VA Spends $48.8M on Mail Manifesting Services via FedEx Contract

Contract Overview

Contract Amount: $48,842,089 ($48.8M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-10-01

End Date: 2021-09-30

Contract Duration: 364 days

Daily Burn Rate: $134.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICES

Place of Performance

Location: HINES, COOK County, ILLINOIS, 60141

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $48.8 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Significant spending on essential mail manifesting services. 2. FedEx identified as the sole provider under this contract. 3. Potential for higher costs due to limited competition. 4. Services fall under Business Support, a broad category.

Value Assessment

Rating: fair

The contract value of $48.8M for one year of mail manifesting services appears high. Benchmarking against similar contracts for business support services is needed to assess pricing effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded as a BPA Call, suggesting it might be a pre-negotiated agreement. The limited competition with FedEx raises questions about price discovery and potential overspending.

Taxpayer Impact: Taxpayer funds are being used for this service. Without robust competition, there's a risk that taxpayers are not receiving the best possible value.

Public Impact

Ensures efficient processing and delivery of mail for VA operations. Supports the VA's mission by facilitating communication and logistics. Relies on a single vendor, highlighting potential supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
High contract value
Sole vendor reliance

Positive Signals

Essential service provision
Established vendor relationship

Sector Analysis

Mail manifesting services fall under Business Support Services. Spending benchmarks for this sector can vary widely based on the scale and specific needs of the agency.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors.

Oversight & Accountability

The use of a BPA Call warrants review to ensure it aligns with procurement regulations and provides fair pricing. Further oversight is needed to confirm value for money.

Related Government Programs

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

Risk Flags

Lack of competitive bidding
Potential for price gouging
Vendor lock-in
Supply chain vulnerability

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $48.8 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC.. MAIL MANIFESTING SERVICES

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 $48.8 million.

What is the period of performance?

Start: 2020-10-01. End: 2021-09-30.

What is the typical market rate for mail manifesting services of this scale?

Determining the typical market rate requires detailed analysis of service scope, volume, and geographic coverage. Without this granular data, it's difficult to provide a precise benchmark. However, for a contract of this magnitude, agencies typically aim for unit costs that reflect economies of scale, often negotiated through competitive bidding processes.

What are the risks associated with relying on a single vendor for critical manifesting services?

Relying on a single vendor creates significant risks, including potential service disruptions due to the vendor's operational issues, price increases without competitive pressure, and a lack of innovation. It also limits the government's ability to leverage alternative solutions or negotiate better terms if market conditions change.

How effectively does this contract support the VA's overall mission objectives?

This contract supports the VA's mission by ensuring the efficient handling of mail, which is crucial for communication with veterans and internal operations. However, the effectiveness is potentially diminished if the cost is inflated due to limited competition, diverting funds that could be used for direct veteran 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

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: $48,842,089

Exercised Options: $48,842,089

Current Obligation: $48,842,089

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline