DOJ's $6.35M UPS Delivery Contract for Federal Prisons Leverages Firm Fixed Price for Predictable Costs

Contract Overview

Contract Amount: $6,352 ($6.4K)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-04-07

Contract Duration: 188 days

Daily Burn Rate: $34/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: FY26 F6 UPS DELIVERY SVCS Q1 + JAN

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40223

State: Kentucky Government Spending

Plain-Language Summary

Department of Justice obligated $6,352.44 to UNITED PARCEL SERVICE CO. for work described as: FY26 F6 UPS DELIVERY SVCS Q1 + JAN Key points: 1. The contract utilizes a firm fixed-price structure, which is advantageous for budget predictability and cost control. 2. Full and open competition was employed, suggesting a robust market and potential for competitive pricing. 3. The contract duration of 188 days indicates a short-term need, potentially for specific operational periods. 4. The service falls under the 'Couriers and Express Delivery Services' NAICS code, a common and essential government function. 5. The award to United Parcel Service Co. indicates reliance on established, large-scale logistics providers for critical services. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a pre-negotiated agreement.

Value Assessment

Rating: good

The firm fixed-price contract type is generally favorable for the government, locking in costs and mitigating risk of cost overruns. Benchmarking against similar delivery service contracts for federal agencies would provide a clearer picture of value for money. Given the reliance on a major carrier like UPS, the pricing is likely competitive within the industry, but specific per-unit cost analysis would be needed for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the government actively sought bids from all qualified sources after initially excluding some. This suggests a competitive process aimed at achieving the best value. The specific number of bidders is not provided, but the 'full and open' nature implies multiple potential offerors participated.

Taxpayer Impact: This competitive approach is beneficial for taxpayers as it drives down prices through market forces and ensures the government is not overpaying for essential delivery services.

Public Impact

Inmates and staff within the Federal Prison System will benefit from reliable and timely delivery of mail, packages, and supplies. Essential services supporting the operational needs of correctional facilities across the Federal Prison System are delivered. The geographic impact is primarily within the operational areas served by the Federal Prison System, likely nationwide. The contract supports the logistics and delivery workforce employed by United Parcel Service.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition dynamics shift.
Dependence on a single large provider could limit flexibility in service customization or rapid scaling if needs change drastically.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a well-established carrier like UPS suggests reliability and established service infrastructure.
Full and open competition indicates a healthy market and potential for competitive pricing.

Sector Analysis

The couriers and express delivery services sector is a critical component of the broader logistics and transportation industry. Government agencies, including law enforcement and correctional facilities, rely heavily on these services for the movement of documents, equipment, and supplies. Spending in this sector is consistent across federal agencies, with significant annual outlays for mail, package delivery, and specialized courier services. This contract represents a small but essential portion of the government's overall logistics expenditure.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While UPS is a large corporation, the nature of delivery services often involves a complex subcontracting ecosystem. It is possible that smaller, local delivery partners or specialized couriers could be utilized by UPS for specific legs of delivery, though this is not explicitly stated in the award details. The absence of a small business set-aside suggests the primary award was made to a large business based on capability and price.

Oversight & Accountability

The Federal Prison System, under the Department of Justice, is responsible for overseeing this contract. Oversight likely involves performance monitoring, ensuring timely deliveries, and adherence to contract terms. Accountability is managed through the contract's performance clauses and payment structure. Transparency is facilitated by public contract databases where award details are recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to this contract.

Related Government Programs

General Services Administration (GSA) Schedules for Logistics and Transportation
Department of Defense Mail and Distribution Services
US Postal Service Contracts
Federal Express (FedEx) Delivery Contracts

Risk Flags

Potential for service disruption impacting critical operations.
Risk of price escalation in future contract renewals due to limited competition.
Dependence on a single large contractor may reduce flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $6,352.44 to UNITED PARCEL SERVICE CO.. FY26 F6 UPS DELIVERY SVCS Q1 + JAN

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $6,352.44.

What is the period of performance?

Start: 2025-10-01. End: 2026-04-07.

What is the historical spending pattern for delivery services by the Federal Prison System?

Analyzing historical spending for delivery services by the Federal Prison System requires accessing detailed procurement data over multiple fiscal years. Typically, agencies like the Federal Prison System utilize a mix of contract vehicles, including GSA Schedules, IDIQs, and direct awards for courier and express delivery services. Spending can fluctuate based on operational needs, inmate population changes, and the specific requirements for transporting sensitive materials or supplies. A review of past contracts would reveal trends in service providers, contract types (e.g., firm-fixed-price vs. cost-plus), and average award values. For instance, if the system has consistently relied on major carriers like UPS or FedEx, it suggests a preference for established infrastructure and reliability, potentially at a premium compared to smaller, niche providers. Understanding these patterns helps contextualize the current $6.35M award and assess its alignment with historical expenditure levels and strategic sourcing initiatives.

How does the per-unit cost of this contract compare to similar federal delivery contracts?

A precise per-unit cost comparison for this specific UPS delivery contract is challenging without granular data on the volume and types of deliveries (e.g., package size, weight, destination, speed). The contract value of $6.35M covers a period of 188 days for the Federal Prison System. To benchmark effectively, one would need to identify comparable contracts awarded by agencies with similar logistical needs, ideally within the same NAICS code (492110). Key metrics for comparison would include cost per package, cost per pound, or cost per mile, depending on the contract's primary focus. If this contract is for general mail and package delivery, comparing its average cost per delivery against other federal contracts for similar services would be appropriate. A higher or lower per-unit cost could indicate differences in service levels, geographic scope, competition intensity, or efficiency. Without specific per-unit data, the assessment remains qualitative, relying on the general understanding that firm-fixed-price contracts with major carriers aim for competitive, albeit potentially higher, rates due to scale and reliability.

What are the key performance indicators (KPIs) used to evaluate UPS's performance under this contract?

While the specific Key Performance Indicators (KPIs) for this particular delivery services contract are not detailed in the provided data, federal contracts typically include performance standards that the contractor must meet. For courier and express delivery services, common KPIs often revolve around on-time delivery rates, package condition upon arrival (minimizing damage or loss), tracking accuracy, and responsiveness to service issues or inquiries. The contract likely specifies acceptable thresholds for these metrics, such as requiring 95% of packages to be delivered within the contracted timeframe. Failure to meet these KPIs can result in penalties, reduced payments, or even contract termination. The Department of Justice's Federal Prison System would be responsible for monitoring these performance metrics and ensuring UPS adheres to the agreed-upon service levels throughout the contract duration.

What is the track record of United Parcel Service Co. (UPS) in fulfilling federal government contracts?

United Parcel Service Co. (UPS) has a long and extensive history of fulfilling contracts with various U.S. federal government agencies. As a major global logistics provider, UPS regularly competes for and wins contracts related to package delivery, expedited shipping, and supply chain management across departments such as Defense, Health and Human Services, and agencies like the General Services Administration (GSA). Their track record generally indicates a capacity to handle large volumes and complex logistical requirements, often leveraging their established network and technological infrastructure. Government contract databases often show numerous awards to UPS, reflecting their significant presence in the federal contracting space. While specific performance details for each contract vary, UPS's continued success in securing federal business suggests a generally positive performance history and a strong understanding of government procurement requirements and service expectations.

What are the potential risks associated with relying on a single large provider like UPS for essential prison system deliveries?

Relying on a single large provider like UPS for essential prison system deliveries presents several potential risks. Firstly, there's a risk of service disruptions due to unforeseen events affecting UPS's operations, such as labor strikes, severe weather, or logistical network failures. Such disruptions could impact the timely delivery of critical supplies, mail, or equipment to correctional facilities, potentially affecting operations and staff/inmate welfare. Secondly, a lack of robust competition for future contract renewals could lead to price increases, as the incumbent provider may have significant leverage. Thirdly, over-reliance on one provider might limit the government's flexibility to adapt to rapidly changing needs or to integrate innovative, potentially more cost-effective solutions offered by smaller or specialized logistics firms. Finally, any significant performance issues or compliance failures by UPS could have a widespread impact across the entire Federal Prison System due to the scale of their operations.

Industry Classification

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

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

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

Address: 1400 N HURSTBOURNE PKWY, LOUISVILLE, KY, 40223

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

Financial Breakdown

Contract Ceiling: $6,352

Exercised Options: $6,352

Current Obligation: $6,352

Actual Outlays: $5,976

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline