VA awards $60.9M contract for Mail Manifesting Service to FedEx Supply Chain Distribution System

Contract Overview

Contract Amount: $60,940,126 ($60.9M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-04-01

End Date: 2020-06-30

Contract Duration: 90 days

Daily Burn Rate: $677.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICE

Place of Performance

Location: LEAVENWORTH, LEAVENWORTH County, KANSAS, 66048

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $60.9 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICE Key points: 1. Contract awarded to a single, established provider. 2. Service falls under 'All Other Business Support Services' NAICS code. 3. Short duration (90 days) suggests a specific, immediate need. 4. Firm Fixed Price contract type aims to control costs.

Value Assessment

Rating: good

The contract value of $60.9M for a 90-day period appears high for a manifesting service. Benchmarking against similar contracts for mail or logistics services would be necessary to confirm value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple vendors had the opportunity to bid. This method generally promotes competitive pricing.

Taxpayer Impact: The firm fixed price contract aims to protect taxpayers from cost overruns, but the overall value needs further scrutiny for efficiency.

Public Impact

Ensures efficient processing and tracking of mail for VA operations. Supports the VA's mission by maintaining critical communication channels. Potential for improved delivery times and reduced shipping errors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a short duration.
Lack of specific performance metrics or benchmarks provided.

Positive Signals

Awarded under full and open competition.
Firm Fixed Price contract type.

Sector Analysis

This contract falls within the business support services sector, specifically related to logistics and mail handling. Spending in this area is often driven by the need for efficient operational support for large government agencies.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to assess small business participation.

Oversight & Accountability

The contract was awarded via a delivery order, suggesting it may be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on the terms of the base IDIQ and the justification for this specific order.

Related Government Programs

All Other Business Support Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High cost per day.
Short contract duration.
Potential for better long-term pricing.
Lack of detailed service description.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $60.9 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC.. MAIL MANIFESTING SERVICE

Who is the contractor on this award?

The obligated recipient is FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC..

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 $60.9 million.

What is the period of performance?

Start: 2020-04-01. End: 2020-06-30.

What is the specific service provided by the 'MAIL MANIFESTING SERVICE' and how does it justify the high cost?

The 'MAIL MANIFESTING SERVICE' likely involves the electronic tracking, documentation, and management of mail shipments. Given the $60.9M value for 90 days, it suggests a high volume of mail or complex tracking requirements, potentially for sensitive VA medical supplies or communications across numerous facilities. Further details on the scope of services are needed to fully justify the cost.

What are the risks associated with awarding a large sum for a short-term manifesting service?

The primary risk is paying a premium for a short-term solution without securing long-term cost efficiencies or exploring more competitive, ongoing contracts. There's also a risk of vendor lock-in if the service is critical and difficult to transition away from. The high cost for a brief period warrants scrutiny to ensure it's not due to inflated pricing or a lack of competitive pressure.

How does this contract contribute to the VA's overall mission effectiveness?

An effective mail manifesting service is crucial for the VA to manage its vast communication and supply chain logistics. It ensures timely delivery of critical information, medical supplies, and benefits-related correspondence to veterans and staff. By streamlining mail operations, the VA can reduce administrative burdens, minimize errors, and maintain reliable communication channels, ultimately supporting better veteran care and services.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

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: 700 CRANBERRY WOODS DR, CRANBERRY TOWNSHIP, PA, 16066

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

Financial Breakdown

Contract Ceiling: $60,940,126

Exercised Options: $60,940,126

Current Obligation: $60,940,126

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS03F0169X

IDV Type: FSS

Timeline