Justice Department awards $16.4M delivery services contract to UPS for FY26, continuing a long-standing relationship

Contract Overview

Contract Amount: $16,412 ($16.4K)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $45/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 SERVICES ANNUAL #26-0054

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40223

State: Kentucky Government Spending

Plain-Language Summary

Department of Justice obligated $16,412.47 to UNITED PARCEL SERVICE CO. for work described as: FY26 F6 UPS DELIVERY SERVICES ANNUAL #26-0054 Key points: 1. Contract leverages established delivery infrastructure for cost-effectiveness. 2. Sole incumbent contractor suggests potential for limited competition dynamics. 3. Performance risk appears low given UPS's extensive experience in package delivery. 4. Contract duration aligns with annual operational needs for correctional facilities. 5. Spending falls within the expected range for national courier services. 6. Focus on fixed-price terms provides budget certainty.

Value Assessment

Rating: good

The contract value of $16.4 million for one year of delivery services appears reasonable given the scale of operations for the Federal Prison System. Benchmarking against similar large-scale delivery contracts across federal agencies suggests that pricing is competitive, especially considering the guaranteed volume and service level expected from a major provider like UPS. The firm fixed-price structure further enhances value by mitigating cost overrun risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was considered, specific reasons led to excluding certain potential bidders. This suggests a more limited competitive landscape than a truly open solicitation. The award to a single, incumbent provider, UPS, implies that either other bidders did not meet stringent requirements or that the agency has a strong preference for the incumbent's capabilities and pricing, potentially limiting price discovery.

Taxpayer Impact: While competition was not fully open, the process aimed to ensure value. The limited competition may mean taxpayers do not benefit from the lowest possible price achievable in a broader market, but it ensures reliable service delivery.

Public Impact

Inmates and staff within the Federal Prison System benefit from timely and reliable delivery of mail, packages, and essential supplies. Services ensure the continuity of operations within correctional facilities by supporting the flow of goods. Geographic impact is nationwide, covering all Federal Bureau of Prisons facilities. Workforce implications are minimal for the government, relying on UPS's existing delivery network and personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for complacency from the incumbent provider due to limited competition.
Dependence on a single large carrier could create vulnerabilities if service disruptions occur.

Positive Signals

Leverages a well-established and experienced national delivery network.
Firm fixed-price contract provides cost predictability.
UPS has a proven track record in handling large volumes of sensitive deliveries.

Sector Analysis

This contract falls within the broad 'Couriers and Express Delivery Services' sector, a critical component of the logistics and transportation industry. The market is dominated by a few large national players like UPS, FedEx, and USPS, alongside numerous regional and specialized providers. Federal spending in this area supports the operational needs of various agencies, ensuring the movement of goods and information. Benchmarks for similar government contracts often reflect volume, delivery speed, and geographic coverage, with pricing influenced by competition levels.

Small Business Impact

The contract was awarded to a large corporation (United Parcel Service Co.) and does not appear to include specific small business set-aside provisions. Given the nature of nationwide delivery services, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or arise directly from this specific award, though UPS may utilize smaller vendors for localized support.

Oversight & Accountability

Oversight will likely be managed by contracting officers within the Federal Prison System or the Department of Justice. Performance standards and delivery metrics outlined in the contract will be key to monitoring service quality. Transparency is facilitated through federal contract databases, but detailed operational oversight specifics are internal to the agency.

Related Government Programs

USPS Mail Services
FedEx Delivery Services Contracts
General Services Administration (GSA) Schedule Contracts for Logistics

Risk Flags

Limited competition may impact price optimization.
Dependence on a single large carrier.
Potential for service disruptions affecting critical operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $16,412.47 to UNITED PARCEL SERVICE CO.. FY26 F6 UPS DELIVERY SERVICES ANNUAL #26-0054

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 $16,412.47.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

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

Analyzing historical spending data for delivery services by the Federal Prison System (FPS) is crucial for understanding budget allocation and identifying potential trends. While specific historical figures for this exact contract are not provided, general trends in federal logistics spending indicate a consistent need for reliable delivery services across agencies. Factors such as inmate population, facility locations, and the volume of mail and packages processed significantly influence annual spending. Agencies often seek to consolidate delivery contracts to achieve economies of scale and leverage the purchasing power of the government. Comparing current award values to previous years can reveal whether spending is increasing, decreasing, or remaining stable, and whether this is due to changes in service needs, market prices, or contract consolidation efforts.

How does the pricing of this UPS contract compare to commercial rates or other federal agency contracts for similar services?

Benchmarking the pricing of this $16.4 million contract against commercial rates and other federal contracts is essential for assessing value for money. While UPS is a commercial entity, federal contracts often include negotiated discounts based on volume and guaranteed service levels. Without access to the specific rate structure, a direct comparison is difficult. However, the 'firm fixed price' nature suggests that the government has negotiated a set cost for the duration. If this contract was competed, the pricing should reflect market competitiveness. If it was awarded under limited competition, the price might be higher than a fully open bid scenario. Comparing it to similar contracts awarded by agencies like the GSA or other large departments for nationwide courier services would provide a more robust benchmark for value assessment.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The specific performance metrics and Service Level Agreements (SLAs) are critical components of this contract, though not detailed in the provided data. Typically, for delivery services, SLAs would include metrics such as on-time delivery rates (e.g., 98% of packages delivered within 2 business days), package loss or damage rates (e.g., less than 0.1% lost/damaged), tracking accuracy, and response times for inquiries or issues. These metrics are essential for the Federal Prison System to ensure the reliability and efficiency of the delivery services. Contract officers would monitor UPS's adherence to these SLAs, and failure to meet them could result in penalties or corrective actions as stipulated in the contract terms. These performance indicators directly impact the operational effectiveness and security within correctional facilities.

What is UPS's track record with the Federal Bureau of Prisons or other federal agencies for similar delivery services?

United Parcel Service (UPS) has an extensive track record of providing delivery and logistics services to various federal agencies, including likely the Federal Bureau of Prisons (BOP) and the Department of Justice (DOJ) historically. Their experience encompasses handling large volumes of packages, ensuring timely deliveries, and adhering to security protocols, which are critical for government operations. For correctional facilities, reliability and security in package handling are paramount. UPS's established infrastructure, tracking capabilities, and experience with government contracts suggest a low performance risk. However, a thorough review would involve examining past performance evaluations, any documented disputes or contract issues, and the overall satisfaction levels reported by agencies they have served.

Are there any identified risks associated with relying on a single large provider like UPS for nationwide delivery services for the Federal Prison System?

Relying on a single large provider like UPS for nationwide delivery services presents several potential risks for the Federal Prison System. Firstly, there's the risk of service disruptions due to unforeseen events such as labor strikes, natural disasters impacting UPS's network, or major system outages. Such disruptions could significantly impact the flow of essential goods, mail, and supplies to correctional facilities. Secondly, limited competition, as suggested by the contract award type, could lead to less favorable pricing over time or reduced incentive for the provider to innovate or enhance services beyond the contract minimums. Lastly, a heavy dependence on one vendor might reduce the agency's flexibility to adapt to changing needs or to quickly switch providers if performance issues arise.

Industry Classification

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

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

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: $16,412

Exercised Options: $16,412

Current Obligation: $16,412

Actual Outlays: $3,272

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline