3 Companies Win $3.73 Billion DLA Medical Surgical Prime Vendor Contracts

Cardinal Health, McKesson Medical-Surgical Government Solutions and Concordance Healthcare Solutions have received six fixed-price contracts from Defense Logistics Agency Troop Support for its Medical Surgical Prime Vendor program. The contracts have a combined potential value of up to $3.73 billion and an ordering period ending Dec. 6, 2029. Through the program, prime vendors distribute medical and surgical products to customers across the military services, the Defense Health Agency, the Department of Veterans Affairs and the Department of Health and Human Services.

Medical Surgical Prime Vendor Details

The contractors will serve as commercial distribution channels for medical and surgical supplies ordered by eligible federal customers. Under DLA’s prime vendor program, distributors source products from suppliers and deliver them to customers, rather than manufacturing every item they provide. The arrangement supports routine health-care purchasing alongside DLA’s other medical-supply acquisition channels.

The new awards cover a program with a broad product range. In its fiscal 2024 history, DLA described the earlier generation of Medical Surgical Prime Vendor contracts as offering more than 350,000 items and primary and backup delivery. Those figures describe the earlier program, not quantities committed under the six new contracts.

Award and Contractor Background

DLA received eight responses in the competitive acquisition. Cardinal Health received three contracts with a combined potential value of $2.70 billion; McKesson received one valued at up to $741.5 million; and Concordance received two totaling up to $290.7 million. The contract ceilings represent potential ordering capacity, not purchases already made.

DLA launched the program’s earlier Generation V contracts in June 2017. In its fiscal 2024 history, the agency reported that average distribution fees under that generation had fallen from 4.3% to 1.2% and attributed $126 million in customer savings to the program since its launch. Those historical results provide context for DLA’s use of prime vendors but are not performance projections for the new awards.

This award was disclosed by the DoW in its daily press release. Additional contract details will be available on HigherGov in approximately 90 days under SPE2DV27D0001, SPE2DV27D0005, SPE2DV27D0003, SPE2DV27D0002, SPE2DV27D0006, SPE2DV27D0004 after the contract is formally disclosed by the government.