VA's Pharmacy Prime Vendor Contract Awarded to McKesson Corporation for $24.5M in FY2015

Contract Overview

Contract Amount: $24,521,281 ($24.5M)

Contractor: Mckesson Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-09-01

End Date: 2015-09-30

Contract Duration: 29 days

Daily Burn Rate: $845.6K/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) FY2015 SEP

Place of Performance

Location: DULUTH, GWINNETT County, GEORGIA, 30096

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $24.5 million to MCKESSON CORPORATION for work described as: EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2015 SEP Key points: 1. The contract, valued at $24.5 million, was awarded to McKesson Corporation. 2. This represents a significant award within the pharmaceutical preparation manufacturing sector. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The short duration of 29 days for this specific award warrants further investigation into its purpose.

Value Assessment

Rating: good

The contract's value of $24.5 million for a 29-day period appears substantial. Benchmarking against similar prime vendor contracts for pharmaceutical supplies would be necessary to definitively assess pricing, but the firm fixed price structure suggests cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

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

Taxpayer Impact: The competitive nature of the award suggests that taxpayers are likely benefiting from a fair price for pharmaceutical supplies procured through this contract.

Public Impact

Ensures timely access to essential pharmaceuticals for veterans. Supports the Department of Veterans Affairs' mission to provide comprehensive healthcare. Contributes to the stability of the pharmaceutical supply chain for government facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (29 days) may indicate a specific, limited-scope requirement or a bridge contract.
Lack of specific Product Service Code (PSC) makes it difficult to benchmark against similar specialized procurements.

Positive Signals

Awarded under full and open competition, promoting market fairness.
Firm Fixed Price contract provides cost predictability.

Sector Analysis

This contract falls under the Pharmaceutical Preparation Manufacturing sector, which is critical for healthcare services. The spending benchmark for such contracts can vary widely based on the scope and duration of services provided.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this specific award. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms would apply to ensure compliance and performance.

Related Government Programs

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

Risk Flags

Short contract duration requires clarification.
Potential for high per-diem cost.
Lack of detailed service scope.
Limited visibility into subcontractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $24.5 million to MCKESSON CORPORATION. EXPRESS REPORT PHARMACY PRIME VENDOR (PPV) FY2015 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 $24.5 million.

What is the period of performance?

Start: 2015-09-01. End: 2015-09-30.

What was the specific purpose of this short-duration (29-day) contract award, and was it a bridge to a longer-term solution?

The short 29-day duration suggests this award might have been a bridge contract to ensure continuity of pharmaceutical supply while a longer-term contract was being finalized, or it could represent a specific, limited-time requirement. Understanding the context is crucial for assessing its overall value and strategic fit within the VA's procurement plan.

How does the awarded amount of $24.5 million for a 29-day period compare to typical prime vendor contract costs for similar pharmaceutical volumes?

Without specific volume data or comparable contract benchmarks, it's challenging to definitively assess the cost-effectiveness. However, $24.5 million for just 29 days is a substantial figure, implying either extremely high volumes or a premium for expedited or specialized services. A detailed cost-benefit analysis against industry standards is recommended.

What mechanisms were in place to ensure the 'full and open competition' truly fostered the best possible price discovery for this significant pharmaceutical procurement?

Full and open competition typically involves broad solicitations and evaluation criteria designed to encourage multiple bids. The effectiveness of price discovery depends on the clarity of the solicitation, the number and quality of bids received, and the VA's negotiation strategy. Post-award analysis of the bidding landscape would reveal the extent of competition achieved.

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: $24,521,281

Exercised Options: $24,521,281

Current Obligation: $24,521,281

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797P12D0001

IDV Type: IDC

Timeline