DoD's $144.5M Civil Reserve Air Fleet Contract with FedEx Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $144,508,436 ($144.5M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2012-10-01
End Date: 2013-09-30
Contract Duration: 364 days
Daily Burn Rate: $397.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES
Plain-Language Summary
Department of Defense obligated $144.5 million to FEDERAL EXPRESS CORPORATION for work described as: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. The contract awarded to Federal Express Corporation for air transportation services represents a significant expenditure. 2. While a full and open competition was cited, the specific impact on price discovery warrants further examination. 3. Potential risks include ensuring cost-effectiveness and the long-term sustainability of such agreements. 4. The IT sector is not directly involved; this falls under transportation services.
Value Assessment
Rating: fair
The contract's value of $144.5 million over one year appears substantial. Benchmarking against similar large-scale air charter contracts is needed to assess if the pricing reflects fair market value and competitive pressures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a broad solicitation process. However, the effectiveness of this competition in driving down costs and ensuring the best value for taxpayers needs to be evaluated.
Taxpayer Impact: Taxpayer funds are utilized for essential air transportation services, with the expectation that competitive bidding ensures efficient use of these resources.
Public Impact
Ensures critical airlift capacity for national defense needs. Supports the operational readiness of the U.S. military. Provides economic activity for the contracted air carrier.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if not closely managed.
- Dependence on a single large carrier for critical services.
- Limited transparency on specific performance metrics.
Positive Signals
- Leverages established commercial air carrier infrastructure.
- Provides surge capacity during national emergencies.
- Utilizes a firm-fixed-price contract type.
Sector Analysis
This contract falls under the transportation sector, specifically air charter services. Benchmarks for similar large-scale government air transportation contracts are not readily available but would be crucial for a comprehensive value assessment.
Small Business Impact
The data indicates the contract was awarded to Federal Express Corporation, a large business. There is no explicit information suggesting significant subcontracting opportunities for small businesses within this specific contract.
Oversight & Accountability
Oversight is primarily managed by USTRANSCOM. Ensuring robust oversight is critical to monitor performance, manage costs, and verify that the services meet the government's requirements effectively.
Related Government Programs
- Nonscheduled Chartered Passenger Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Cost-effectiveness assessment needed.
- Potential for sole-source dependency in future.
- Limited small business participation.
- Transparency on performance metrics.
- Long-term strategic value unclear.
Tags
nonscheduled-chartered-passenger-air-tra, department-of-defense, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $144.5 million to FEDERAL EXPRESS CORPORATION. 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 $144.5 million.
What is the period of performance?
Start: 2012-10-01. End: 2013-09-30.
How does the pricing of this contract compare to historical government air charter agreements or commercial market rates for similar services?
A detailed comparison with historical government contracts and current commercial market rates for comparable air charter services is essential. Without this benchmark, it's difficult to definitively assess if the $144.5 million expenditure represents optimal value for the taxpayer. Factors like aircraft type, route, duration, and included services would need to be standardized for an accurate comparison.
What specific metrics are used to evaluate the performance and effectiveness of Federal Express Corporation under this contract?
Performance evaluation likely centers on on-time delivery, aircraft availability, safety compliance, and adherence to contractual terms. USTRANSCOM would typically have established Key Performance Indicators (KPIs) and reporting requirements. A review of these metrics and any documented performance issues or successes would provide insight into the contract's effectiveness and the carrier's reliability.
Given the full and open competition, what was the range of bids received, and what factors led to the selection of Federal Express Corporation?
Information on the bid range and the specific evaluation criteria used in the selection process is crucial. While 'full and open competition' implies multiple bidders, understanding the competitive landscape and the rationale behind awarding the contract to Federal Express Corporation is key to assessing the fairness and effectiveness of the procurement process.
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: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fedex Corp
Address: 2955 REPUBLICAN, 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: $144,508,436
Exercised Options: $144,508,436
Current Obligation: $144,508,436
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HTC71113DCC02
IDV Type: IDC
Timeline
Start Date: 2012-10-01
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2023-08-11
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