VA awards UPS $1.42M for small package delivery in VISN 23, extending contract through April 2027

Contract Overview

Contract Amount: $1,422,000 ($1.4M)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-01

End Date: 2027-03-31

Contract Duration: 364 days

Daily Burn Rate: $3.9K/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: UPS SMALL PACKAGE DELIVERY - VISN 23

Place of Performance

Location: SAINT PAUL, DAKOTA County, MINNESOTA, 55121

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.4 million to UNITED PARCEL SERVICE CO. for work described as: UPS SMALL PACKAGE DELIVERY - VISN 23 Key points: 1. Contract value represents a modest portion of overall federal logistics spending. 2. Delivery services market is highly competitive, with multiple established providers. 3. Potential risks include service disruptions and price fluctuations in the transportation sector. 4. Performance will be measured against delivery timelines and service level agreements. 5. This contract falls within the broad category of essential support services for federal agencies. 6. The fixed-price structure aims to provide cost certainty for the VA.

Value Assessment

Rating: good

The contract value of $1.42 million over its term appears reasonable for dedicated small package delivery services to a specific VA network (VISN 23). Benchmarking against similar federal contracts for express delivery services suggests this is within expected ranges for the scope and duration. The firm fixed-price contract type helps mitigate cost overrun risks for the government, assuming UPS can manage its operational costs effectively.

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 while initial solicitations may have excluded certain entities, the final award was made through a competitive process open to all eligible offerors. The specific details of 'exclusion of sources' are not provided, but the 'full and open' designation suggests multiple bids were likely considered, fostering price discovery and potentially leading to a more favorable outcome for the government.

Taxpayer Impact: A full and open competition generally ensures that taxpayers benefit from the most competitive pricing available in the market, as multiple qualified vendors vie for the contract.

Public Impact

Veterans in VISN 23 will benefit from timely delivery of medical supplies, equipment, and other essential items. The contract ensures the continuity of critical logistics operations for the Department of Veterans Affairs. Geographic impact is focused on the states covered by VISN 23, primarily in the Upper Midwest. Workforce implications are primarily within UPS's existing delivery network, with potential for increased utilization of drivers and logistics personnel in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased fuel surcharges impacting final costs if not adequately managed within the fixed price.
Reliance on a single carrier could lead to service disruptions if UPS experiences operational issues.
Limited visibility into the specific performance metrics beyond standard delivery times.

Positive Signals

Established track record of UPS in providing reliable small package delivery services.
Firm fixed-price contract provides budget certainty for the VA.
The contract duration allows for stable service provision over multiple years.

Sector Analysis

The couriers and express delivery services sector is a mature and highly competitive market, dominated by a few large players like UPS, FedEx, and DHL, alongside numerous regional and specialized providers. Federal agencies are significant consumers of these services for mail, package, and freight delivery. Spending in this sector is driven by the need for efficient and reliable movement of goods across the country. This contract represents a typical engagement for a federal agency requiring routine logistics support.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to a large, established corporation like UPS suggests that subcontracting opportunities for small businesses might be limited to specific logistical support roles or ancillary services, rather than the primary delivery function. The overall impact on the small business ecosystem for delivery services is likely minimal for this specific award.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and program managers. Performance will be monitored against the terms and conditions of the contract, including delivery schedules and service level agreements. The firm fixed-price nature of the contract provides a degree of accountability for UPS to manage costs and deliver services as agreed. Transparency is facilitated through contract award databases, though detailed operational performance data may not be publicly available.

Related Government Programs

Federal Express Delivery Services
USPS Mail and Package Delivery
Department of Defense Logistics Contracts
GSA Schedule 75 - Office, Entertainment, and Publication Supplies
General Services Administration (GSA) Multiple Award Schedules

Risk Flags

Potential for service disruption
Reliance on a single provider
Uncertainty of future pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.4 million to UNITED PARCEL SERVICE CO.. UPS SMALL PACKAGE DELIVERY - VISN 23

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $1.4 million.

What is the period of performance?

Start: 2026-04-01. End: 2027-03-31.

What is UPS's historical performance record with the Department of Veterans Affairs on similar delivery contracts?

While specific performance data for this exact contract is not publicly detailed, United Parcel Service (UPS) has a long-standing relationship with various federal agencies, including the Department of Veterans Affairs (VA), for logistics and delivery services. Historically, UPS is known for its robust delivery network and generally reliable service. However, like any large carrier, occasional issues related to delivery delays, lost packages, or service disruptions can occur. The VA's contracting process typically involves evaluating past performance, which would have included a review of UPS's track record. The renewal or continuation of such contracts often implies satisfactory performance, though specific metrics and any past performance issues would be detailed in internal VA evaluations and potentially in contract dispute records if significant problems arose.

How does the awarded price compare to market rates for similar small package delivery services?

The awarded value of $1.42 million for 364 days of service (approximately $3,907 per day) for UPS small package delivery to VISN 23 needs to be assessed within the context of the specific services required, including volume, speed, and geographic coverage. The firm fixed-price nature suggests UPS has factored in its operational costs, including fuel, labor, and overhead, to provide a set price. Benchmarking against commercial rates is complex due to negotiated discounts, volume commitments, and service level agreements specific to government contracts. However, given UPS's market position and the competitive nature of federal procurement, it is reasonable to assume the pricing is competitive, reflecting both market conditions and the government's purchasing power. Without detailed service volume data, a precise per-package cost comparison is difficult, but the daily rate appears aligned with significant logistical operations.

What are the primary risks associated with relying on a single carrier like UPS for this delivery requirement?

The primary risks associated with relying on a single carrier, such as UPS, for critical delivery services include potential service disruptions due to unforeseen events like severe weather, labor disputes, or operational failures within UPS. This could lead to delays in the delivery of essential medical supplies, equipment, or administrative documents, impacting VA operations and potentially patient care. Another risk is the potential for price increases in future contract renewals if competition diminishes or if UPS faces significant cost pressures it seeks to pass on. Furthermore, a lack of alternative carriers might reduce the government's leverage in negotiating terms and ensuring optimal service levels, although the initial 'full and open' competition mitigates this for the current award.

How effective is the 'full and open competition after exclusion of sources' method in ensuring value for taxpayers?

The 'full and open competition after exclusion of sources' method aims to balance the need for broad market participation with specific requirements that might initially limit the pool of eligible bidders. By ultimately opening the competition to all qualified sources, it promotes a competitive environment that should drive down prices and encourage innovation, thereby benefiting taxpayers. The 'exclusion of sources' aspect, if used appropriately, could ensure that only vendors meeting stringent technical or security requirements are considered, preventing wasted evaluation effort. However, if the exclusion criteria are overly restrictive or not well-justified, it could inadvertently limit competition and potentially lead to higher costs. The effectiveness hinges on the transparency and necessity of the initial exclusion.

What is the historical spending trend for small package delivery services by the Department of Veterans Affairs?

Analyzing the historical spending trend for small package delivery services by the Department of Veterans Affairs (VA) requires access to detailed procurement data over multiple fiscal years. Generally, federal agencies, including the VA, rely heavily on contracted logistics and delivery services to support their widespread operations, which include the distribution of medical supplies, pharmaceuticals, equipment, and administrative mail. Spending in this category tends to be relatively stable, driven by ongoing operational needs, but can fluctuate based on program expansions, changes in healthcare delivery models, and overall budget allocations. The VA's increasing focus on telehealth and remote patient care might also influence the types and volumes of deliveries required. Without specific historical data for this contract category, it's difficult to pinpoint precise trends, but it's likely a consistent and significant expenditure area for the agency.

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: $1,422,000

Exercised Options: $1,422,000

Current Obligation: $1,422,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline