VA awards $32.3M for mail manifesting services to FedEx Supply Chain, highlighting competition and operational efficiency

Contract Overview

Contract Amount: $32,346,930 ($32.3M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-10-01

End Date: 2023-06-30

Contract Duration: 637 days

Daily Burn Rate: $50.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICES

Place of Performance

Location: LEAVENWORTH, LEAVENWORTH County, KANSAS, 66048

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $32.3 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract leverages existing BPA call for efficient service delivery. 2. Firm fixed-price structure provides cost certainty for the VA. 3. FedEx Supply Chain's established infrastructure supports reliable service. 4. Performance period spans nearly two years, indicating sustained need. 5. Service category aligns with essential business support functions. 6. Geographic coverage includes Kansas, suggesting a regional focus.

Value Assessment

Rating: good

The contract value of $32.3 million over approximately two years for mail manifesting services appears reasonable given the provider and scope. Benchmarking against similar large-scale logistics and manifesting contracts is challenging without more granular data on service volume and specific requirements. However, the use of a firm fixed-price contract with an established provider like FedEx suggests a degree of cost control and predictability for the Department of Veterans Affairs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific details on the number of bidders are not provided, but the designation suggests a robust competitive process. This level of competition is generally expected to drive favorable pricing and service terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a market where providers compete on price and quality, leading to better value.

Public Impact

Veterans Affairs beneficiaries indirectly benefit from efficient mail operations supporting healthcare and administrative functions. Essential mail manifesting and distribution services are delivered. Services are primarily focused within Kansas. Supports logistics and administrative workforce within the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased reliance on a single large vendor for critical services.
Limited insight into specific performance metrics and service level adherence.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides budget certainty.
Utilizes an existing BPA call, indicating streamlined procurement.
Contractor is a well-established logistics provider.

Sector Analysis

Mail manifesting services fall under the broader business support services sector, specifically within the 'All Other Business Support Services' NAICS code (561499). This sector is characterized by a wide range of services supporting the operational needs of businesses and government agencies. The market includes numerous providers, from large logistics firms to specialized service companies. The contract value of $32.3 million is significant for this type of service, suggesting a substantial volume of mail processing and distribution for the VA.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the nature of the services and the prime contractor, it is likely that any small business involvement would be through subcontracting opportunities, if any. Further analysis would be needed to determine if subcontracting goals were established or met.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the relevant program officials within the Department of Veterans Affairs. The firm fixed-price nature of the contract provides a degree of accountability through adherence to the agreed-upon price. Transparency is facilitated by the contract award data being publicly available, though detailed performance reports may not be public.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule contracts for logistics and business services
Department of Defense mail and distribution contracts
Other agency contracts for mailroom management and fulfillment

Risk Flags

Contract duration is substantial, requiring ongoing monitoring.
Limited public detail on specific performance metrics.
Reliance on a single large vendor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $32.3 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 $32.3 million.

What is the period of performance?

Start: 2021-10-01. End: 2023-06-30.

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

Analyzing historical spending for mail manifesting services by the VA requires accessing detailed procurement data over multiple fiscal years. While this specific contract is for $32.3 million, understanding the VA's broader investment in such services would involve looking at prior contracts, including those awarded to different vendors or through different procurement vehicles like GSA schedules or other agency contracts. Trends in spending could indicate increasing reliance on outsourced services, shifts in technology adoption, or changes in the volume of mail processed. Without access to a comprehensive historical database for this specific service category across the VA, a precise historical spending pattern cannot be detailed here. However, the current award suggests a significant and ongoing need for these services.

How does the per-unit cost of this contract compare to industry benchmarks for mail manifesting?

Determining a precise per-unit cost for mail manifesting services is complex, as it depends heavily on the specific services included (e.g., postage, handling, tracking, reporting), the volume of mail, and the geographic scope. This contract is a firm fixed-price award valued at $32.3 million over approximately 637 days. To establish a per-unit benchmark, one would need to know the total number of mail pieces processed or the total weight/volume handled. Industry benchmarks can vary widely. For instance, large-scale commercial mailers might negotiate rates significantly lower than government contracts due to volume and different service requirements. Without the specific volume metrics from this VA contract, a direct per-unit comparison to industry benchmarks is not feasible. However, the competitive nature of the award suggests the VA sought to achieve favorable unit economics.

What are the key performance indicators (KPIs) used to evaluate FedEx Supply Chain's performance under this contract?

The specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for mail manifesting and distribution services, typical KPIs would likely include metrics related to on-time delivery rates, accuracy of manifesting and postage application, mail processing speed, reduction in postage costs, compliance with postal regulations, and overall service reliability. The contract's firm fixed-price nature incentivizes the contractor to meet these performance standards efficiently. The Department of Veterans Affairs would have mechanisms in place, such as performance reports and potential site visits, to monitor adherence to service level agreements, even if not explicitly listed in the summary data.

What is the track record of FedEx Supply Chain in handling similar government contracts?

FedEx Supply Chain, as a division of FedEx Corporation, has a substantial track record in logistics, distribution, and supply chain management, including significant experience with government contracts. While specific details on past VA contracts for mail manifesting are not provided here, FedEx as a whole has held numerous contracts across various federal agencies for transportation, logistics, and related services. Their established infrastructure, global reach, and experience in managing complex supply chains suggest a strong capability to handle large-scale government requirements. Government contract databases would provide a more granular view of their past performance, including any specific awards related to manifesting or similar services.

Are there any identified risks associated with this contract, and how are they being mitigated?

Potential risks associated with this contract could include service disruptions due to unforeseen events (e.g., natural disasters, labor issues), potential cost overruns if the scope significantly expands beyond initial estimates (though mitigated by firm fixed-price), or performance deficiencies by the contractor. Mitigation strategies typically involve robust contract management by the VA, including regular performance reviews, clear communication channels, and contingency planning. The use of a well-established provider like FedEx Supply Chain, with its extensive network and operational redundancies, inherently reduces some operational risks. Furthermore, the full and open competition process aims to select a vendor with a proven ability to deliver reliable 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: $32,346,930

Exercised Options: $32,346,930

Current Obligation: $32,346,930

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline