DoD's $52.1M Federal Express airlift contract delivered freight transportation services

Contract Overview

Contract Amount: $52,122,016 ($52.1M)

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: $142.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 32

Pricing Type: FIXED PRICE

Sector: Transportation

Official Description: CRAF AIRLIFT

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38118

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $52.1 million to FEDERAL EXPRESS CORPORATION for work described as: CRAF AIRLIFT Key points: 1. Contract value represents a significant investment in rapid cargo movement. 2. Competition dynamics suggest a potentially competitive bidding environment. 3. Performance context is crucial for assessing the effectiveness of airlift services. 4. Sector positioning highlights the critical role of air cargo in logistics. 5. Value for money is assessed by comparing costs to similar airlift operations.

Value Assessment

Rating: good

The contract's value of approximately $52.1 million for one year of service appears reasonable for specialized airlift operations. Benchmarking against similar Department of Defense (DoD) contracts for chartered freight air transportation would provide a clearer picture of value for money. Given the fixed-price nature, cost control is likely built into the agreement, but the specific per-unit cost of cargo moved is not detailed here.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. The presence of 32 bids suggests a robust competitive landscape, which generally benefits the government by driving down prices and encouraging innovation. The high number of bidders implies that Federal Express Corporation likely offered a competitive proposal.

Taxpayer Impact: A competitive bidding process for airlift services helps ensure that taxpayer dollars are used efficiently, securing the best possible price for essential transportation needs.

Public Impact

The Department of Defense benefits from reliable and rapid air cargo delivery. Services provided include nonscheduled chartered freight air transportation. The geographic impact is national, supporting military logistics across various locations. Workforce implications include support for pilots, ground crew, and logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in future contract renewals.
Dependence on a single contractor for critical airlift needs.
Ensuring consistent service quality and on-time delivery across all operations.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Fixed-price contract structure can provide cost certainty.
High number of bids suggests strong vendor interest and potential for good pricing.

Sector Analysis

The air transportation services sector is vital for global logistics and supply chains, particularly for government agencies requiring rapid and reliable movement of goods. This contract falls within the broader category of transportation and logistics services, a market characterized by significant investment in infrastructure and technology. Comparable spending benchmarks for similar airlift contracts within the DoD or other federal agencies would provide further context on the scale and pricing of this award.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Federal Express Corporation, as a large prime contractor, may engage small businesses as subcontractors, but the primary award was not directed towards small business participation. Further analysis would be needed to determine the extent of small business subcontracting opportunities generated by this contract.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of USTRANSCOM, responsible for managing the DoD's global transportation network. Accountability measures would include performance metrics, delivery schedules, and adherence to contractual terms. Transparency is generally maintained through contract award databases, though specific operational details may be sensitive.

Related Government Programs

Military Airlift Command
Air Mobility Command
Logistics Readiness Commands

Risk Flags

Contract duration
Performance metrics not specified
Lack of detailed cost breakdown

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.1 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 $52.1 million.

What is the period of performance?

Start: 2007-10-01. End: 2008-09-30.

What was the historical spending pattern for nonscheduled chartered freight air transportation by the Department of Defense prior to this contract?

Analyzing historical spending patterns for nonscheduled chartered freight air transportation by the Department of Defense prior to this contract (awarded in 2007) would reveal trends in demand, pricing, and contractor utilization. Without specific historical data, it's difficult to ascertain if the $52.1 million awarded to Federal Express Corporation in 2007-2008 represented an increase, decrease, or stable level of expenditure. Such analysis would typically involve reviewing previous contract awards for similar services, considering factors like inflation, changes in military operational tempo, and the evolution of air cargo capabilities. Understanding these patterns is crucial for assessing the long-term budgetary implications and strategic importance of such contracts.

How did the per-unit cost of cargo moved under this contract compare to other Federal Express contracts or similar government contracts?

Determining the precise per-unit cost of cargo moved under this specific contract is challenging without access to detailed delivery data (e.g., weight, volume, distance for each shipment). Federal Express Corporation, as a commercial entity, likely has internal metrics for cost per pound-mile or similar benchmarks. For comparison, government agencies often track cost per ton-mile or cost per shipment. If this contract was competitively bid, the pricing structure would have been evaluated against market rates. A comprehensive comparison would require access to the bid proposals and potentially post-award performance data, which are not publicly available. However, the fact that it was a full and open competition with 32 bids suggests the pricing was likely competitive within the market at the time.

What specific performance metrics were used to evaluate Federal Express Corporation's service delivery under this contract?

While the specific performance metrics are not detailed in the provided data, government contracts for airlift services typically include stringent performance standards. These often encompass on-time pickup and delivery rates, cargo condition upon arrival (damage/loss rates), flight schedule adherence, and compliance with safety and security regulations. For a contract of this nature, key performance indicators (KPIs) would likely have been established and monitored by USTRANSCOM. Failure to meet these metrics could result in penalties, reduced payment, or even contract termination. The fixed-price nature of the contract implies a focus on delivering the specified services within the agreed budget, with performance metrics ensuring the quality and reliability of those services.

What was the total value of Federal Express Corporation's contracts with the Department of Defense during the period 2007-2008?

To determine the total value of Federal Express Corporation's contracts with the Department of Defense during 2007-2008, one would need to access comprehensive federal procurement databases (like USASpending.gov or FPDS-NG) and filter for all contracts awarded to Federal Express Corporation by the DoD within that specific timeframe. This $52.1 million contract for nonscheduled chartered freight air transportation represents only one award. Federal Express likely holds numerous other contracts for various services, potentially including mail delivery, express package services, and other specialized transportation needs across different DoD components. A full accounting would require a detailed search and aggregation of all awarded contract values.

How does the duration of this contract (365 days) compare to typical durations for similar government airlift contracts?

A contract duration of 365 days, as seen in this award, is relatively common for service contracts, particularly those involving ongoing operational needs like freight air transportation. Many government service contracts are awarded for one base year with options for renewal, allowing for flexibility and periodic re-evaluation of requirements and pricing. Longer-term contracts (e.g., multi-year) might be used for more stable, predictable requirements, while shorter durations can be employed when needs are more dynamic or when market conditions warrant frequent re-competition. For airlift services, a one-year term provides a balance, ensuring service continuity while allowing the agency to adapt to changing logistical demands or market shifts.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight 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: 32

Pricing Type: 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, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $52,122,016

Exercised Options: $52,122,016

Current Obligation: $52,122,016

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71107D0021

IDV Type: IDC

Timeline