VA awards $47.7M contract for mail manifesting services to FedEx Supply Chain Distribution

Contract Overview

Contract Amount: $47,656,519 ($47.7M)

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: $130.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL MANIFESTING SERVICES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85706

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $47.7 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract value represents a significant investment in essential mail logistics. 2. FedEx Supply Chain Distribution, Inc. secured this award, indicating established capabilities. 3. The contract duration of one year suggests a need for ongoing, consistent service. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. Awarded under a Blanket Purchase Agreement (BPA) Call, implying pre-negotiated terms. 6. Geographic focus on Arizona (AZ) highlights regional service delivery.

Value Assessment

Rating: good

The contract value of approximately $47.7 million for one year of mail manifesting services appears reasonable given the scale of operations for the Department of Veterans Affairs. Benchmarking against similar large-scale logistics contracts is challenging without more specific service details, but the firm fixed-price structure suggests an effort to manage costs effectively. The award to a known entity like FedEx Supply Chain Distribution, Inc. implies a level of confidence in their ability to deliver value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process that likely drove pricing towards market rates. The use of a BPA Call suggests that a broader contract vehicle was already in place, streamlining the competition for this specific task order.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service quality, ensuring that government funds are used efficiently.

Public Impact

Veterans will benefit from efficient and reliable mail services essential for receiving medical supplies, benefits information, and other critical communications. The contract ensures the smooth operation of mail manifesting and distribution for the Department of Veterans Affairs. Services are primarily focused on the state of Arizona, impacting VA facilities and beneficiaries within this region. The contract supports the logistics and administrative workforce involved in mail processing and distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if market rates rise significantly during the contract period, despite the fixed-price nature.
Dependence on a single large provider could create risks if service levels degrade or if the provider faces operational disruptions.

Positive Signals

Award to a well-established logistics provider like FedEx suggests a high likelihood of reliable service delivery.
Firm fixed-price contract provides cost certainty for the VA, protecting against unexpected price escalations.
Full and open competition indicates that the VA sought the best value from the market.

Sector Analysis

Mail manifesting services fall under the broader business support services sector, specifically within logistics and supply chain management. This sector is characterized by a mix of large established players and specialized niche providers. The market size for such services is substantial, driven by the needs of government agencies and large corporations requiring efficient handling and tracking of mail and packages. This contract represents a significant portion of spending within this niche for the VA in Arizona.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the award to FedEx Supply Chain Distribution, Inc., a large corporation, it is unlikely that significant subcontracting opportunities for small businesses will be mandated under this specific award. The focus appears to be on leveraging the capabilities of a major logistics provider.

Oversight & Accountability

The contract is subject to the oversight of the Department of Veterans Affairs. As a firm fixed-price contract awarded via a BPA Call, it likely adheres to established procurement regulations and oversight mechanisms. Transparency is generally maintained through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Veterans Affairs Mail Services
Federal Logistics and Supply Chain Management
Business Support Services Contracts
BPA Call Awards

Risk Flags

Potential for service disruption
Reliance on single large provider
Scope creep risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $47.7 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 $47.7 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 is crucial for understanding trends and identifying potential cost efficiencies. While specific data for 'mail manifesting services' alone can be difficult to isolate, the VA's overall spending on logistics, supply chain, and business support services is substantial. In recent fiscal years, the VA has consistently allocated significant funds towards operational support, including mail handling and distribution. For instance, looking at broader categories like 'All Other Business Support Services' (NAICS 561499), which encompasses this contract, reveals multi-million dollar annual expenditures. Examining year-over-year spending within this category, and specifically for contracts of similar size and scope, would reveal whether this $47.7 million award represents an increase, decrease, or stable level of investment in these services. It's also important to consider if previous contracts for similar services were awarded to the same or different vendors, and at what price points, to assess value over time.

How does the per-unit cost of this contract compare to similar mail manifesting services?

Determining a precise per-unit cost for this mail manifesting contract is challenging without detailed breakdowns of the services provided (e.g., cost per piece, cost per pound, cost per manifest generated). The contract is a firm fixed-price award valued at $47.7 million for a 364-day period. If we were to approximate a daily cost, it would be roughly $130,925 per day. However, this does not represent a 'per-unit' cost. To benchmark effectively, we would need to know the volume of mail processed or the number of manifests generated. Comparing this to other federal contracts for similar services requires access to detailed pricing structures of those contracts. Generally, large-scale contracts with established providers like FedEx aim for economies of scale. Without specific volume metrics or comparable contract data, a direct per-unit cost comparison is not feasible. However, the 'full and open competition' suggests the VA sought competitive pricing for the defined scope of work.

What is FedEx Supply Chain Distribution, Inc.'s track record with federal contracts, particularly with the VA?

FedEx Supply Chain Distribution, Inc., as part of the larger FedEx Corporation, has a significant track record of performing federal contracts. Their experience typically spans logistics, transportation, and distribution services across various government agencies, including the Department of Veterans Affairs. Awards to FedEx entities often involve large-scale operations requiring robust infrastructure and proven reliability. For the VA specifically, FedEx has likely been involved in contracts related to medical supply chain management, mail services, and general logistics. A review of federal procurement data (like FPDS or USASpending) would reveal the extent and nature of their past awards, including performance ratings, contract values, and any reported issues. Their established presence in the logistics sector suggests a capacity to handle complex requirements, but as with any large contractor, performance can vary across individual contracts. This specific award indicates continued confidence from the VA in their capabilities.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this $47.7 million mail manifesting services contract include potential service disruptions, cost overruns (despite the fixed-price nature, scope creep is a risk), and reliance on a single large provider. Service disruptions could impact the VA's ability to communicate with veterans or distribute essential materials. Mitigation strategies likely involve performance metrics and service level agreements (SLAs) within the contract, allowing the VA to monitor FedEx's performance closely. The firm fixed-price structure inherently mitigates direct cost overrun risks for the VA, provided the scope remains unchanged. Reliance on a single provider is a common risk in large contracts; mitigation might include contingency planning by the VA and strong contract management to ensure accountability. Furthermore, the 'full and open competition' process itself serves as a risk mitigation tool by selecting a vendor deemed capable and competitive.

How does this contract align with the VA's broader mission and strategic goals?

This contract directly aligns with the VA's core mission of serving veterans by ensuring the efficient and reliable flow of information and materials. Effective mail manifesting and distribution are critical for timely delivery of benefits information, healthcare communications, appointment reminders, and medical supplies to veterans across Arizona. By outsourcing these essential logistics functions to a specialized provider like FedEx Supply Chain Distribution, Inc., the VA can focus its resources and personnel on direct healthcare and benefits administration. This strategic use of contracting allows the VA to leverage external expertise and infrastructure, potentially improving service delivery speed and accuracy, which ultimately enhances the veteran experience and supports the VA's commitment to providing comprehensive care and support.

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: $47,656,519

Exercised Options: $47,656,519

Current Obligation: $47,656,519

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline