Federal Express awarded $34.5M for air transportation services, highlighting significant defense logistics needs

Contract Overview

Contract Amount: $34,545,092 ($34.5M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Defense

Start Date: 2018-10-01

End Date: 2019-09-30

Contract Duration: 364 days

Daily Burn Rate: $94.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Defense

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

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38118

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $34.5 million to FEDERAL EXPRESS CORPORATION for work described as: IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. Contract value represents a substantial investment in maintaining critical air transport capabilities. 2. Competition dynamics suggest a robust market for specialized air cargo and passenger services. 3. Performance risk appears moderate given the established nature of the service provider. 4. This contract supports ongoing operational readiness for national defense logistics. 5. The award falls within the broader category of defense transportation and logistics spending. 6. Fixed-price contract type offers cost certainty for the government.

Value Assessment

Rating: good

The contract value of $34.5 million for a one-year period for air transportation services appears reasonable given the nature of the services provided by a major carrier like Federal Express. Benchmarking against similar contracts for charter passenger and cargo air transport is challenging without more specific service details (e.g., aircraft type, routes, frequency). However, the fixed-price nature of the contract provides cost predictability. The award amount should be assessed in the context of the operational tempo and strategic importance of the services rendered by USTRANSCOM.

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 while the competition was broad, specific exclusions were applied, possibly due to security or operational requirements. With 9 bidders, the level of competition was healthy, suggesting that multiple qualified vendors were interested and capable of performing the services. This level of competition generally supports price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: A competitive bidding process with multiple bidders helps ensure that taxpayer funds are used efficiently by driving down costs through market forces.

Public Impact

The Department of Defense benefits from reliable and flexible air transportation for personnel and potentially cargo. Services delivered include nonscheduled chartered passenger air transportation, crucial for troop movement and logistical support. The geographic impact is national, supporting military operations across various locations as needed. Workforce implications include support for pilots, crew, and ground support personnel within Federal Express.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if service demands exceed initial projections within the fixed-price structure.
Dependence on a single contractor for critical transportation needs could pose a risk if performance issues arise.

Positive Signals

Award to a well-established carrier like Federal Express suggests a high likelihood of reliable service delivery.
The fixed-price contract type provides budget certainty and limits the government's exposure to cost overruns.
Multiple bidders indicate a competitive market, which generally leads to better value.

Sector Analysis

The air transportation services sector is vital for both commercial and government operations, particularly for defense logistics. This contract falls under the broader aerospace and defense industry, which is characterized by high technological requirements and significant government spending. The market for specialized air charter services is competitive, with established players like Federal Express offering a range of capabilities. Government spending in this area is often driven by strategic needs for rapid deployment and logistical support, making reliable air carriers essential.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false' and 'sb: false'. The primary contractor, Federal Express, is a large corporation. 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 large prime contractors often engage small businesses in their broader supply chains.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Transportation Command (USTRANSCOM), the contracting agency. Mechanisms likely include performance monitoring, delivery tracking, and financial audits. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Military Sealift Command (MSC) Contracts
Air Mobility Command (AMC) Charter Services
Defense Logistics Agency (DLA) Transportation Services
Global Contingency Logistics Support

Risk Flags

Potential for performance issues impacting mission readiness.
Dependence on a single large contractor for critical services.
Risk of cost escalation if contract terms are not strictly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.5 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 $34.5 million.

What is the period of performance?

Start: 2018-10-01. End: 2019-09-30.

What is the historical spending pattern for air transportation services by USTRANSCOM with Federal Express?

Analyzing historical spending requires access to detailed contract databases beyond the provided data. However, Federal Express is a major global logistics provider with a long-standing relationship with the U.S. government, including the Department of Defense. USTRANSCOM, responsible for the global７transportation and logistics services for the DoD, likely awards multiple contracts for various air transportation needs annually. The $34.5 million awarded in this specific instance represents a portion of the total annual expenditure. To understand the pattern, one would need to examine contract awards over several fiscal years, looking at the frequency, value, and nature of services procured from Federal Express and other carriers to identify trends in demand and pricing.

How does the per-unit cost of this contract compare to similar government air charter contracts?

Determining a precise per-unit cost comparison is difficult without specific details on the services rendered, such as the type of aircraft used, passenger capacity, flight hours, or cargo weight/volume. The provided data indicates a total award of $34.5 million for nonscheduled chartered passenger air transportation over 364 days. If we were to approximate a daily cost, it would be roughly $94,904 per day ($34.5M / 364 days). However, this is a very broad metric. A true benchmark would involve comparing the cost per flight hour, per passenger mile, or per ton-mile against other contracts for similar aircraft types and mission profiles awarded by DoD or other federal agencies. Given Federal Express's operational scale, their pricing might reflect economies of scale but could also be influenced by brand recognition and established relationships.

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

While specific KPIs are not detailed in the provided data, typical performance indicators for air transportation contracts include on-time performance (departure and arrival), flight safety records, passenger and baggage handling efficiency, communication responsiveness, and adherence to mission requirements. For chartered passenger flights, meeting schedules, ensuring passenger comfort and safety, and providing timely updates are critical. USTRANSCOM would likely monitor these metrics through performance reports, feedback from deployed personnel, and direct observation. Failure to meet agreed-upon KPIs could result in penalties, reduced future contract opportunities, or contract termination, depending on the severity of the performance issues.

What is the strategic importance of this contract for USTRANSCOM's mission readiness?

This contract is strategically important for USTRANSCOM's mission readiness by ensuring the availability of flexible and responsive air transportation for personnel. In situations requiring rapid deployment, personnel rotations, or contingency operations, nonscheduled charter flights offer a critical capability that may not always be met by military airlift assets alone. The ability to quickly secure such services from a reliable provider like Federal Express enhances USTRANSCOM's agility and responsiveness, enabling the Department of Defense to project power and support global operations effectively. This capability is vital for maintaining operational tempo and ensuring that military personnel can be moved efficiently to where they are needed.

Are there any identified risks associated with Federal Express's track record in fulfilling similar government contracts?

Federal Express is a major, established global logistics company with extensive experience serving government contracts. While specific performance issues on past contracts are not detailed here, large contractors of this size generally have robust systems in place to manage performance. Potential risks could include unforeseen operational disruptions (e.g., weather, mechanical issues), labor disputes, or changes in regulatory environments affecting air travel. However, their long history and significant infrastructure suggest a generally low risk profile for contract fulfillment. A thorough review would involve examining past performance evaluations and any reported disputes or contract breaches, which are typically available through government performance databases.

Industry Classification

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

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: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp (UEI: 003141970)

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: $34,545,092

Exercised Options: $34,545,092

Current Obligation: $34,545,092

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71118DCC37

IDV Type: IDC

Timeline