a significant operational scale for the VA's pharmaceutical needs.

Small Business Impact

The provided data does not offer specific insights into the participation of small businesses in this particular delivery order or the broader Pharmacy Prime Vendor program. Further analysis would be required to determine the extent of small business involvement.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Accountability is maintained through contract performance monitoring, financial audits, and adherence to federal procurement regulations. The 'NC' status code may require further investigation for clarity.

Related Government Programs

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

Risk Flags

Limited visibility into competition for specific delivery orders.
Potential for price increases in pharmaceutical markets.
Reliance on a single vendor for a specific period.
Need for detailed per-unit cost analysis for true value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $23.5 million to MCKESSON CORPORATION. EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2014 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 $23.5 million.

What is the period of performance?

Start: 2014-09-01. End: 2014-09-30.

What was the specific competitive landscape for this $23.5 million delivery order within the broader PPV contract?

While the overall PPV contract may have undergone full and open competition, the data for this specific September 2014 delivery order indicates an award to McKesson Corporation. Without further details on the bidding process for this particular order, it's unclear if other vendors submitted proposals or if this was a pre-determined allocation within the larger contract framework. This lack of transparency for individual orders can obscure the true level of competition.

How does the per-unit cost of pharmaceuticals under this contract compare to market benchmarks?

The provided data does not include per-unit cost information, making a direct comparison to market benchmarks impossible. The total expenditure of $23.5 million for the month is a high-level figure. A thorough analysis would require itemized pricing data for specific pharmaceuticals procured through this contract to assess cost-effectiveness against industry standards.

What is the long-term effectiveness of the Pharmacy Prime Vendor program in ensuring cost savings and reliable pharmaceutical supply for the VA?

The Pharmacy Prime Vendor program is designed to streamline pharmaceutical procurement, potentially leading to cost savings through volume purchasing and efficient distribution. Its long-term effectiveness hinges on sustained competitive pricing, robust contract management, and adaptability to evolving pharmaceutical markets. Regular performance reviews and cost-benefit analyses are crucial to ensure it continues to meet the VA's needs effectively.

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: $23,498,960

Exercised Options: $23,498,960

Current Obligation: $23,498,960

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline