DOJ's $10M UPS contract for inmate package delivery to leverage firm fixed price for FY26

Contract Overview

Contract Amount: $10,000 ($10.0K)

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: $27/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: OBLIGATION FOR UPS FY26 - TRANSPORTATION OF INMATE PACKAGES PROJECT 21L

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40223

State: Kentucky Government Spending

Plain-Language Summary

Department of Justice obligated $10,000 to UNITED PARCEL SERVICE CO. for work described as: OBLIGATION FOR UPS FY26 - TRANSPORTATION OF INMATE PACKAGES PROJECT 21L Key points: 1. Contract leverages a firm fixed price structure, offering cost predictability for the Bureau of Prisons. 2. Competition was full and open after exclusion of sources, indicating a deliberate selection process. 3. The contract duration of 364 days aligns with annual operational needs for package delivery. 4. Delivery orders suggest flexibility in service provision within the established contract. 5. The primary service category, 'Couriers and Express Delivery Services,' is a core function for logistical support. 6. Geographic focus on Kentucky (KY) suggests a specific regional need for inmate package transportation.

Value Assessment

Rating: good

The obligation amount of $10 million for a 364-day delivery order appears reasonable for nationwide package delivery services, especially considering the specialized nature of inmate package handling. Benchmarking against similar contracts for courier services, particularly those involving government agencies, would provide a clearer picture of value. However, the firm fixed-price nature suggests that the government has negotiated a set price, which can be advantageous in controlling costs. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging, but the price point seems aligned with industry standards for such services.

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.' This indicates that while the competition was intended to be broad, certain sources may have been excluded based on specific criteria, possibly related to security, capability, or prior performance. The number of bidders (3) is relatively low for a full and open competition, which could suggest either a highly specialized service requirement or potential barriers to entry for other qualified vendors. This level of competition might lead to a price that is competitive but not necessarily the absolute lowest possible.

Taxpayer Impact: A competitive bidding process, even with exclusions, generally benefits taxpayers by encouraging vendors to offer competitive pricing. The fact that three bids were received suggests that the price obtained is likely a fair market value, preventing excessive spending.

Public Impact

Inmates within the Federal Prison System will benefit from the reliable and timely delivery of packages. The services delivered include the transportation and express delivery of packages, crucial for maintaining connections between inmates and their families or legal representatives. The geographic impact is primarily focused on Kentucky (KY), indicating a specific operational need within that region. Workforce implications include employment opportunities within United Parcel Service (UPS) for delivery personnel and support staff involved in this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased delivery costs if fuel prices or operational expenses rise significantly beyond UPS's projections.
Security risks associated with handling inmate packages, requiring stringent protocols to prevent contraband.
Dependence on a single large provider (UPS) could limit flexibility if unforeseen service disruptions occur.

Positive Signals

Leveraging a well-established and experienced logistics provider like UPS ensures reliable service delivery.
The firm fixed-price contract provides budget certainty for the Bureau of Prisons.
The use of delivery orders allows for adaptable service scaling based on actual needs.

Sector Analysis

The contract falls within the 'Couriers and Express Delivery Services' sector, a critical component of the broader logistics and transportation industry. This sector is characterized by high volume, time-sensitive deliveries, and significant infrastructure investment. The market is dominated by large players like UPS, FedEx, and DHL, alongside numerous smaller regional and specialized providers. Government contracts for these services are common, supporting various agency needs from mail delivery to specialized cargo transport. The estimated obligation of $10 million for a single delivery order suggests a substantial volume of packages or a significant service area within this contract.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). United Parcel Service (UPS) is a large corporation, and therefore, this contract is unlikely to involve direct subcontracting opportunities for small businesses unless UPS opts to engage them for specific, localized services not covered by their core operations. The primary impact is on the large business ecosystem within the express delivery market.

Oversight & Accountability

Oversight for this contract will likely be managed by the Bureau of Prisons (BOP) within the Department of Justice. The BOP typically has contracting officers and program managers responsible for monitoring performance, ensuring compliance with terms and conditions, and approving delivery orders. Transparency is facilitated through contract databases like FPDS. Accountability measures are embedded in the firm fixed-price contract, where UPS is obligated to perform services as specified. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

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

Risk Flags

Potential security risks associated with inmate package handling.
Limited number of bidders in a 'Full and Open Competition After Exclusion of Sources' scenario.
Dependence on a single large carrier for critical logistical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $10,000 to UNITED PARCEL SERVICE CO.. OBLIGATION FOR UPS FY26 - TRANSPORTATION OF INMATE PACKAGES PROJECT 21L

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 $10,000.

What is the period of performance?

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

What is the historical spending pattern for inmate package delivery services by the Bureau of Prisons?

Analyzing historical spending for inmate package delivery by the Bureau of Prisons (BOP) is crucial for context. While specific data for 'inmate package delivery' as a distinct category is not readily available in summary form, the BOP's overall transportation and logistics spending provides a benchmark. In recent fiscal years, the BOP has obligated significant sums towards various services, including inmate transportation, facility maintenance, and operational supplies. For instance, in FY2023, the BOP obligated over $200 million in various service contracts. Understanding the trend of these obligations, whether increasing or decreasing, and how this $10 million UPS contract fits within that trend, would reveal if this represents a new initiative, an expansion of existing services, or a routine procurement. Without historical data specific to inmate package delivery, it's difficult to ascertain if this $10 million obligation is an anomaly or a consistent expenditure level.

How does the pricing of this UPS contract compare to other federal courier service contracts?

Comparing the pricing of this United Parcel Service (UPS) contract to other federal courier service contracts requires access to detailed pricing structures and service level agreements for comparable contracts. This contract is a firm fixed-price delivery order with an obligation of $10 million for a 364-day period. To benchmark effectively, one would need to identify contracts with similar scope, volume, geographic coverage, and service requirements (e.g., express delivery, package handling, security protocols for inmate-related items). For example, contracts awarded under GSA's Multiple Award Schedule (MAS) for transportation and logistics services often provide a basis for comparison. If other agencies are procuring similar services at a lower per-package rate or a lower overall cost for comparable volumes, it could indicate that this UPS contract's pricing is not optimal. Conversely, if the specialized nature of inmate package handling necessitates higher security and handling costs, the price might be justified. Without specific comparative data, a definitive pricing assessment is challenging.

What are the specific risks associated with contracting with UPS for inmate package delivery?

Contracting with UPS for inmate package delivery presents several specific risks. Firstly, security is paramount; any lapse in the handling or screening of packages could lead to the introduction of contraband into correctional facilities, posing significant safety and security risks. UPS, as a commercial entity, must adhere to stringent government-mandated security protocols, and ensuring consistent compliance across all delivery points is a challenge. Secondly, there's a risk of service disruptions. While UPS is a reliable carrier, unforeseen events like labor disputes, severe weather, or logistical failures could impact delivery timelines, potentially affecting inmate welfare or legal processes. Thirdly, the concentration of this service with a single large provider like UPS could limit the government's leverage in future negotiations or during service issues. Finally, the potential for price increases in future contract renewals, especially if competition is limited, is a long-term financial risk.

What performance metrics are being used to evaluate UPS's delivery of inmate packages?

The provided data does not explicitly detail the performance metrics used to evaluate UPS's delivery of inmate packages under this contract. Typically, government contracts of this nature would include Key Performance Indicators (KPIs) related to on-time delivery rates, package condition upon arrival, accuracy of delivery, and compliance with security screening procedures. For inmate-related services, metrics might also include adherence to specific chain-of-custody protocols and reporting requirements. The effectiveness of the contract hinges on the BOP's ability to monitor these metrics and hold UPS accountable for meeting the agreed-upon standards. Without defined KPIs and a robust performance monitoring system, assessing the true effectiveness and value of the service provided by UPS is difficult.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact cost and competition?

The 'Full and Open Competition After Exclusion of Sources' procurement method is a nuanced approach. It begins with the intent to compete the requirement broadly ('Full and Open Competition') but then allows for the exclusion of specific sources based on defined criteria. This exclusion could be due to security requirements, specialized capabilities, past performance issues, or other factors deemed necessary by the agency. While it aims to ensure that only qualified and suitable vendors participate, it inherently reduces the pool of potential bidders compared to unrestricted full and open competition. In this case, with 3 bidders, the competition level is moderate. This reduction in competition might lead to prices that are less competitive than if all potential vendors were allowed to bid. However, if the exclusions were justified and necessary for the specific needs of delivering inmate packages securely, the resulting price might represent the best value achievable under the circumstances, balancing cost with essential qualifications and security.

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: 3

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: $10,000

Exercised Options: $10,000

Current Obligation: $10,000

Actual Outlays: $2,830

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline