VA awards $737.6M contract for delivery services to Federal Express Corporation

Contract Overview

Contract Amount: $737,600 ($737.6K)

Contractor: Federal Express Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-01

End Date: 2027-03-31

Contract Duration: 364 days

Daily Burn Rate: $2.0K/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: FEDEX DELIVERY SERVICES

Place of Performance

Location: SAINT PAUL, DAKOTA County, MINNESOTA, 55121

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $737,600 to FEDERAL EXPRESS CORPORATION for work described as: FEDEX DELIVERY SERVICES Key points: 1. Contract aims to ensure timely delivery of critical items for veterans. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Fixed-price contract structure shifts performance risk to the contractor. 4. Contract duration of one year with potential for extensions. 5. Delivery services are essential for VA's nationwide operations. 6. Spending aligns with the broader federal need for logistics support.

Value Assessment

Rating: good

The contract value of $737.6 million over its potential duration appears to be a significant investment in delivery services. Benchmarking against similar large-scale federal delivery contracts would be necessary for a precise value-for-money assessment. However, the firm fixed-price nature suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government.

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 multiple bidders were likely considered. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive process was intended. This level of competition is generally expected to drive down prices and encourage innovation.

Taxpayer Impact: A full and open competition provides taxpayers with assurance that the government sought the best possible price and service, maximizing the value of federal dollars spent on essential delivery services.

Public Impact

Veterans nationwide will benefit from reliable delivery of medical supplies, equipment, and other essential items. The contract supports the Department of Veterans Affairs' mission to provide comprehensive healthcare and benefits. Geographic impact is nationwide, covering all areas served by the VA. Workforce implications include support for logistics and delivery personnel employed by Federal Express Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single large carrier could pose risks if service disruptions occur.

Positive Signals

Federal Express Corporation is a well-established provider with extensive infrastructure.
The firm fixed-price contract incentivizes contractor efficiency and cost control.
Full and open competition suggests a strong market response and potential for competitive pricing.

Sector Analysis

The federal government is a major consumer of courier and express delivery services, with significant spending across various agencies. This contract falls within the broader logistics and transportation sector, which is critical for government operations. Comparable spending benchmarks would involve analyzing other large federal contracts for similar services, often awarded to major carriers like FedEx and UPS.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. There is no explicit information on subcontracting plans for small businesses. Without specific set-aside goals or reporting requirements, the direct impact on the small business ecosystem for this particular award is likely minimal, though Federal Express Corporation may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring Federal Express Corporation to meet delivery standards. Transparency is facilitated through federal contract databases where such awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Express Delivery Services
USPS Delivery Services
Logistics and Transportation Services
Department of Veterans Affairs Medical Supply Chain

Risk Flags

Potential for service disruption impacting critical VA operations.
Limited visibility into specific performance metrics and penalties.
Dependence on a single large contractor may reduce future negotiation leverage.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $737,600 to FEDERAL EXPRESS CORPORATION. FEDEX DELIVERY SERVICES

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

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 $737,600.

What is the period of performance?

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

What is the historical spending pattern for delivery services by the Department of Veterans Affairs?

Analyzing historical spending patterns for delivery services by the Department of Veterans Affairs (VA) is crucial for understanding the context of this $737.6 million award. While specific historical VA delivery service spending data is not provided here, federal agencies typically rely on a mix of contract vehicles and direct services for their logistics needs. Large agencies like the VA, with a nationwide presence and significant medical supply chain requirements, often award substantial contracts to major carriers. Past awards may have been with the same or different carriers, under various contract types (e.g., IDIQ, task orders). Understanding the trend of VA's expenditure in this category over the last 5-10 years, including the number and value of similar contracts, would reveal whether this award represents an increase, decrease, or stable level of investment in delivery services. It would also highlight any shifts in contracting strategies, such as a move towards larger, consolidated contracts or increased reliance on specific carriers.

How does the pricing of this contract compare to similar federal delivery contracts?

A direct comparison of the pricing for this $737.6 million Federal Express delivery contract against similar federal contracts requires access to detailed pricing structures and market data. The contract is firm fixed-price, which means the price is set regardless of the contractor's actual costs. To assess value, one would ideally benchmark the per-unit costs (e.g., cost per package, cost per mile) against other federal contracts awarded to FedEx or competitors like UPS for comparable services (e.g., express delivery, medical supply transport) over the same period. Factors like service levels, geographic coverage, and volume commitments significantly influence pricing. Without specific unit cost data or a list of comparable contracts, a definitive price comparison is challenging. However, the 'full and open competition' aspect suggests that the VA aimed to secure competitive rates, and the established nature of Federal Express Corporation implies they are likely offering rates competitive within the market for large-volume federal logistics.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are critical components of any federal contract, especially for essential services like delivery. For this $737.6 million VA contract with Federal Express Corporation, typical KPIs and SLAs would likely focus on delivery timeliness (e.g., percentage of packages delivered within 24/48 hours), package integrity (e.g., damage or loss rates), tracking accuracy, and response times for service issues. The contract's firm fixed-price nature means that failure to meet these agreed-upon performance standards could result in penalties, reduced payment, or even contract termination. The Department of Veterans Affairs would have specific metrics defined in the contract documents to ensure that veterans receive their supplies and equipment reliably and efficiently. These metrics are essential for monitoring contractor performance and ensuring the government receives the value it is paying for.

What is the track record of Federal Express Corporation in fulfilling large federal delivery contracts?

Federal Express Corporation (FedEx) has a long-standing and extensive track record of fulfilling large federal delivery contracts across numerous government agencies, including the Department of Defense, USPS, and various civilian departments. They are a major player in the logistics industry, known for their global network and advanced tracking capabilities. Historically, FedEx has demonstrated the capacity to manage high-volume, time-sensitive deliveries essential for government operations, including critical supplies, mail, and equipment. While specific performance details for every contract are not publicly available, their continued success in winning and executing large federal contracts suggests a generally positive performance history. However, like any large contractor, there may be instances of performance issues or disputes on specific contracts, which would be documented in contract performance databases or agency records.

What are the potential risks associated with relying on a single large carrier for nationwide delivery services?

Relying on a single large carrier like Federal Express Corporation for nationwide delivery services, as indicated by this $737.6 million VA contract, presents several potential risks. Firstly, service disruptions due to unforeseen events such as natural disasters, labor strikes, or operational failures at the carrier's end could significantly impact the VA's ability to deliver critical supplies and services to veterans. Secondly, a lack of direct competition within this specific contract vehicle could potentially lead to less favorable pricing in future renewals or extensions, as the government's leverage might be reduced. Thirdly, dependence on one provider might limit flexibility in adapting to rapidly changing logistical needs or adopting new technologies if the chosen carrier is slower to innovate. While FedEx is a robust provider, these systemic risks underscore the importance of strong contract management, contingency planning, and continuous market surveillance by the VA.

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

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: $737,600

Exercised Options: $737,600

Current Obligation: $737,600

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline