Federal Express awarded $33.1M for air transportation services, highlighting a significant contract for critical logistics

Contract Overview

Contract Amount: $33,131,820 ($33.1M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Defense

Start Date: 2018-06-26

End Date: 2018-09-30

Contract Duration: 96 days

Daily Burn Rate: $345.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES

Plain-Language Summary

Department of Defense obligated $33.1 million to FEDERAL EXPRESS CORPORATION for work described as: IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. The contract value of $33.1M represents a substantial investment in ensuring the availability of air transport. 2. Competition dynamics for this contract are crucial for understanding price efficiency and service quality. 3. Risk indicators may include operational disruptions, geopolitical factors affecting air routes, and contractor performance. 4. Performance context involves the reliability and timeliness of air cargo delivery for defense needs. 5. This contract positions Federal Express as a key player in supporting government logistics operations. 6. The firm fixed-price nature of the contract shifts cost risk to the contractor.

Value Assessment

Rating: good

The $33.1M award for air transportation services appears reasonable given the critical nature of supporting defense logistics. Benchmarking against similar contracts for charter air services would provide a more precise value-for-money assessment. The firm fixed-price structure suggests a degree of confidence in cost estimation by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a competitive environment, which typically leads to better pricing and service offerings for the government. The level of competition is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider pool of qualified providers.

Public Impact

The Department of Defense benefits from reliable and timely air transportation for personnel and/or cargo. Services delivered include nonscheduled chartered passenger air transportation, ensuring flexible and on-demand movement. Geographic impact is likely widespread, supporting military operations globally or within specific theaters. Workforce implications may involve the utilization of Federal Express's extensive pilot, crew, and ground support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased fuel costs impacting overall program expenditure if not adequately hedged.
Geopolitical instability could disrupt flight paths or increase operational risks.
Dependence on a single contractor for critical logistics could pose a vulnerability if performance falters.

Positive Signals

Federal Express is a well-established logistics provider with a proven track record in air cargo.
The firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process and potential for competitive pricing.

Sector Analysis

The air transportation sector is vital for global commerce and national security, enabling rapid movement of goods and personnel. This contract falls within the broader logistics and support services category, a significant segment of federal spending. Comparable spending benchmarks in this area are often measured by the volume of cargo moved, passenger miles, and the complexity of routes served.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Subcontracting opportunities for small businesses may exist within Federal Express's broader supply chain, but are not explicitly mandated by this award. The impact on the small business ecosystem is therefore indirect.

Oversight & Accountability

Oversight for this contract would typically fall under USTRANSCOM, with potential involvement from the Department of Defense's Inspector General. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract award databases, though specific operational details may remain sensitive.

Related Government Programs

Military Sealift Command (MSC) Contracts
Air Mobility Command (AMC) Contracts
Logistics and Supply Chain Management Services
Defense Transportation Services

Risk Flags

Potential for cost overruns if fuel prices escalate significantly.
Risk of service disruption due to unforeseen global events.
Dependence on contractor's operational stability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.1 million to FEDERAL EXPRESS CORPORATION. IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $33.1 million.

What is the period of performance?

Start: 2018-06-26. End: 2018-09-30.

What is Federal Express's historical performance record with the Department of Defense for similar air transportation contracts?

Federal Express has a long-standing relationship with the Department of Defense, frequently providing air transportation services. While specific performance metrics for this particular contract (2018-2018) are not detailed here, the company generally maintains a strong reputation for reliability and timely delivery. Historical data from contract databases often shows a low rate of significant performance issues for major carriers like FedEx when fulfilling government contracts. However, a deeper dive into past contract awards, including any past performance evaluations or disputes, would be necessary for a comprehensive assessment. The sheer volume of operations suggests occasional minor issues are statistically probable, but the key is their resolution and overall adherence to contractual obligations.

How does the awarded amount of $33.1 million compare to similar air transportation contracts awarded by USTRANSCOM or other DoD components?

Comparing the $33.1 million award requires context regarding the duration, scope, and specific services rendered. This contract, awarded in 2018 for a period of approximately 3 months (June-September), suggests a significant operational tempo or a high-value, short-term requirement. If this was for routine, scheduled cargo, the per-day cost would be substantial. However, for nonscheduled chartered passenger air transportation, especially for potentially large groups or in remote locations, the cost can be justified. Benchmarking against other full and open competition awards for similar charter services, particularly those involving rapid deployment or specialized aircraft, would be essential. Without more granular data on flight hours, passenger capacity, and routes, a precise comparison is difficult, but the amount indicates a substantial logistical undertaking.

What are the primary risk indicators associated with this specific contract for air transportation services?

The primary risk indicators for this contract include operational risks such as flight delays or cancellations due to weather, mechanical issues, or air traffic control. Geopolitical risks are also significant, as international flights can be affected by political instability, border closures, or security threats in transit or destination countries. Contractor performance risk is present, although Federal Express is a large, established entity; any failure to meet delivery schedules or service standards could impact DoD operations. Furthermore, economic risks like sudden fuel price spikes could strain the fixed-price contract if not adequately managed by the contractor. Finally, security risks related to cargo or passenger screening and transport must be continuously mitigated.

What is the expected program effectiveness and impact of this contract on DoD's logistical capabilities?

The expected program effectiveness hinges on the reliable and timely execution of nonscheduled chartered passenger air transportation. This contract is designed to enhance the Department of Defense's logistical flexibility, providing on-demand capacity that may not be available through standard military airlift. Its impact on DoD's capabilities is likely to be most pronounced during surge operations, contingency deployments, or when supporting missions in areas with limited infrastructure. By securing dedicated charter services, the DoD can ensure personnel can be moved efficiently to critical locations, supporting operational readiness and mission success. The effectiveness is measured by the contract's ability to meet stringent timelines and operational requirements consistently.

How has historical spending by the DoD on air transportation services, particularly through charter agreements, trended over the past five years?

Historical spending by the DoD on air transportation services, including charter agreements, has generally remained substantial, reflecting the global nature of military operations. While specific figures fluctuate based on geopolitical events and operational tempo, there's a consistent reliance on both organic airlift and contracted commercial services. Charter agreements, like the one awarded to Federal Express, are often utilized to supplement organic capabilities, providing surge capacity or specialized services. Trends may show an increasing reliance on commercial charters for certain types of missions due to cost-effectiveness or availability, particularly for passenger transport and time-sensitive cargo. Analyzing spending patterns would reveal periods of heightened activity corresponding to major deployments or conflicts, alongside steady baseline spending for routine logistical support.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp

Address: 2955 REPUBLICAN DR FL 1, MEMPHIS, TN, 38118

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

Financial Breakdown

Contract Ceiling: $33,131,820

Exercised Options: $33,131,820

Current Obligation: $33,131,820

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71117DCC11

IDV Type: IDC

Timeline