VA awards $36.9M contract for mail manifesting services to FedEx Supply Chain Distribution System, Inc

Contract Overview

Contract Amount: $36,904,969 ($36.9M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $101.4K/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 $36.9 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract awarded through a competitive process, suggesting potential for price discovery. 2. The contract's value represents a significant investment in essential business support services for the VA. 3. Fixed-price contract type may offer cost certainty for the government. 4. Performance period of one year indicates a need for ongoing, but not necessarily long-term, service provision. 5. The specific service category (NAICS 561499) covers a broad range of business support functions.

Value Assessment

Rating: good

The contract value of $36.9 million for one year of mail manifesting services appears to be within a reasonable range for large-scale government operations. Benchmarking against similar contracts for comprehensive logistics and mail handling services would provide a more precise assessment of value for money. The firm fixed-price structure helps manage cost fluctuations, but the absence of detailed performance metrics makes a definitive value assessment challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This approach generally fosters a competitive environment, encouraging vendors to offer their best pricing and service terms to secure the award. The specific number of bidders is not provided, but the open competition suggests a healthy market response for these services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider array of service options, maximizing the value of federal dollars spent.

Public Impact

Veterans Affairs (VA) benefits from efficient and reliable mail manifesting services, crucial for administrative and healthcare operations. The contract supports the delivery of essential business support services, ensuring smooth communication and logistics. Services are likely concentrated in Kansas (ST: KS), impacting local operations and potentially workforce within that region. The contract supports the operational infrastructure of the VA, indirectly benefiting healthcare providers and veteran beneficiaries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess service quality and efficiency.
Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for critical mail manifesting functions could pose a risk if service is interrupted.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
Firm fixed-price contract provides cost predictability for the duration of the award.
Contract supports a vital government agency (VA), ensuring continuity of essential operations.

Sector Analysis

The mail manifesting services sector, categorized under Business Support Services (NAICS 561499), encompasses a range of administrative and operational support functions. This contract with FedEx Supply Chain Distribution System, Inc. fits within the broader logistics and supply chain management industry, which is critical for government operations. Comparable spending benchmarks for similar large-scale logistics and mail handling contracts across federal agencies would provide context for this $36.9 million award.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a large contract awarded to a major provider, it is unlikely to have direct subcontracting opportunities specifically targeted at small businesses unless stipulated by the prime contractor. The primary impact on the small business ecosystem would be indirect, through the overall demand for related services or supplies that small businesses might provide to the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases, though detailed operational performance data may not be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Mail Services
Logistics and Supply Chain Management Contracts
Business Support Services
Department of Veterans Affairs Administrative Support

Risk Flags

Contract duration is one year, requiring potential re-competition or extension.
Specific performance metrics are not detailed in the provided data.
Geographic concentration in Kansas may limit broader applicability or scalability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $36.9 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 $36.9 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

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 access to detailed procurement data over multiple fiscal years. Without specific historical data for this contract or category, it's difficult to establish a precise trend. However, given the VA's extensive operations and reliance on communication and distribution, consistent spending on such services is expected. Factors like changes in operational volume, adoption of new technologies, and shifts in contracting strategies (e.g., consolidating services, moving to different contract vehicles) could influence year-over-year spending. A comprehensive review of past VA contracts for similar services would reveal whether this $36.9 million award represents an increase, decrease, or stable level of investment in mail manifesting.

How does the awarded price compare to market rates for similar mail manifesting services?

Determining if the $36.9 million award represents a competitive price requires benchmarking against market rates for comparable mail manifesting services. This involves comparing the contract's scope of work, service levels, and geographic coverage against pricing from commercial logistics providers. Factors such as volume discounts, contract duration, and specific service inclusions (e.g., tracking, reporting, specialized handling) significantly influence pricing. Given that FedEx Supply Chain Distribution System, Inc. is a major player, their pricing is likely competitive within the industry. However, without specific market data or a detailed breakdown of the services provided under this contract, a precise comparison to market rates is challenging. The firm fixed-price nature suggests an agreed-upon value, but its true market competitiveness hinges on the specifics of the service agreement.

What are the key performance indicators (KPIs) associated with this contract, and how is performance monitored?

The provided data does not specify the Key Performance Indicators (KPIs) for this mail manifesting services contract. Typically, such contracts would include metrics related to delivery timeliness, accuracy of manifesting, package integrity, cost per package, and customer satisfaction. Performance monitoring would be conducted by the Department of Veterans Affairs' contracting officer's representative (COR) or designated personnel. They would review contractor reports, conduct audits, and potentially track service delivery through system data. The effectiveness of oversight depends on the clarity and measurability of the KPIs and the rigor of the monitoring process. Without explicit KPIs, assessing the contractor's performance and ensuring value for money becomes more subjective.

What is the track record of FedEx Supply Chain Distribution System, Inc. in performing similar government contracts?

FedEx Supply Chain Distribution System, Inc., as part of the broader FedEx corporation, has a substantial track record in logistics and supply chain management, including significant experience with government contracts. While specific details on their past performance with the VA for mail manifesting services are not provided here, FedEx entities have historically secured and performed numerous contracts across various federal agencies for shipping, logistics, and distribution. Their established infrastructure, technological capabilities, and experience in handling large volumes suggest a capacity to meet the demands of this contract. A thorough review of their past performance ratings, any past performance issues, and the scale of previous government contracts would offer a more definitive assessment of their suitability and reliability for this specific award.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks for this contract include service disruptions due to unforeseen events (e.g., natural disasters, labor issues), potential cost overruns if the fixed-price model doesn't account for all variables, and performance deficiencies impacting VA operations. Mitigation strategies typically involve robust contract management by the VA, including clear performance standards, regular reviews, and contingency planning. The firm fixed-price nature itself acts as a risk mitigation tool for the government regarding cost certainty. Furthermore, the competitive nature of the award suggests the contractor has incentives to perform well to secure future business. The VA's oversight mechanisms, including potential penalties for non-performance or termination clauses, also serve as risk mitigation.

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: 100 PAPERCRAFT PARK, PITTSBURGH, PA, 15238

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

Financial Breakdown

Contract Ceiling: $71,019,848

Exercised Options: $71,019,848

Current Obligation: $36,904,969

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline