VA awards $29.1M for mail manifesting services to FedEx Supply Chain, highlighting a competitive bidding process

Contract Overview

Contract Amount: $29,175,701 ($29.2M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $80.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICES

Place of Performance

Location: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37127

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $29.2 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. The contract value of $29.1 million for mail manifesting services represents a significant investment in logistical support. 2. FedEx Supply Chain Distribution System, Inc. secured this contract, indicating established players in the logistics sector. 3. The 'Full and Open Competition' suggests a robust bidding environment, potentially leading to better pricing. 4. The contract duration of 364 days allows for consistent service delivery over a defined period. 5. The firm-fixed-price structure provides cost certainty for the Department of Veterans Affairs. 6. The North American Industry Classification System (NAICS) code 561499 categorizes this as 'All Other Business Support Services'.

Value Assessment

Rating: good

The contract value of $29.1 million for mail manifesting services appears reasonable given the scope of supporting a large agency like the VA. Without specific benchmarks for mail manifesting services across federal agencies, a direct per-unit cost comparison is difficult. However, the competitive nature of the award suggests that the pricing was vetted against multiple offers, implying a fair market value was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but this type of competition generally fosters a healthy price discovery process. It suggests that the VA sought the best value by allowing a wide range of qualified vendors to participate.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially driving down costs and ensuring the government receives the most economical solution.

Public Impact

Veterans will benefit from efficient and reliable mail services, ensuring timely delivery of essential documents and supplies. The Department of Veterans Affairs will receive critical support for its mail operations, streamlining administrative processes. The contract's impact is primarily national, supporting VA facilities across the country. The contract supports jobs within the logistics and administrative support sectors through FedEx Supply Chain Distribution System, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in the provided data makes it difficult to assess the quality of service.
The contract duration is relatively short (364 days), which might lead to frequent re-competition and potential transition costs.
No information is available on potential subcontracting, which could impact small business participation.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract provides budget certainty for the agency.
Contract awarded to a known entity (FedEx Supply Chain), implying a level of established capability.

Sector Analysis

Mail manifesting services fall under the broader business support services sector, which includes a wide array of administrative and operational assistance. This sector is characterized by a mix of large established providers and smaller niche players. The market size for such services is substantial, driven by the operational needs of government agencies and large corporations requiring efficient mailroom and logistics management. This contract represents a portion of the government's overall spending on outsourced business support functions.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there is no direct analysis of small business set-aside implications. However, as a large contract awarded to a major provider, there may be opportunities for small businesses to participate as subcontractors to FedEx Supply Chain Distribution System, Inc., though this is not specified in the data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of Veterans Affairs. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is generally maintained through federal procurement databases like FPDS, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

General Services Administration (GSA) Schedule contracts for logistics and business services
US Postal Service (USPS) contracts for mail delivery and related services
Department of Defense (DoD) logistics and supply chain management contracts

Risk Flags

Potential for service disruption impacting VA operations.
Data security and privacy concerns related to mail content and recipient information.
Dependence on a single large contractor for a critical support function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $29.2 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC.. MAIL MANIFESTING SERVICES

Who is the contractor on this award?

The obligated recipient is FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC..

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 $29.2 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is the historical spending pattern for mail manifesting services by the Department of Veterans Affairs?

Analyzing historical spending for mail manifesting services by the VA is crucial for understanding trends and identifying potential cost efficiencies. Without access to specific historical data for this exact service category, we can infer general trends in federal spending on business support services. Agencies like the VA often rely on outsourced services for administrative functions to improve efficiency and focus on core missions. Spending in this area can fluctuate based on agency needs, budget allocations, and the availability of competitive service providers. A review of past contracts, including their values, durations, and awarded vendors, would reveal whether this $29.1 million award represents an increase, decrease, or stable level of investment in mail manifesting services compared to previous periods. It would also highlight any shifts in contractor selection over time.

How does the awarded price compare to market rates for similar mail manifesting services?

Benchmarking the awarded price of $29.1 million against market rates for similar mail manifesting services is essential for assessing value for money. Mail manifesting involves the processing and tracking of mail, often integrating with postal services and logistics providers. The cost of these services can vary significantly based on volume, complexity, technology used, and geographic coverage. To perform a thorough comparison, one would need to gather data on contracts awarded by other federal agencies or large commercial entities for comparable services. Factors such as the number of mail pieces processed, the level of tracking required, and any value-added services (e.g., sorting, postage application) would need to be standardized. Given that this contract was awarded through full and open competition, it suggests that the price was likely competitive, but a detailed market analysis would be required for a definitive assessment of whether it represents excellent, good, or fair value.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

Key Performance Indicators (KPIs) are critical for ensuring the contractor, FedEx Supply Chain Distribution System, Inc., meets the Department of Veterans Affairs' requirements for mail manifesting services. While not detailed in the provided data, typical KPIs for such a contract would likely include metrics related to mail processing accuracy, turnaround time for manifesting, on-time dispatch, data integrity for tracking, and adherence to service level agreements (SLAs). For instance, a KPI might be '99.5% accuracy in mail piece data entry' or '98% of mail manifested within 24 hours of receipt.' The VA's contracting officer and program managers would monitor these KPIs throughout the contract period. Performance against these metrics directly influences contractor payment, potential incentives, and decisions regarding future contract awards. Regular performance reviews and reporting are standard practice to ensure accountability and service quality.

What is the track record of FedEx Supply Chain Distribution System, Inc. in performing similar federal contracts?

FedEx Supply Chain Distribution System, Inc.'s track record in performing similar federal contracts is a significant factor in assessing the reliability and potential success of this $29.1 million award. As a known entity in the logistics and supply chain sector, FedEx generally has a well-established history of service delivery. To evaluate their specific performance in federal contracting, one would typically review past contract awards, their values, durations, and performance ratings (if publicly available). This includes examining any past issues, disputes, or contract terminations, as well as instances of exceptional performance. Federal procurement databases often contain performance information, which can indicate the contractor's ability to meet requirements, manage costs, and adhere to schedules. A positive track record suggests a lower risk for the VA, while a history of performance issues would raise concerns about the successful execution of this new contract.

What are the potential risks associated with this contract, and how are they being mitigated?

Potential risks associated with this $29.1 million mail manifesting services contract include service disruptions, data security breaches, cost overruns (though mitigated by firm-fixed-price), and contractor performance issues. Service disruptions could arise from logistical challenges or unforeseen events impacting FedEx's operations. Data security is paramount, as mail manifesting involves handling sensitive information. Mitigation strategies typically involve robust contract terms and conditions, including performance standards, security requirements, and remedies for non-performance. The firm-fixed-price structure inherently limits cost overrun risk for the VA. The competitive award process itself acts as a risk mitigation tool by selecting a capable vendor. Furthermore, the VA's oversight mechanisms, including regular performance reviews and the potential for contract termination for default, help manage ongoing risks throughout the contract's duration.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp

Address: 100 PAPERCRAFT PARK, PITTSBURGH, PA, 15238

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

Financial Breakdown

Contract Ceiling: $29,175,701

Exercised Options: $29,175,701

Current Obligation: $29,175,701

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline