DoD's $58.9M Contract for Nonscheduled Chartered Freight Air Transportation Awarded to Federal Express Corporation
Contract Overview
Contract Amount: $58,923,895 ($58.9M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2007-10-01
End Date: 2008-09-30
Contract Duration: 365 days
Daily Burn Rate: $161.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 32
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: CRAF AIRLIFT
Place of Performance
Location: MEMPHIS, SHELBY County, TENNESSEE, 38118
Plain-Language Summary
Department of Defense obligated $58.9 million to FEDERAL EXPRESS CORPORATION for work described as: CRAF AIRLIFT Key points: 1. Significant spending on air cargo services highlights reliance on private sector logistics. 2. Federal Express, a major player, likely offered competitive pricing due to scale. 3. Potential risk lies in dependence on a single carrier for critical airlift needs. 4. This contract falls within the broader transportation and logistics sector.
Value Assessment
Rating: good
The contract value of $58.9M for a year of service appears reasonable given the nature of chartered air freight. Benchmarking against similar ad-hoc charter contracts would provide a more precise assessment, but Federal Express's established infrastructure suggests efficient operations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bids were likely considered. This method generally promotes price discovery and ensures the government receives competitive pricing for the services rendered.
Taxpayer Impact: Taxpayers benefit from competitive bidding, which aims to secure the best value for the $58.9M expenditure on essential air transportation.
Public Impact
Ensures timely delivery of critical cargo for Department of Defense operations. Supports military readiness by providing flexible and rapid air transport solutions. Leverages commercial aviation infrastructure to meet specialized government needs. Contributes to the economic activity of the air cargo industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Dependence on a single provider for critical airlift.
- Potential for price escalation in future contracts if competition diminishes.
- Vulnerability to service disruptions if Federal Express faces operational issues.
Positive Signals
- Awarded through full and open competition.
- Utilizes established commercial logistics capabilities.
- Firm fixed price contract provides cost certainty.
Sector Analysis
This contract is within the air transportation services sector, specifically focusing on nonscheduled chartered freight. Spending in this area is crucial for military logistics, enabling rapid deployment and supply chain resilience. Benchmarks for similar government air charter contracts vary widely based on route, aircraft type, and urgency.
Small Business Impact
While Federal Express is a large business, the contract's nature as nonscheduled chartered freight might have allowed for subcontracting opportunities with smaller air charter operators or related logistics providers, though this is not explicitly stated.
Oversight & Accountability
The award through full and open competition suggests a robust process. However, ongoing monitoring of performance and adherence to contract terms by USTRANSCOM is essential to ensure accountability and value for taxpayer money.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Potential for sole-source reliance in future if competition wanes.
- Dependence on commercial carrier's operational stability.
- Geopolitical or economic factors impacting air cargo rates.
- Need for robust oversight to ensure service quality and cost-effectiveness.
Tags
nonscheduled-chartered-freight-air-trans, department-of-defense, tn, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.9 million to FEDERAL EXPRESS CORPORATION. CRAF AIRLIFT
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 $58.9 million.
What is the period of performance?
Start: 2007-10-01. End: 2008-09-30.
What was the specific breakdown of services provided under this contract, and how did it align with the government's actual airlift requirements?
The contract covered nonscheduled chartered freight air transportation. This implies on-demand or as-needed air cargo services rather than regular scheduled flights. The alignment with requirements would depend on the specific mission needs of USTRANSCOM, which could range from urgent equipment delivery to personnel support, necessitating flexible and rapid air transport solutions.
What were the key performance indicators (KPIs) used to evaluate Federal Express's service delivery, and were there any penalties for non-performance?
While specific KPIs are not detailed in the provided data, typical metrics for such contracts include on-time delivery rates, cargo condition upon arrival, and adherence to flight schedules. Penalties for non-performance under a firm fixed-price contract often involve liquidated damages or termination clauses, ensuring accountability for meeting contractual obligations.
How does the per-flight cost under this contract compare to alternative methods of military airlift, such as dedicated government aircraft or other commercial carriers?
A direct per-flight cost comparison is difficult without detailed operational data for government aircraft and other commercial bids. However, chartered services are typically used when government assets are unavailable or insufficient, or when commercial speed and flexibility are paramount. The firm fixed price suggests a negotiated rate intended to be cost-effective for the anticipated service level.
Industry Classification
NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 32
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fedex Corp (UEI: 003141970)
Address: 3131 DEMOCRAT RD BLDG D, MEMPHIS, TN, 09
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $58,923,895
Exercised Options: $58,923,895
Current Obligation: $58,923,895
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HTC71107D0021
IDV Type: IDC
Timeline
Start Date: 2007-10-01
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2009-06-25
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