VA awards $45.5M contract to UPS for delivery services, highlighting competition

Contract Overview

Contract Amount: $45,497,263 ($45.5M)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-01

End Date: 2023-09-30

Contract Duration: 182 days

Daily Burn Rate: $250.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NGDS SHIPPING

Place of Performance

Location: LEAVENWORTH, LEAVENWORTH County, KANSAS, 66048

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $45.5 million to UNITED PARCEL SERVICE CO. for work described as: NGDS SHIPPING Key points: 1. Significant contract value of $45.5 million awarded to a major player in the logistics sector. 2. Full and open competition after exclusion of sources indicates a structured procurement process. 3. Potential for cost savings and service improvements through established courier networks. 4. Focus on essential delivery services for the Department of Veterans Affairs.

Value Assessment

Rating: good

The contract value of $45.5 million for a 6-month period suggests a competitive pricing strategy. Benchmarking against similar large-scale delivery contracts would provide further insight into its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 'full and open competition after exclusion of sources' method suggests that while initial sources might have been limited, the final award was based on a competitive process. This approach aims to ensure fair pricing and access to the best value.

Taxpayer Impact: Taxpayer funds are utilized efficiently through a competitive bidding process, aiming to secure cost-effective delivery services for the VA.

Public Impact

Ensures timely and reliable delivery of critical supplies and mail to VA facilities and beneficiaries. Supports the operational efficiency of the Department of Veterans Affairs by outsourcing logistics. Leverages established private sector infrastructure for nationwide delivery capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals.
Dependence on a single large vendor for critical delivery needs.

Positive Signals

Utilizes a well-established and reputable delivery service provider.
Competitive bidding process likely secured favorable pricing.
Contract duration is relatively short, allowing for re-evaluation.

Sector Analysis

The contract falls within the 'Couriers and Express Delivery Services' sector, a mature industry with established players. Spending benchmarks for similar government contracts in this sector can be used to assess value.

Small Business Impact

This contract was awarded to a large corporation, United Parcel Service Co., and does not appear to include specific provisions or set-asides for small businesses.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. The use of a competitive process and a fixed-price contract structure provides a degree of accountability.

Related Government Programs

Couriers and Express Delivery Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for vendor lock-in if performance is consistently high.
Limited transparency on specific cost breakdowns within the firm fixed price.
Reliance on a single large provider for a critical function.
Geographic coverage and service level agreements need careful monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $45.5 million to UNITED PARCEL SERVICE CO.. NGDS SHIPPING

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

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 $45.5 million.

What is the period of performance?

Start: 2023-04-01. End: 2023-09-30.

What was the specific rationale for excluding certain sources before the full and open competition?

The exclusion of sources prior to full and open competition typically occurs when specific capabilities, past performance, or unique service requirements necessitate limiting the initial pool of potential offerors. This ensures that only qualified vendors capable of meeting stringent criteria are considered, ultimately aiming to secure the best value for the government while maintaining a competitive environment among the eligible participants.

How does the per-unit cost of this contract compare to industry benchmarks for similar delivery volumes and distances?

Without specific per-unit cost data and detailed delivery metrics (e.g., package weight, dimensions, origin-destination pairs), a direct comparison to industry benchmarks is challenging. However, the total contract value of $45.5 million over six months for nationwide delivery suggests a significant volume. A thorough analysis would require breaking down the contract into service components and comparing rates against publicly available data for similar government or commercial logistics contracts.

What are the key performance indicators (KPIs) used to measure the effectiveness of UPS's delivery services under this contract?

Effective oversight of this contract would involve tracking key performance indicators such as on-time delivery rates, package damage/loss rates, customer satisfaction scores (from VA personnel receiving services), and adherence to delivery windows. The contract likely includes specific clauses and reporting requirements for these metrics to ensure accountability and service quality.

Industry Classification

NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1400 N HURSTBOURNE PKWY, LOUISVILLE, KY, 40223

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

Financial Breakdown

Contract Ceiling: $55,817,792

Exercised Options: $55,817,792

Current Obligation: $45,497,263

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline