VA awards $2.16M contract to UPS for package delivery services in Tennessee

Contract Overview

Contract Amount: $2,159,505 ($2.2M)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DELIVERY AND PICK UP OF PACKAGES.

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37212

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.2 million to UNITED PARCEL SERVICE CO. for work described as: DELIVERY AND PICK UP OF PACKAGES. Key points: 1. Contract leverages established courier infrastructure for efficient delivery. 2. Sole provider for this specific delivery order, limiting immediate competition. 3. Performance is tied to delivery timelines and package integrity. 4. This contract supports ongoing VA operations and patient care logistics. 5. The service falls within the broad courier and express delivery sector. 6. Fixed-price contract provides cost certainty for the VA.

Value Assessment

Rating: good

The contract value of $2.16 million for one year of delivery services appears reasonable given the scale of operations for a federal agency like the VA. Benchmarking against similar contracts for national courier services would provide a more precise value-for-money assessment. However, UPS is a major player with significant infrastructure, suggesting competitive pricing for the scope of work. The firm fixed-price structure helps manage cost risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, specific sources may have been excluded for defined reasons. The data specifies only one award, suggesting that either only one bid was received or that the competition, while initiated, resulted in a single viable offer. This limited competition could potentially impact price discovery and may warrant further investigation into the exclusion criteria.

Taxpayer Impact: Limited competition can sometimes lead to higher prices for taxpayers if robust bidding processes are not maintained. Ensuring fair market value is crucial when fewer than expected bidders participate.

Public Impact

Benefits the Department of Veterans Affairs by ensuring timely delivery of essential packages, potentially including medical supplies and administrative documents. Services delivered include express and standard package delivery within Tennessee. Geographic impact is focused on the state of Tennessee. Workforce implications are minimal for the VA, as the service is outsourced to UPS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to limited competition.
Reliance on a single vendor for a critical service.

Positive Signals

Leverages established and reliable delivery infrastructure of a major provider.
Firm fixed-price contract offers budget predictability.

Sector Analysis

This contract operates within the broader logistics and transportation sector, specifically focusing on courier and express delivery services. This industry is characterized by high volume, time-sensitive deliveries, and significant infrastructure investment. The market includes major national and international players like UPS, FedEx, and the USPS, as well as regional providers. Federal spending in this area supports agency operations, mailroom functions, and the movement of goods critical to government missions.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of specific subcontracting requirements for small businesses within the provided data. This suggests that the primary focus was on securing reliable and efficient delivery services from a large, established provider, rather than specifically promoting small business participation in this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are embedded in the contract terms, likely including performance standards for delivery times, package condition, and reporting. Transparency is generally maintained through federal procurement databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

USPS Mail Services
FedEx Delivery Services
DHL Express Delivery

Risk Flags

Limited Competition
Potential Service Disruption Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.2 million to UNITED PARCEL SERVICE CO.. DELIVERY AND PICK UP OF PACKAGES.

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

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 $2.2 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-09-30.

What is the historical spending pattern of the VA for courier and express delivery services in Tennessee?

Analyzing historical spending for courier and express delivery services by the VA in Tennessee requires access to detailed procurement data over multiple fiscal years. Without specific historical data for this region and service category, it's difficult to provide a precise pattern. However, federal agencies generally maintain ongoing contracts for such services to ensure operational continuity. Spending can fluctuate based on agency needs, changes in service providers, and overall budget allocations. A trend towards outsourcing these services to major carriers like UPS and FedEx is common across government, driven by efficiency and cost-effectiveness compared to maintaining in-house delivery fleets for all needs.

How does the pricing of this UPS contract compare to similar federal contracts for delivery services?

Direct comparison of pricing for this specific UPS contract to similar federal contracts is challenging without access to detailed pricing structures and service level agreements of other contracts. However, the $2.16 million for a one-year firm fixed-price contract for delivery services in Tennessee suggests a significant volume of packages. UPS, as a major national carrier, typically offers competitive rates for large-volume government contracts. Benchmarking would involve comparing the per-package cost, cost per mile, or cost per pound against other federal contracts awarded to carriers like FedEx or even USPS for comparable geographic areas and service types. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type might indicate specific factors influencing the price.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not detail the specific performance metrics or service level agreements (SLAs) for this contract. Typically, contracts for courier and express delivery services include SLAs related to delivery times (e.g., next-day, two-day), package tracking accuracy, proof of delivery, damage rates, and response times for issues. The Department of Veterans Affairs would have established these metrics to ensure the reliability and efficiency of the delivery service. Failure to meet these SLAs could result in penalties or other contractual remedies for United Parcel Service Co.

What is the track record of United Parcel Service Co. (UPS) in fulfilling federal government contracts?

United Parcel Service Co. (UPS) has a substantial track record of fulfilling federal government contracts across various agencies and service needs, including logistics, package delivery, and transportation. As a major commercial entity, UPS regularly competes for and wins government contracts. Their performance is generally considered reliable due to their extensive infrastructure and established operational procedures. Federal agencies often select UPS for its broad reach, technological capabilities in tracking, and capacity to handle large volumes. Past performance evaluations and contract compliance data would be maintained by the agencies that have contracted with UPS.

What is the potential risk associated with relying on a single vendor for delivery services in Tennessee?

The primary risk associated with relying on a single vendor, such as UPS in this case, for delivery services is service disruption. Unforeseen events like labor strikes, severe weather, natural disasters, or internal operational failures at UPS could significantly impact the VA's ability to receive critical supplies or send important documents. While the contract is for a defined period, a lack of alternative providers readily available could exacerbate the impact of any disruption. The 'limited' competition aspect also raises a flag regarding potential price increases in future contract renewals if market alternatives are not actively cultivated.

Industry Classification

NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1400 N HURSTBOURNE PKWY, LOUISVILLE, KY, 40223

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,159,505

Exercised Options: $2,159,505

Current Obligation: $2,159,505

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline