DoD's Federal Express Contract for Transportation Shipments Reaches $36.9M in May 2023

Contract Overview

Contract Amount: $36,897,754 ($36.9M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Defense

Start Date: 2023-05-01

End Date: 2023-05-31

Contract Duration: 30 days

Daily Burn Rate: $1.2M/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38132

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to FEDERAL EXPRESS CORPORATION for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS. Key points: 1. The Department of Defense (DoD) spent $36.9 million on consolidated transportation shipments via Federal Express in May 2023. 2. This contract falls under the Couriers and Express Delivery Services sector, a competitive market. 3. The spending represents a significant portion of the $1.23 million awarded for delivery orders. 4. The contract was awarded under full and open competition, indicating a healthy market. 5. No small business participation was noted in this specific award.

Value Assessment

Rating: good

The $36.9 million in spending for May 2023 appears to be for a large volume of consolidated shipments. Benchmarking against similar large-scale logistics contracts would provide a clearer picture of value, but the firm fixed-price structure suggests cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition after exclusion of sources. This method generally promotes competitive pricing and ensures the government receives the best value by allowing all qualified vendors to bid.

Taxpayer Impact: The competitive nature of the award suggests taxpayers are likely benefiting from market-driven pricing for these essential transportation services.

Public Impact

Ensures timely delivery of critical goods and materials for military operations. Supports the logistical backbone of the Department of Defense's global reach. Provides essential services that enable military readiness and deployment capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation in this specific award.
Potential for price increases in future contract periods if competition diminishes.
Dependence on a single carrier (Federal Express) for a large volume of shipments.

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract provides cost certainty.
Consolidated shipments can lead to efficiency gains.

Sector Analysis

This contract falls within the Couriers and Express Delivery Services sector, which is characterized by significant private sector investment and competition. Government spending in this area is crucial for maintaining operational logistics, and benchmarks often relate to per-package costs and delivery speed.

Small Business Impact

While this specific award did not involve small businesses, the broader Couriers and Express Delivery Services sector includes many small and medium-sized enterprises. Future solicitations could explore opportunities for greater small business inclusion.

Oversight & Accountability

The contract was awarded under full and open competition, suggesting a robust process. However, ongoing monitoring of delivery performance and pricing trends is essential for accountability and ensuring continued value.

Related Government Programs

Couriers and Express Delivery Services
Department of Defense Contracting
USTRANSCOM Programs

Risk Flags

High dollar value concentrated in a single month.
No small business participation noted.
Reliance on a single large carrier.
Potential for price escalation in future periods.
Limited visibility into per-unit costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to FEDERAL EXPRESS CORPORATION. CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.

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 $36.9 million.

What is the period of performance?

Start: 2023-05-01. End: 2023-05-31.

What is the historical spending trend for this contract over multiple years?

Analyzing historical spending data would reveal if the $36.9 million in May 2023 represents a typical monthly expenditure, an increase, or a decrease. This trend analysis is crucial for understanding long-term cost management and identifying potential shifts in demand or service utilization by the Department of Defense.

How does the per-unit cost of these consolidated shipments compare to industry benchmarks?

Without specific per-unit cost data, a direct comparison is difficult. However, if the average cost per shipment is higher than industry averages for similar services, it could indicate potential inefficiencies or a need for renegotiation, even under a competitive contract. This requires detailed cost breakdowns.

What are the key performance indicators (KPIs) for this contract, and how is Federal Express performing against them?

Understanding the KPIs, such as on-time delivery rates, package condition, and tracking accuracy, is vital. Consistent performance against these metrics ensures the effectiveness of the service. Any deviations could signal operational issues or a need for corrective action by the contractor.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $36,897,754

Exercised Options: $36,897,754

Current Obligation: $36,897,754

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline