VA awards $31.6M contract for mail manifesting services to FedEx Supply Chain Distribution System, Inc

Contract Overview

Contract Amount: $31,632,181 ($31.6M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $86.7K/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, 37130

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31.6 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract awarded through a competitive process, suggesting potential for fair pricing. 2. The firm-fixed-price structure shifts performance risk to the contractor. 3. Services are essential for the VA's logistical operations, impacting patient care indirectly. 4. The contract duration of one year with potential for extensions indicates ongoing need. 5. The North American Industry Classification System (NAICS) code 561499 covers a broad range of business support services.

Value Assessment

Rating: good

The contract value of $31.6 million for mail manifesting services appears reasonable given the scale of operations for the Department of Veterans Affairs. Benchmarking against similar contracts for large federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price (FFP) contract type is generally favorable for the government as it caps costs and incentivizes contractor efficiency. Without specific per-unit data or detailed service level agreements, a definitive value assessment is challenging, but the competitive award process is a positive indicator.

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 offers. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive environment. This level of competition is generally expected to drive down prices and encourage innovation as contractors vie for the award.

Taxpayer Impact: Taxpayers benefit from the competitive process through potentially lower prices and better service quality compared to a sole-source or limited competition award.

Public Impact

Veterans will benefit from efficient and accurate processing of their mail, including prescriptions and important correspondence. The contract ensures the continuity of essential mail manifesting and distribution services for the VA's nationwide operations. Services are likely to have a broad geographic impact, supporting VA facilities across Tennessee and potentially beyond. The contract supports jobs within the logistics and business support services sector, primarily at FedEx Supply Chain Distribution System, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if market rates for manifesting services rise significantly during the contract period.
Dependence on a single contractor for a critical logistical function could pose a risk if service disruptions occur.
Ensuring consistent service quality across all VA facilities utilizing these manifesting services requires diligent oversight.

Positive Signals

Award to a well-established logistics provider like FedEx Supply Chain Distribution System, Inc. suggests a high likelihood of reliable service delivery.
The firm-fixed-price contract structure provides cost certainty for the VA.
Full and open competition indicates that the VA sought the best value from the market.

Sector Analysis

The mail manifesting services sector is a critical component of the broader business support services industry, facilitating the efficient processing and shipment of goods and documents. This contract falls under the 'All Other Business Support Services' NAICS code (561499), which encompasses a wide array of services. Federal spending in this area is driven by the logistical needs of various agencies, including the Department of Defense and the Department of Veterans Affairs, to manage their vast mail and package volumes effectively. Comparable spending benchmarks would typically be found within contracts for logistics management, mailroom operations, and shipping services for large organizations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, FedEx Supply Chain Distribution System, Inc., is a large entity, and the contract's value suggests it is not intended for small business participation as a prime awardee. Analysis of subcontracting plans, if any, would be necessary to determine indirect small business impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program officials within the Department of Veterans Affairs. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to meet specified service levels. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight reports may not be publicly accessible. The VA's Office of Inspector General may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule (FSS) contracts for shipping and logistics services
Department of Defense mail and distribution contracts
Other agency contracts for business support and administrative services

Risk Flags

Contract performance risk
Service disruption risk
Price escalation risk (if contract terms allow)

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31.6 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 $31.6 million.

What is the period of performance?

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

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 requires access to detailed contract databases over multiple fiscal years. Without specific historical data for this exact service category, we can infer that the VA, as a large agency with significant patient outreach and administrative functions, likely has consistent and substantial spending on mail and logistics services. This spending would fluctuate based on program needs, contract renewals, and market pricing. Previous contracts for similar services, potentially with different vendors or under different contract vehicles, would provide context for the current $31.6 million award. A trend analysis would reveal if this award represents an increase, decrease, or stable level of investment in these services.

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

A precise comparison of the awarded price to market rates for mail manifesting services is challenging without access to proprietary pricing data or detailed service level agreements. However, the contract's value of $31.6 million for a one-year period, awarded under full and open competition, suggests the VA sought competitive pricing. The firm-fixed-price (FFP) structure implies that the contractor, FedEx Supply Chain Distribution System, Inc., has committed to delivering the services within this budget. Benchmarking would ideally involve comparing the per-unit costs (e.g., cost per manifest, cost per package processed) against industry standards or rates charged to other large commercial or government entities. The competitive nature of the award is a positive indicator that the price is likely aligned with market expectations.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) for this mail manifesting services contract are not detailed in the provided data. However, typical KPIs for such services would likely include metrics related to accuracy (e.g., manifest accuracy rate), timeliness (e.g., package processing time, on-time dispatch), and potentially cost efficiency. SLAs would define the acceptable thresholds for these KPIs and outline remedies or penalties for non-performance. For the VA, critical aspects would include ensuring that patient-related mail, such as prescriptions, is handled with utmost accuracy and speed. The contracting officer's representative (COR) would be responsible for monitoring contractor performance against these defined metrics throughout the contract period.

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

FedEx Supply Chain Distribution System, Inc. is a subsidiary of FedEx Corporation, a globally recognized logistics and transportation company with extensive experience in managing supply chains and distribution networks. While specific performance data on this exact contract is not yet available as it is newly awarded, FedEx entities have a long history of performing contracts with various U.S. government agencies, including the Department of Defense and the Postal Service, for a wide range of logistics, shipping, and supply chain management services. Their established infrastructure, technological capabilities, and experience suggest a strong capacity to fulfill the requirements of this VA contract. Past performance evaluations from previous government contracts would offer a more detailed insight into their reliability and quality of service.

What are the potential risks associated with relying on a single contractor for these essential mail manifesting services?

Relying on a single contractor, even a reputable one like FedEx Supply Chain Distribution System, Inc., for essential mail manifesting services introduces several potential risks. Firstly, there is a risk of service disruption due to unforeseen events such as natural disasters, labor disputes, or system failures affecting the contractor's operations. Secondly, a lack of ongoing competition during the contract term could potentially lead to complacency or less incentive for the contractor to innovate or offer superior service compared to a more competitive environment. Thirdly, if the contractor's performance degrades or they face financial instability, the VA could face significant challenges in transitioning to a new provider, potentially impacting critical operations and the delivery of services to veterans. Robust oversight and contingency planning are crucial to mitigate these risks.

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: $31,632,181

Exercised Options: $31,632,181

Current Obligation: $31,632,181

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline