VA awards $8.5M contract for NGDS Shipping to Federal Express Corporation, highlighting delivery services

Contract Overview

Contract Amount: $8,528,638 ($8.5M)

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: $23.4K/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: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37127

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.5 million to FEDERAL EXPRESS CORPORATION for work described as: NGDS SHIPPING Key points: 1. Contract value represents a significant investment in essential logistics. 2. Federal Express Corporation's established presence suggests operational capacity. 3. Delivery order structure indicates flexibility in service provision. 4. Fixed-price contract type offers cost certainty for the agency. 5. The contract duration of one year allows for regular performance review. 6. Focus on courier and express delivery services underscores critical supply chain needs.

Value Assessment

Rating: good

The contract value of $8.5 million for NGDS Shipping appears reasonable given the scope of services typically provided by major courier companies. Benchmarking against similar federal contracts for express delivery services would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the agency has negotiated a set rate, which is generally favorable for predictable budgeting. However, without detailed service level agreements and performance metrics, a definitive assessment of optimal value is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely considered. While the specific number of bidders is not detailed, this procurement method generally fosters competitive pricing and encourages a wider range of service providers to participate. The exclusion of sources clause suggests a specific reason for its application, which warrants further investigation to ensure it did not unduly limit competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it promotes a competitive environment, potentially leading to lower prices and better service quality through market forces.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, ensuring timely delivery of critical goods and services. Services include express delivery of mail, packages, and potentially medical supplies across various locations. The geographic impact is likely nationwide, supporting VA operations across the United States. Workforce implications may include support for VA administrative and logistical staff reliant on these delivery services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if market rates rise significantly during the contract period.
Dependence on a single large provider could create vulnerabilities if service disruptions occur.

Positive Signals

Leverages the established infrastructure and expertise of a major logistics provider.
Firm fixed-price contract provides budget predictability for the VA.
Full and open competition suggests a competitive bidding process was utilized.

Sector Analysis

The contract falls within the broader transportation and logistics sector, specifically focusing on courier and express delivery services. This sector is characterized by high volume, time-sensitive deliveries, and significant infrastructure investment. Federal spending in this area supports government operations by ensuring the efficient movement of goods and information. Comparable spending benchmarks would involve analyzing the total federal expenditure on express delivery services across various agencies.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as indicated by 'sb': false. There is no explicit mention of small business set-asides or subcontracting requirements. This suggests that the primary awardee, Federal Express Corporation, is a large business, and opportunities for small businesses may be limited unless they are direct subcontractors to Federal Express. Further analysis of subcontracting plans would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms and delivery order structure, requiring Federal Express to meet specified service levels. Transparency is facilitated through contract award databases, though detailed performance reports may not be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Express Corporation Contracts
Department of Veterans Affairs Logistics
NGDS Shipping Services
Courier and Express Delivery Contracts
Government Shipping Services

Risk Flags

Potential for service disruption
Dependence on a single large provider
Need for detailed performance metric review

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.5 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 $8.5 million.

What is the period of performance?

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

What is the historical spending pattern of the VA on NGDS Shipping services, and how does this award compare?

Analyzing historical spending data for NGDS Shipping services by the Department of Veterans Affairs (VA) is crucial for contextualizing the current $8.5 million award. Without access to specific historical VA spending figures for this exact service category, a direct comparison is difficult. However, federal agencies typically award multi-year contracts for logistics and shipping, with values fluctuating based on demand, service scope, and market conditions. If previous contracts were significantly lower or higher, it could indicate changes in agency needs, increased operational tempo, or shifts in pricing. For instance, a substantial increase might suggest expanded requirements or inflationary pressures, while a decrease could point to service consolidation or efficiency gains. Understanding these historical trends provides insight into the long-term commitment and potential scalability of these essential services for the VA.

What specific performance metrics are included in the contract to ensure service quality and timeliness?

The provided data does not detail the specific performance metrics included in the contract. However, for a contract of this nature, typical performance metrics would likely encompass on-time delivery rates, package integrity (minimal damage), tracking accuracy, and customer service responsiveness. The firm fixed-price structure implies that Federal Express Corporation is obligated to meet these standards to receive full payment. The Department of Veterans Affairs would likely have a system for monitoring these metrics, potentially through regular reporting from the contractor and internal tracking. Failure to meet key performance indicators could result in penalties, reduced payment, or even contract termination, depending on the severity and contractual stipulations. A thorough review of the contract's Performance Work Statement (PWS) would be necessary to ascertain the exact metrics and their associated consequences.

How does the pricing of this contract benchmark against other federal agencies or commercial rates for similar courier and express delivery services?

Benchmarking the pricing of this $8.5 million contract against other federal agencies or commercial rates requires access to detailed pricing structures and service level agreements. The 'firm fixed price' indicates a set cost, but the underlying rates for different service levels (e.g., overnight, priority, standard) are not specified. Generally, large federal contracts with major carriers like Federal Express are negotiated to achieve economies of scale. However, the 'full and open competition after exclusion of sources' clause warrants attention; if the exclusion significantly limited the pool of potential bidders, it might have impacted the final negotiated price. Comparing the per-unit cost (e.g., cost per package, cost per pound) for specific service types against publicly available commercial rate cards or other government contracts (like GSA schedules) would be necessary for a robust benchmark. Without this granular data, it's challenging to definitively state if the pricing is optimal, though the competitive award process suggests an effort to secure fair market value.

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

Federal Express Corporation (FedEx) has a long-standing and extensive track record of providing logistics and delivery services to various U.S. government agencies, including the Department of Defense and the Department of Veterans Affairs (VA). They are a major player in the express delivery market, known for their global network and technological capabilities. Their experience with government contracts typically involves adherence to strict security protocols, reporting requirements, and performance standards. While specific details of past VA contracts are not provided here, FedEx's consistent presence as a bidder and awardee on similar federal solicitations suggests a demonstrated ability to meet government needs. Performance reviews and past performance evaluations, often considered during the federal procurement process, would likely reflect their capabilities and reliability in fulfilling such agreements.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks associated with this NGDS Shipping contract include service disruptions due to weather, labor issues, or unforeseen operational challenges faced by Federal Express Corporation. There's also a risk of price increases in the future if the current contract is a short-term solution or if subsequent renewals are not competitively bid. Another risk could be the contractor's failure to meet stringent delivery timelines or maintain package integrity, which could impact VA operations. Mitigation strategies typically involve the contract's performance clauses, which allow the VA to hold FedEx accountable for service failures, potentially through financial penalties or corrective action plans. The firm fixed-price nature helps mitigate budget overrun risks for the VA. Furthermore, the VA likely maintains contingency plans and may have agreements with alternative carriers to ensure continuity of service in case of significant disruptions with the primary provider.

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: $8,528,638

Exercised Options: $8,528,638

Current Obligation: $8,528,638

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline