VA's $50.7M Mail Manifesting Services Contract Awarded to FedEx Supply Chain

Contract Overview

Contract Amount: $50,733,480 ($50.7M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-10-01

End Date: 2022-06-21

Contract Duration: 628 days

Daily Burn Rate: $80.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICES

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29405

State: South Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $50.7 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract awarded through a full and open competition, suggesting a robust market for these services. 2. The contract utilized a Firm Fixed Price (FFP) structure, which transfers risk to the contractor and provides cost certainty. 3. The duration of the contract was 628 days, indicating a medium-term engagement for these services. 4. The award was a Blanket Purchase Agreement (BPA) Call, often used for recurring needs and leveraging pre-negotiated terms. 5. The contractor, FedEx Supply Chain, is a significant player in logistics and distribution, bringing established expertise. 6. The North American Industry Classification System (NAICS) code 561499 covers 'All Other Business Support Services,' a broad category. 7. The contract was not set aside for small businesses, implying the scope or nature of services did not lend itself to such a designation.

Value Assessment

Rating: good

The contract value of $50.7 million over approximately two years represents a substantial investment in mail manifesting services. While specific benchmarks for this exact service are difficult to ascertain without more granular data, FedEx's established presence in supply chain management suggests a competitive pricing structure. The firm fixed price nature of the contract provides cost predictability for the VA. Further analysis would require comparing per-unit costs for manifesting services across different government agencies and private sector contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the designation suggests a competitive process was utilized. This approach is generally favored for ensuring the government receives the best value by allowing a wide range of potential contractors to participate.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing for taxpayers by encouraging multiple companies to vie for the contract, potentially driving down costs.

Public Impact

Benefits the Department of Veterans Affairs (VA) by ensuring efficient and accurate processing of mail and shipments. Supports the delivery of essential services and supplies to veterans across the nation. The geographic impact is national, given the VA's widespread operations. Likely involves a workforce within FedEx Supply Chain responsible for managing and executing the manifesting services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or quality indicators in the provided data.
Potential for increased costs if mail volume significantly exceeds projections under a firm fixed price contract.
Dependence on a single large contractor for a critical operational function.

Positive Signals

Award to a well-established logistics provider (FedEx Supply Chain) suggests reliability and expertise.
Firm Fixed Price contract structure provides budget certainty for the VA.
Full and open competition indicates a potentially competitive pricing environment.

Sector Analysis

The mail manifesting services fall under the broader business support services sector. This sector includes a wide array of services that help organizations operate efficiently, such as administrative support, call centers, and logistics management. The market for these services is competitive, with numerous providers ranging from large corporations like FedEx to smaller specialized firms. Government contracts for such services are common, as agencies often outsource non-core functions to leverage private sector efficiencies. Benchmarking would involve comparing the cost and scope of this contract to similar manifesting or logistics contracts within the federal government and the commercial sector.

Small Business Impact

This contract was not awarded as a small business set-aside. The firm fixed price nature and the scale of the contract, coupled with the requirement for established logistics capabilities, may have made it less suitable for a small business set-aside. There is no information provided regarding subcontracting plans or opportunities for small businesses within this specific award.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of Veterans Affairs. As a firm fixed price contract, performance monitoring would focus on adherence to the terms and conditions, delivery schedules, and overall service quality. Transparency is generally facilitated through contract award databases, though detailed performance reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule (FSS) contracts for logistics and distribution services.
Other agency-specific contracts for mailroom management and shipping services.
Department of Defense (DoD) logistics and transportation contracts.

Risk Flags

Potential for cost overruns if mail volume significantly exceeds projections (mitigated by FFP).
Dependence on a single contractor for critical manifesting services.
Lack of detailed performance metrics in the provided data.
Cybersecurity risks associated with handling sensitive shipment data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $50.7 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 $50.7 million.

What is the period of performance?

Start: 2020-10-01. End: 2022-06-21.

What was the specific volume of mail or shipments processed under this contract?

The provided data does not specify the exact volume of mail or shipments processed under this $50.7 million contract. The contract value and duration (628 days) suggest a significant volume, but without explicit metrics on mail pieces, packages, or weight, it's challenging to quantify the exact throughput. The firm fixed price (FFP) nature of the contract implies that the contractor, FedEx Supply Chain, assumed the risk associated with volume fluctuations. If the actual volume significantly deviated from initial projections, it could impact the contractor's profitability or, conversely, represent a particularly advantageous rate for the VA if volumes were higher than anticipated.

How does the per-unit cost of manifesting services compare to industry benchmarks?

Determining a precise per-unit cost benchmark for mail manifesting services under this contract is difficult with the provided data. The contract is for 'All Other Business Support Services' (NAICS 561499) and awarded as a Blanket Purchase Agreement (BPA) Call with a Firm Fixed Price (FFP). Benchmarking would require detailed information on what constitutes a 'unit' (e.g., per package, per manifest, per pound) and comparing that rate against similar government or commercial contracts. Given FedEx Supply Chain's involvement, it's likely they aimed for competitive rates, but without specific unit cost data or comparable contract details, a definitive benchmark assessment cannot be made. The total contract value of $50.7 million over 628 days averages approximately $80,786 per day.

What was the track record of FedEx Supply Chain with similar VA contracts prior to this award?

The provided data does not include information on FedEx Supply Chain's specific track record with the Department of Veterans Affairs (VA) prior to this $50.7 million mail manifesting services contract. However, FedEx Supply Chain is a division of FedEx Corporation, a major global logistics provider with extensive experience in supply chain management, distribution, and transportation services across both government and commercial sectors. Their established reputation and existing infrastructure suggest a capacity to handle large-scale government contracts. A comprehensive assessment would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for FedEx's previous government engagements.

What specific risks were identified during the procurement process for this contract?

The provided data does not explicitly detail the specific risks identified during the procurement process for this $50.7 million mail manifesting services contract. However, general risks associated with large-scale logistics and business support service contracts can include performance failures, cost overruns (though mitigated by FFP), cybersecurity vulnerabilities, supply chain disruptions, and contractor non-compliance. Given the award was through full and open competition, the solicitation likely included standard risk mitigation clauses. The firm fixed price structure transfers significant cost risk to the contractor, FedEx Supply Chain. The duration of the contract (628 days) is moderate, potentially limiting long-term risks.

How does this spending compare to historical VA spending on mail and logistics services?

This $50.7 million contract for mail manifesting services represents a significant, but potentially isolated, expenditure within the VA's broader logistics and supply chain operations. To compare it historically, one would need data on the VA's total spending on mail, shipping, and related logistics support services over previous fiscal years. This contract, awarded as a BPA Call, suggests a specific need for manifesting services, which might be a component of a larger logistics strategy. Without access to historical VA spending data across similar categories (e.g., mailroom operations, package delivery, freight management), it's difficult to determine if this represents an increase, decrease, or stable level of investment in this particular service area.

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: $50,733,480

Exercised Options: $50,733,480

Current Obligation: $50,733,480

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline