Omnicell, Inc. (NASDAQ: OMCL) has entered into a new general contract to supply the United States Department of Veterans Affairs. The new five-year contract covers the period of March 1, 2013 through February 28, 2018. The contract contains terms that are substantially the same as the previous general contract to supply and includes an option for extending the terms for an additional five years. As a function of the government’s disclosure process, a potential contract value is assigned and published with the award. A potential ten-year value of $291 million has been assigned to the contract, which Omnicell believes was derived by assessing historical purchase volumes and associated service requirements by all United States federal institutions over a historical ten-year period, including the Department of Veterans Affairs, the Department of Defense, and the Bureau of Indian Affairs. The contract does not constitute an obligation of any of these agencies to purchase from Omnicell and is not exclusive. Each hospital that may purchase under the contract would do so based on the decisions of that hospital. For purposes of customer concentration, each hospital is considered an individual customer.
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