VA awards $26M contract for mail manifesting services to FedEx Supply Chain Distribution System, Inc

Contract Overview

Contract Amount: $26,000,000 ($26.0M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $71.4K/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 $26.0 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 good value. 2. Focus on mail manifesting services indicates a need for efficient mail processing. 3. The contract duration of one year with options for extension provides flexibility. 4. Fixed-price contract type helps control costs and manage budget predictability. 5. The award to a large, established provider may indicate a focus on reliability. 6. Geographic scope limited to Tennessee suggests localized operational needs.

Value Assessment

Rating: good

The contract's value of $26 million for mail manifesting services over approximately one year appears reasonable given the scope. Benchmarking against similar contracts for large-scale mail processing and logistics services would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without specific performance metrics or detailed service level agreements, a definitive assessment of cost-effectiveness is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive pricing. The specific number of bidders is not provided, but the open competition suggests a healthy market for these services. The use of a BPA Call implies that a broader contract vehicle was already in place, with this call representing a specific task order.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging a wide range of vendors to offer their best prices.

Public Impact

Veterans will benefit from more efficient mail processing, potentially leading to faster delivery of important documents and supplies. The contract supports essential administrative and logistical functions within the Department of Veterans Affairs. Services are primarily focused within Tennessee, impacting VA operations in that state. The contract supports the workforce of FedEx Supply Chain Distribution System, Inc., contributing to employment in the logistics sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly specific to FedEx's system.
Dependence on a single provider for a critical function like mail manifesting.
Limited visibility into the specific operational efficiencies gained without detailed performance data.

Positive Signals

Award to an established provider with known capabilities in supply chain and distribution.
Firm fixed-price contract provides cost certainty for the VA.
Competitive bidding process suggests a focus on achieving market-driven pricing.

Sector Analysis

Mail manifesting services fall within the broader business support services sector, which includes a wide range of administrative and operational assistance. This sector is characterized by numerous providers, from small specialized firms to large logistics companies. The market size for such services is substantial, driven by the needs of government agencies and large corporations requiring efficient mailroom operations, shipping, and tracking. This contract represents a specific, albeit significant, expenditure within this segment, likely focused on optimizing the VA's internal mail handling and distribution processes.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award to FedEx Supply Chain Distribution System, Inc., a large corporation, suggests that subcontracting opportunities for small businesses may be limited unless specifically mandated or pursued by the prime contractor. Analysis of the prime contractor's subcontracting plan would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the Department of Veterans Affairs. Accountability measures are usually embedded in the contract's performance work statement and service level agreements. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

General Services Administration (GSA) Mail Management Services
US Postal Service (USPS) Business Solutions
Logistics and Supply Chain Management Services

Risk Flags

Contract duration is relatively short, potentially requiring re-competition soon.
Limited geographic scope may indicate a need for broader solutions or fragmented service delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $26.0 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 $26.0 million.

What is the period of performance?

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

What is the track record of FedEx Supply Chain Distribution System, Inc. in performing similar mail manifesting services for government agencies?

FedEx Supply Chain Distribution System, Inc. is a well-established entity within the logistics and supply chain industry, known for its extensive capabilities in distribution, warehousing, and transportation. While specific details on their past performance solely on 'mail manifesting services' for government entities are not explicitly detailed in the provided data, their broader experience in managing complex supply chains suggests a strong foundation for handling such requirements. Government contracts often require rigorous performance metrics and past performance evaluations; therefore, it can be inferred that FedEx likely met or exceeded these standards to secure this award. Further investigation into their contract history with federal agencies, particularly for services involving high-volume mail processing, tracking, and reporting, would provide a more definitive assessment of their track record in this specific niche.

How does the awarded price of $26 million compare to market rates for similar mail manifesting services?

The awarded price of $26 million for approximately one year of mail manifesting services needs to be benchmarked against market rates for comparable contracts. Factors influencing this comparison include the volume of mail processed, the complexity of the manifesting requirements (e.g., tracking, reporting, specific carrier integrations), the geographic scope (limited to Tennessee), and the level of service required. Without specific data on the volume and complexity, a direct comparison is difficult. However, given that FedEx Supply Chain Distribution System, Inc. is a major player in logistics, the price could reflect a comprehensive service offering. A thorough analysis would involve examining publicly available data on similar federal or large commercial contracts, considering the scale and specific deliverables to determine if the price represents good value for money or if it is on the higher end of the market spectrum.

What are the primary risks associated with this contract for the Department of Veterans Affairs?

The primary risks associated with this contract include potential service disruptions if FedEx experiences operational issues, which could impact the timely delivery of critical VA communications and supplies. There's also a risk of cost escalation if the contract terms do not adequately account for unforeseen increases in mail volume or processing complexity, although the firm fixed-price nature mitigates this to some extent for the government. Another risk is vendor lock-in, where the VA might become overly reliant on FedEx's specific systems and processes, making it difficult or costly to switch providers in the future. Performance deficiencies, where the contractor fails to meet service level agreements, represent a significant risk that could affect VA operations. Finally, data security and privacy risks related to handling sensitive veteran information during the manifesting process must be carefully managed.

How effective is the firm fixed-price contract type in ensuring program effectiveness for mail manifesting services?

The firm fixed-price (FFP) contract type is generally effective in ensuring cost control and predictability for the government, as the contractor assumes the risk of cost overruns. For mail manifesting services, this means the VA has a clear understanding of the total cost, assuming the scope remains consistent. This structure incentivizes the contractor to operate efficiently to maintain profitability. However, FFP contracts can sometimes limit flexibility if the scope of work needs to change significantly, potentially requiring contract modifications. Program effectiveness, in terms of the quality and timeliness of the manifesting services, relies heavily on the contractor's operational capabilities and adherence to the performance work statement. While FFP helps manage budget, it doesn't inherently guarantee superior service quality; robust performance monitoring and clear service level agreements are crucial complements to ensure overall program effectiveness.

What are the historical spending patterns for mail manifesting services by the Department of Veterans Affairs?

Historical spending patterns for mail manifesting services by the Department of Veterans Affairs are not detailed in the provided data. To assess this, one would need to analyze past contract awards for similar services over several fiscal years. This analysis would reveal trends in contract values, durations, awarded vendors, and competition levels. Understanding historical spending can help identify whether this $26 million award represents an increase or decrease in investment in these services, whether the VA has consistently used competitive bidding, and if there have been shifts in the types of providers engaged. Such insights are crucial for strategic budgeting, identifying potential cost savings, and evaluating the long-term effectiveness of the VA's approach to managing its mail processing needs.

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: $26,000,000

Exercised Options: $26,000,000

Current Obligation: $26,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline