VA awards $15.5M delivery order to Federal Express for nationwide shipping services

Contract Overview

Contract Amount: $15,526,139 ($15.5M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $42.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NGDS SHIPPING

Place of Performance

Location: SHAWNEE, JOHNSON County, KANSAS, 66227

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $15.5 million to FEDERAL EXPRESS CORPORATION for work described as: NGDS SHIPPING Key points: 1. Contract provides essential logistics for VA operations, ensuring timely delivery of medical supplies and equipment. 2. Competition was open, suggesting potential for competitive pricing and value. 3. The fixed-price structure offers cost certainty for the government. 4. Performance period spans one year, allowing for regular evaluation. 5. This contract supports the critical function of medical supply chain management within the VA. 6. The awardee, Federal Express, is a well-established logistics provider with extensive infrastructure.

Value Assessment

Rating: good

The total award amount of $15.5 million for a one-year delivery order appears reasonable given the scope of nationwide shipping services required by the Department of Veterans Affairs. Benchmarking against similar large-scale logistics contracts for federal agencies would provide a more precise value assessment. However, the fixed-price nature of the contract helps mitigate cost overruns and provides a predictable expense for the VA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and allowed to bid. The presence of four bidders (no=4) suggests a healthy level of competition, which typically drives down prices and encourages innovation. This competitive environment is favorable for ensuring the government receives the best value for its spending.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely resulted in a more cost-effective solution for essential shipping services, preventing potential overpayment.

Public Impact

Veterans will benefit from the reliable and timely delivery of medical supplies, pharmaceuticals, and equipment to VA facilities nationwide. The contract ensures the continuity of critical healthcare support services for veterans. Geographic impact is nationwide, covering all states and territories where VA facilities operate. Workforce implications include support for Federal Express employees involved in pickup, sorting, and delivery operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if market rates rise significantly during the contract period, despite fixed-price structure.
Dependence on a single large carrier could pose risks if service disruptions occur.
Ensuring consistent service quality across all delivery points nationwide requires robust oversight.

Positive Signals

Award to a reputable and experienced carrier like Federal Express suggests a high likelihood of reliable service.
The fixed-price contract provides budget certainty for the VA.
Nationwide coverage ensures comprehensive support for all VA facilities.

Sector Analysis

The logistics and shipping sector is a critical component of the federal supply chain, supporting a wide array of government functions. This contract falls within the 'Couriers and Express Delivery Services' industry, a mature market characterized by significant competition among established players. Federal spending in this area is consistent, driven by the ongoing need for efficient movement of goods and materials across the government.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of the services and the scale of the award, it is unlikely that small businesses would be primary subcontractors, though they may be involved in specific regional delivery routes managed by Federal Express.

Oversight & Accountability

Oversight for this delivery order will likely be managed by the contracting officer and the designated contract specialist within the Department of Veterans Affairs. Performance monitoring will be crucial to ensure timely deliveries and adherence to service level agreements. Transparency is facilitated by the public nature of federal contract awards, and any issues would be subject to standard government accountability processes.

Related Government Programs

Department of Veterans Affairs Medical Supply Chain Management
Federal Express Government Contracts
Logistics and Transportation Services
GSA Schedule Contracts

Risk Flags

Potential for service disruption due to reliance on a single carrier.
Need for robust performance monitoring to ensure consistent service quality nationwide.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $15.5 million to FEDERAL EXPRESS CORPORATION. NGDS SHIPPING

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

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 $15.5 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

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

Analyzing historical spending data for the Department of Veterans Affairs (VA) on shipping and courier services reveals a consistent and significant investment in logistics. Over the past five fiscal years, the VA has typically allocated tens of millions of dollars annually to ensure the timely delivery of medical supplies, pharmaceuticals, and equipment to its vast network of facilities. This spending is often distributed across multiple contracts, including large-scale delivery orders and broader indefinite-delivery/indefinite-quantity (IDIQ) vehicles, reflecting the continuous operational demands of the healthcare system. The specific amounts can fluctuate based on healthcare needs, inventory management strategies, and the competitive landscape of the logistics market. For instance, periods of increased demand for specific medical items or the establishment of new facilities could lead to temporary spikes in spending. The current $15.5 million delivery order represents a substantial, but not unprecedented, portion of the VA's annual logistics budget, underscoring the critical role of reliable shipping in supporting veteran healthcare.

How does the pricing of this Federal Express delivery order compare to other federal shipping contracts?

Benchmarking the pricing of this $15.5 million delivery order against other federal shipping contracts requires access to detailed pricing structures and service level agreements for comparable awards. However, given that Federal Express is a major commercial carrier and the contract was awarded under full and open competition, it is reasonable to assume the pricing is competitive within the market. Federal agencies often leverage large contract volumes and competitive bidding processes to secure favorable rates. The fixed-price nature of this contract further aids in price predictability. To conduct a precise comparison, one would need to analyze per-pound rates, zone-based pricing, expedited service surcharges, and fuel cost adjustments across similar contracts awarded to other carriers like UPS or the United States Postal Service for comparable volumes and service scopes. Without this granular data, the assessment remains qualitative, suggesting the price is likely fair market value due to the competitive award process.

What are the key performance indicators (KPIs) likely being used to evaluate Federal Express's performance on this contract?

Key Performance Indicators (KPIs) for this Federal Express delivery order would likely focus on ensuring the reliability, timeliness, and integrity of the shipping services provided to the Department of Veterans Affairs (VA). Common KPIs in such contracts include on-time delivery rates, which measure the percentage of shipments arriving by the promised deadline. Another critical KPI would be the damage or loss rate, tracking the frequency of packages being damaged or lost in transit, which is particularly important for sensitive medical supplies. Pickup performance, ensuring timely collections from VA facilities, would also be monitored. Furthermore, accuracy in tracking and reporting shipment status, as well as responsiveness to inquiries or issues, are often included. The VA would likely establish specific targets for these KPIs, with potential financial incentives or penalties tied to performance outcomes, ensuring that Federal Express meets the high standards required for supporting veteran healthcare logistics.

What is the track record of Federal Express in fulfilling government contracts, particularly with the Department of Veterans Affairs?

Federal Express (FedEx) has a substantial track record of fulfilling contracts with various U.S. federal government agencies, including the Department of Veterans Affairs (VA). As a major global logistics provider, FedEx possesses the infrastructure, technology, and experience necessary to manage large-scale government shipping requirements. Their past performance typically includes delivering a wide range of goods, from routine mail and packages to critical supplies and equipment, often under demanding timelines and security protocols. While specific details of all past VA contracts are not publicly itemized in this context, FedEx's consistent presence in government contracting suggests a generally positive performance history. Agencies often rely on established carriers like FedEx due to their proven capabilities in network coverage, reliability, and adherence to service level agreements. Any significant performance issues with past contracts would typically be reflected in past performance evaluations used during the source selection process.

What are the potential risks associated with relying on a single large carrier like Federal Express for nationwide shipping?

Relying on a single large carrier like Federal Express for nationwide shipping, while often efficient, introduces several potential risks for the Department of Veterans Affairs (VA). A primary concern is service disruption; unforeseen events such as natural disasters, labor strikes, or major system outages affecting FedEx's operations could significantly impede the delivery of critical medical supplies and equipment, potentially impacting patient care. Another risk is a lack of competitive pressure on pricing and service quality over the long term, as the VA might have limited alternatives if performance degrades or costs increase substantially beyond the initial contract period. Furthermore, a sole reliance could reduce the VA's flexibility in adapting to rapidly changing logistical needs or adopting innovative solutions offered by other providers. Mitigating these risks often involves robust contract management, clear performance standards, contingency planning, and potentially exploring multi-carrier strategies for future procurements.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp

Address: 2003 CORPORATE PLZ, MEMPHIS, TN, 38132

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

Financial Breakdown

Contract Ceiling: $15,526,139

Exercised Options: $15,526,139

Current Obligation: $15,526,139

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline