DoD's $74M quarterly cargo missions contract with FedEx shows strong performance

Contract Overview

Contract Amount: $74,233,165 ($74.2M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Defense

Start Date: 2008-06-30

End Date: 2008-09-30

Contract Duration: 92 days

Daily Burn Rate: $806.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIXED PRICE

Sector: Transportation

Official Description: QUARTERLY CARGO MISSIONS

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38118

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $74.2 million to FEDERAL EXPRESS CORPORATION for work described as: QUARTERLY CARGO MISSIONS Key points: 1. FedEx secured a significant portion of DoD's air cargo needs. 2. The contract value indicates substantial demand for rapid freight. 3. Fixed-price contracts can offer cost certainty for the government. 4. This highlights the critical role of private carriers in military logistics.

Value Assessment

Rating: good

The contract value of $74.2 million for a single quarter suggests a substantial volume of services. Benchmarking against similar large-scale air cargo contracts would be necessary for a precise value assessment, but the scale itself implies significant utility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method is expected to yield fair market prices and encourage multiple vendors to offer their services.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment.

Public Impact

Ensures timely delivery of critical supplies and equipment for military operations. Supports global reach and rapid deployment capabilities for the DoD. Provides economic activity through transportation services.

Waste & Efficiency Indicators

Waste Risk Score: 80 / 10

Positive Signals

Full and open competition
Significant contract value indicating demand
Fixed price contract type

Sector Analysis

This contract falls within the transportation and logistics sector, specifically air freight. Spending in this area is crucial for maintaining military readiness and global operational capabilities, with benchmarks often tied to fuel costs and aircraft utilization.

Small Business Impact

The data does not indicate any specific set-aside for small businesses. Large contracts like this are often dominated by major carriers, potentially limiting opportunities for smaller freight providers.

Oversight & Accountability

USTRANSCOM is responsible for managing and overseeing this contract, ensuring that the terms are met and that services are delivered effectively. Performance metrics and regular reviews are key oversight mechanisms.

Related Government Programs

Nonscheduled Chartered Freight Air Transportation
Department of Defense Contracting
USTRANSCOM Programs

Risk Flags

Potential over-reliance on a single carrier
Lack of specific performance metrics in provided data
No indication of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.2 million to FEDERAL EXPRESS CORPORATION. QUARTERLY CARGO MISSIONS

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 $74.2 million.

What is the period of performance?

Start: 2008-06-30. End: 2008-09-30.

What is the average cost per pound or ton for the cargo transported under this contract, and how does it compare to industry benchmarks?

The provided data does not include weight or volume metrics, making it impossible to calculate a cost per pound or ton. To assess value, this information would be crucial. Comparing it to industry benchmarks for similar military or commercial cargo would reveal if the government is receiving a competitive rate for the services rendered.

What are the potential risks associated with relying heavily on a single carrier like FedEx for critical quarterly cargo missions?

Over-reliance on a single carrier poses risks such as service disruptions due to unforeseen events (e.g., labor strikes, natural disasters, or carrier financial instability). It could also lead to reduced negotiating power for future contracts and potentially higher costs if competition diminishes. Contingency plans and alternative carrier options are vital.

How effectively does this contract support the Department of Defense's mission readiness and rapid deployment capabilities?

The substantial value and quarterly nature of these missions suggest a high level of support for DoD's logistical needs, likely contributing significantly to readiness and deployment. The use of a major carrier like FedEx implies a focus on reliability and speed, essential for operational effectiveness. Further analysis of delivery times and mission success rates would confirm this.

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: 8

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: $74,233,165

Exercised Options: $74,233,165

Current Obligation: $74,233,165

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71107D0021

IDV Type: IDC

Timeline