DoD's $63M Air Cargo Contract with FedEx: A Look at Value, Competition, and Oversight
Contract Overview
Contract Amount: $62,963,576 ($63.0M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2009-10-01
End Date: 2010-12-31
Contract Duration: 456 days
Daily Burn Rate: $138.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 30
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: AIR TRANSPORTATION SERVICES - CARGO
Place of Performance
Location: MEMPHIS, SHELBY County, TENNESSEE, 38118
Plain-Language Summary
Department of Defense obligated $63.0 million to FEDERAL EXPRESS CORPORATION for work described as: AIR TRANSPORTATION SERVICES - CARGO Key points: 1. Significant contract value of $62.96M for air cargo services. 2. Sole provider identified as Federal Express Corporation. 3. Contract awarded under 'Full and Open Competition After Exclusion of Sources', raising questions about true competition. 4. Sector is Air Transportation, a critical component of logistics and defense operations.
Value Assessment
Rating: fair
The contract's value of $62.96M for 456 days of service needs comparison to similar DoD cargo contracts. Without benchmarks, assessing optimal pricing is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The award was made under 'Full and Open Competition After Exclusion of Sources'. This suggests a limited competition scenario where specific criteria may have excluded other potential bidders, potentially impacting price discovery.
Taxpayer Impact: The limited competition may have resulted in higher costs for taxpayers compared to a truly open bidding process.
Public Impact
Ensures critical cargo delivery for the Department of Defense. Supports national security by maintaining essential transportation capabilities. Impacts the air cargo industry through a substantial government contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises concerns about cost-effectiveness.
- Lack of clear justification for excluding sources.
- Potential for price inflation due to restricted bidding.
Positive Signals
- Ensures essential air transportation services are provided.
- Contract awarded to a well-established carrier.
Sector Analysis
This contract falls within the Air Transportation sector, specifically for cargo. Government spending in this area is crucial for logistical support, especially for defense agencies like the DoD. Benchmarks for similar cargo contracts would be essential for a thorough value assessment.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine if small businesses had opportunities to participate.
Oversight & Accountability
The contract's award method, 'Full and Open Competition After Exclusion of Sources', warrants further oversight to ensure the exclusion of sources was justified and did not unduly limit competition or taxpayer value.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Limited competition may lead to higher costs.
- Lack of transparency in source exclusion.
- Potential for reduced innovation due to fewer bidders.
- Need for strong performance monitoring to ensure value.
Tags
nonscheduled-chartered-freight-air-trans, department-of-defense, tn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.0 million to FEDERAL EXPRESS CORPORATION. AIR TRANSPORTATION SERVICES - CARGO
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 $63.0 million.
What is the period of performance?
Start: 2009-10-01. End: 2010-12-31.
What specific criteria led to the exclusion of sources in this 'Full and Open Competition After Exclusion of Sources' award, and how did this impact the final price?
The specific criteria for excluding sources are not detailed in the provided data. Typically, such exclusions might be based on unique capabilities, security requirements, or prior performance. However, without explicit justification, it's difficult to assess the impact on price. A more competitive process could potentially yield lower costs for the government and taxpayers.
How does the per-unit cost or overall pricing of this $63M FedEx contract compare to similar air cargo contracts awarded by the DoD or other federal agencies?
Benchmarking this contract's pricing against similar federal air cargo contracts is crucial for a comprehensive value assessment. Without comparative data on per-unit costs (e.g., cost per ton-mile) or overall contract value relative to service scope, it's challenging to determine if the $63M represents a fair market price or if there's potential for cost savings.
What mechanisms are in place to ensure the effectiveness and efficiency of Federal Express Corporation's air cargo services under this contract, particularly given the limited competition?
Effectiveness is typically ensured through performance metrics, service level agreements (SLAs), and delivery tracking within the contract. Given the limited competition, robust oversight and performance monitoring by USTRANSCOM are even more critical to ensure the DoD receives the required services efficiently and that the contractor meets all contractual obligations.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 30
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fedex Corp
Address: 3131 DEMOCRAT RD BLDG D, MEMPHIS, TN, 38118
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $62,963,576
Exercised Options: $62,963,576
Current Obligation: $62,963,576
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HTC71109D5005
IDV Type: IDC
Timeline
Start Date: 2009-10-01
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2023-08-11
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