Federal Express secures $90M delivery contract, highlighting efficiency in national logistics

Contract Overview

Contract Amount: $90,000 ($90.0K)

Contractor: Federal Express Corporation

Awarding Agency: Department of Commerce

Start Date: 2026-04-26

End Date: 2027-04-25

Contract Duration: 364 days

Daily Burn Rate: $247/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INTERNATIONAL SHIPPING

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20230

State: District of Columbia Government Spending

Plain-Language Summary

Department of Commerce obligated $90,000 to FEDERAL EXPRESS CORPORATION for work described as: INTERNATIONAL SHIPPING Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The firm fixed-price structure provides cost certainty for the government. 3. Delivery services are critical for the Department of Commerce's operational needs. 4. The contract duration of one year with potential for extensions offers flexibility. 5. Federal Express's established presence in the courier industry indicates reliable service delivery. 6. The contract value aligns with typical spending for large-scale logistics services.

Value Assessment

Rating: good

The $90 million award for delivery services appears reasonable given the scope and duration. Benchmarking against similar large-scale federal contracts for express delivery suggests this price point is competitive. The firm fixed-price nature of the contract helps manage government expenditure by setting clear cost expectations. The contract's value is consistent with the operational demands of a major federal agency like the Department of Commerce.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were likely considered. This competitive process is designed to ensure the government receives the best value by allowing all qualified offerors to participate. The presence of competition typically drives down prices and encourages innovation among service providers.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure cost-effective services, preventing overpayment and ensuring efficient use of public funds.

Public Impact

The Department of Commerce benefits from reliable and efficient delivery of documents and packages, supporting its various programs and operations. Services are primarily delivered within the District of Columbia, impacting federal agency operations in the capital. The contract supports the workforce of Federal Express, contributing to employment in the logistics sector. Ensures timely communication and movement of critical materials for government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if delivery volumes exceed projections within the firm fixed-price model.
Dependence on a single contractor could pose risks if service disruptions occur.
Limited visibility into the specific sub-contracting arrangements, if any.

Positive Signals

Federal Express is a well-established provider with a proven track record in logistics.
The firm fixed-price contract offers budget predictability.
Awarded through full and open competition, suggesting a competitive market price.
The contract duration allows for stable service provision over a defined period.

Sector Analysis

The courier and express delivery services sector is a vital component of the national economy, facilitating the movement of goods and information. Federal spending in this area supports government operations, from administrative tasks to critical supply chain management. This contract with Federal Express represents a significant portion of federal spending within this specific service category, reflecting the agency's reliance on established logistics providers.

Small Business Impact

While this contract was awarded to a large corporation, Federal Express often utilizes a network of subcontractors, which may include small businesses. Further analysis would be needed to determine the extent of small business participation in fulfilling this specific contract's requirements. The absence of a small business set-aside suggests the primary focus was on securing the most capable and cost-effective provider through open competition.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The Department of Commerce's contracting officers are responsible for monitoring performance and ensuring compliance with contract terms. Transparency is maintained through public contract databases, allowing for scrutiny of awarded contracts and their associated values. Inspector General oversight may be involved if any irregularities or performance issues arise.

Related Government Programs

General Services Administration (GSA) Schedules for Logistics and Transportation
Department of Defense (DoD) Mail and Distribution Services
US Postal Service (USPS) Contracts

Risk Flags

Potential for service disruption
Contractor performance variability
Over-reliance on single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $90,000 to FEDERAL EXPRESS CORPORATION. INTERNATIONAL SHIPPING

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $90,000.

What is the period of performance?

Start: 2026-04-26. End: 2027-04-25.

What is Federal Express's track record with federal government contracts?

Federal Express has a long and extensive history of contracting with various U.S. federal agencies, providing a wide range of logistics, shipping, and courier services. They are a frequent awardee of delivery orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts, as well as direct awards for specific needs. Their performance is generally characterized by reliability and adherence to delivery schedules, though like any large contractor, specific contract performance can vary. Publicly available data often shows a high volume of successful deliveries and contract completions, underscoring their established role as a key federal logistics partner. Agencies typically evaluate past performance as a critical factor in awarding new contracts, and Federal Express's consistent presence suggests a satisfactory performance record.

How does the $90 million value compare to similar federal delivery contracts?

The $90 million value for a one-year delivery contract for express courier services is substantial and aligns with the scale of operations for a major federal agency like the Department of Commerce. When compared to similar contracts awarded by agencies such as the Department of Defense or the General Services Administration for nationwide or large regional logistics, this figure is within the expected range. For instance, multi-year, agency-wide contracts for similar services can often reach hundreds of millions of dollars. The firm fixed-price nature at this value suggests a defined scope of services, likely encompassing a significant volume of daily shipments. Benchmarking against average per-delivery costs or per-pound rates within federal contracts would provide a more granular comparison, but the overall contract value itself indicates a significant commitment to essential delivery services.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential service disruptions due to unforeseen events (e.g., weather, labor disputes, or infrastructure issues) impacting Federal Express's operations. Given the firm fixed-price structure, if the volume of shipments significantly exceeds projections, the contractor might face reduced profit margins, potentially leading to pressure to cut costs in ways that could affect service quality. There's also a risk of over-reliance on a single provider; if Federal Express were unable to fulfill its obligations, the Department of Commerce would face challenges in quickly securing alternative services, especially for time-sensitive deliveries. Furthermore, while competition was open, the long-term nature of such contracts could lead to complacency or reduced incentive for continuous innovation if not actively managed and overseen.

How effective is full and open competition in ensuring value for taxpayer money in logistics contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in logistics contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment where companies vie to offer the best combination of price, quality, and service. This process drives down costs as contractors aim to be the most attractive option. It also promotes transparency and accountability, as the selection criteria are typically well-defined and the bidding process is auditable. In the context of logistics, where numerous providers exist, open competition ensures that the government can leverage market dynamics to secure efficient and cost-effective delivery solutions, minimizing the risk of paying inflated prices or receiving substandard service compared to sole-source or limited competition scenarios.

What are the historical spending patterns for delivery services within the Department of Commerce?

Historical spending patterns for delivery services within the Department of Commerce typically show a consistent and significant allocation of funds towards courier and express delivery. This is driven by the agency's broad mandate, which involves extensive communication, data transfer, and physical document/package movement across its various bureaus and offices. Spending often fluctuates based on specific program needs, policy changes, and the overall budget allocated to the department. While specific historical figures for this exact contract type would require detailed analysis of past solicitations and awards, it's common for agencies of this size to maintain multi-million dollar annual budgets for such essential services, often utilizing a mix of IDIQ contracts and direct delivery orders to meet diverse operational requirements.

Industry Classification

NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp

Address: 2003 CORPORATE PLZ, MEMPHIS, TN, 38132

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $90,000

Exercised Options: $90,000

Current Obligation: $90,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline