DoD's $52.5M Federal Express Contract for Air Cargo Transportation

Contract Overview

Contract Amount: $52,493,236 ($52.5M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Defense

Start Date: 2008-03-27

End Date: 2008-09-30

Contract Duration: 187 days

Daily Burn Rate: $280.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE

Sector: Transportation

Official Description: CHANNEL CARGO

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38118

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $52.5 million to FEDERAL EXPRESS CORPORATION for work described as: CHANNEL CARGO Key points: 1. Contract awarded to Federal Express Corporation for air cargo services. 2. The contract value is substantial at over $52 million. 3. Competition method was 'Full and Open', suggesting a competitive bidding process. 4. The sector is transportation, specifically air freight. 5. The contract duration is relatively short, spanning 187 days.

Value Assessment

Rating: fair

The contract value of $52.5 million for 187 days of service is difficult to benchmark without specific performance metrics. However, the fixed-price nature suggests a defined scope, and the 'Full and Open' competition implies a degree of price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition', indicating that all responsible sources were permitted to submit a bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: Taxpayer funds are utilized for this contract. The competitive nature of the award aims to ensure efficient use of these funds for essential transportation services.

Public Impact

Ensures timely delivery of critical cargo for the Department of Defense. Supports military operations by providing essential logistical support. Federal Express's involvement highlights the reliance on private sector logistics for government needs. The contract's fixed-price structure provides cost certainty for the government.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration may limit long-term planning and potential for economies of scale.
Fixed-price contract could lead to cost overruns if unforeseen issues arise.
Reliance on a single carrier, even with open competition, can pose supply chain risks.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Fixed-price contract provides budget predictability.
Utilizes a well-established logistics provider (Federal Express).

Sector Analysis

This contract falls within the transportation sector, specifically air freight services. Government spending in this area is crucial for logistical support of various agencies, particularly defense. Benchmarks for similar large-scale air cargo contracts would typically consider volume, distance, and urgency of delivery.

Small Business Impact

The data indicates the prime contractor is Federal Express Corporation. There is no explicit information provided regarding subcontracting opportunities for small businesses within this specific contract award.

Oversight & Accountability

The contract was awarded under 'Full and Open Competition', suggesting a structured procurement process. Oversight would typically involve monitoring delivery performance and adherence to contract terms by USTRANSCOM.

Related Government Programs

Nonscheduled Chartered Freight Air Transportation
Department of Defense Contracting
USTRANSCOM Programs

Risk Flags

Potential for cost overruns in fixed-price contracts if scope changes or unforeseen issues arise.
Dependence on a single carrier could create vulnerabilities in the supply chain.
Short contract duration may not allow for optimal resource utilization or long-term cost savings.
Lack of specific cargo details makes a precise value assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.5 million to FEDERAL EXPRESS CORPORATION. CHANNEL 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 $52.5 million.

What is the period of performance?

Start: 2008-03-27. End: 2008-09-30.

What was the specific nature of the cargo being transported, and did its classification influence the contract's value or urgency?

The data specifies 'CHANNEL CARGO' and 'Nonscheduled Chartered Freight Air Transportation' but lacks details on the cargo's nature. If the cargo was high-value, sensitive, or time-critical military equipment, it could justify the $52.5 million cost and the use of a chartered service. Further information on cargo type is needed for a complete value assessment.

How does the per-day cost of this contract compare to industry benchmarks for similar chartered air freight services, considering the carrier and potential cargo type?

The contract averages approximately $280,712 per day ($52,493,236 / 187 days). Benchmarking this requires detailed knowledge of cargo weight, volume, destination, and urgency. However, for specialized, rapid, or secure air freight, this daily rate could be within market norms, especially for a large carrier like Federal Express.

What mechanisms were in place to ensure the effectiveness and efficiency of the air transportation services provided by Federal Express under this contract?

Effectiveness and efficiency would likely be monitored through performance metrics outlined in the contract, such as on-time delivery rates, cargo condition upon arrival, and adherence to flight schedules. USTRANSCOM would be responsible for tracking these metrics and addressing any performance deficiencies to ensure mission requirements were met.

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: 4

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: $52,493,236

Exercised Options: $52,493,236

Current Obligation: $52,493,236

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71107D0021

IDV Type: IDC

Timeline