VA awards $6.4M contract for express delivery services to Federal Express Corporation

Contract Overview

Contract Amount: $6,398,684 ($6.4M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $17.6K/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: FED EX NGDS SHIPPING

Place of Performance

Location: CHELMSFORD, MIDDLESEX County, MASSACHUSETTS, 01824

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.4 million to FEDERAL EXPRESS CORPORATION for work described as: FED EX NGDS SHIPPING Key points: 1. Contract awarded to a single, established provider for express delivery. 2. Pricing appears competitive given the fixed-price nature and duration. 3. Potential for service disruptions if contractor performance falters. 4. This contract supports ongoing logistical needs for the VA. 5. The sector is characterized by established players and high volume. 6. Delivery orders suggest flexibility in service utilization.

Value Assessment

Rating: good

The contract value of $6.4 million over two years for express delivery services appears reasonable. Benchmarking against similar federal contracts for courier and express delivery services indicates that this award falls within expected spending ranges for a large agency like the VA. The firm fixed-price structure provides cost certainty for the government, and the multiple delivery orders suggest efficient utilization of the contract's capacity. Without specific per-delivery data, a precise value-for-money assessment is challenging, but the overall structure is sound.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. The specific reasons for exclusion are not detailed in the provided data. The presence of multiple delivery orders under this contract suggests that the initial competition likely established a baseline for pricing and service. However, the limited nature of the competition might have restricted the number of potential bidders and potentially impacted the final price discovery.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price that could have been achieved through broader solicitation. However, the fixed-price nature helps control costs once the contract is awarded.

Public Impact

Veterans and VA staff benefit from timely delivery of medical supplies, equipment, and administrative documents. Ensures continuity of operations for critical VA healthcare and administrative functions. Services likely impact VA facilities nationwide, supporting distributed operations. Supports the logistics workforce involved in shipping and receiving.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential over-reliance on a single provider could lead to service disruptions if performance issues arise.
Limited competition may have resulted in a higher price than a fully open bid process.
Lack of detailed performance metrics makes it difficult to assess efficiency beyond delivery confirmation.

Positive Signals

Award to an established provider with a known track record in express delivery.
Firm fixed-price contract provides budget certainty for the VA.
Multiple delivery orders indicate active and ongoing need for the service.
Contract duration allows for stable service provision over two years.

Sector Analysis

The courier and express delivery services sector is a mature market dominated by large, established players. Federal spending in this area is substantial, driven by the logistical needs of various government agencies for mail, packages, and time-sensitive documents. This contract fits within the broader category of logistics and transportation services, where efficiency, speed, and reliability are paramount. Benchmarks for similar contracts often focus on per-package costs or volume-based pricing, which are not detailed here.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Federal Express Corporation is a large business. There is no explicit information regarding subcontracting plans for small businesses within this specific award. Therefore, the direct impact on the small business ecosystem from this particular contract is likely minimal, though Federal Express may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. The firm fixed-price nature simplifies some aspects of oversight by focusing on delivery and adherence to terms. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Schedules for Shipping and Distribution
Department of Defense Logistics and Transportation Services
US Postal Service Contracts
Other Agency Express Delivery Contracts

Risk Flags

Limited competition may impact price.
Potential for service disruption due to single provider reliance.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.4 million to FEDERAL EXPRESS CORPORATION. FED EX 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 $6.4 million.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is the historical spending pattern of the VA on express delivery services?

Analyzing historical spending requires access to comprehensive contract databases over multiple fiscal years. Without that specific data, it's difficult to provide a precise pattern. However, federal agencies like the VA consistently require express delivery services for medical supplies, administrative documents, and equipment. Spending typically fluctuates based on agency needs, operational tempo, and the availability of competitive contract vehicles. The current $6.4 million award over two years suggests a sustained, significant requirement for these services, aligning with the VA's broad mission.

How does the pricing of this Federal Express contract compare to market rates for similar services?

A direct comparison of pricing is challenging without specific per-unit cost data (e.g., cost per package, cost per mile) and service level details. Federal Express operates on a complex pricing structure that includes base rates, surcharges, and volume discounts. Given this is a firm fixed-price contract awarded after some form of competition, it is presumed to be at a rate considered fair and reasonable by the contracting officer at the time of award. However, without granular data, it's impossible to definitively state if it's above or below typical market rates, which can vary significantly based on service speed, destination, and package characteristics.

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

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, typical KPIs for express delivery services include on-time delivery rates, package condition upon arrival (damage/loss rates), tracking accuracy, and responsiveness to inquiries or issues. The Department of Veterans Affairs would likely have established specific metrics within the contract's Performance Work Statement (PWS) to monitor these aspects. Failure to meet these KPIs could result in contract remedies, such as price adjustments or termination.

What is the potential risk associated with relying on a single large provider like Federal Express for critical VA deliveries?

The primary risk associated with relying on a single large provider like Federal Express is service disruption. This could stem from labor disputes (e.g., strikes), natural disasters impacting their network, system outages, or the company prioritizing higher-paying commercial clients during peak demand. For the VA, such disruptions could impact the delivery of critical medical supplies, patient care, and essential administrative functions, potentially leading to operational inefficiencies and negative patient outcomes. Mitigation strategies often include robust service level agreements (SLAs) and contingency planning.

How does this contract align with the VA's overall logistics and supply chain strategy?

This contract directly supports the VA's logistics and supply chain strategy by ensuring the reliable and timely movement of goods and information. The VA manages a vast network of healthcare facilities and administrative offices, necessitating efficient transportation solutions. Utilizing established providers like Federal Express allows the VA to leverage existing infrastructure and expertise, focusing its internal resources on core healthcare delivery rather than managing a complex delivery network. The contract's duration suggests a strategic decision to ensure continuity for essential services.

What is the significance of the contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'?

This contract type signifies that the solicitation was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, 'after exclusion of sources' indicates that, for reasons not specified in the summary data, certain potential offerors were excluded from the competition before or during the evaluation process. This could be due to various factors, such as specific technical requirements, past performance issues, or other justifications outlined in federal acquisition regulations. While competition occurred, the exclusion limits the breadth of that competition and may impact the final price and innovation achieved.

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: $6,398,684

Exercised Options: $6,398,684

Current Obligation: $6,398,684

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline