VA Spends $46.3M on Mail Manifesting Services via FedEx, Raising Value Questions
Contract Overview
Contract Amount: $46,283,780 ($46.3M)
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: $127.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MAIL MANIFESTING SERVICES
Place of Performance
Location: LANCASTER, DALLAS County, TEXAS, 75134
State: Texas Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $46.3 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Significant expenditure on a niche service, questioning cost-effectiveness. 2. Reliance on a single provider, FedEx, may limit competitive pricing. 3. Potential for higher costs due to lack of robust competition. 4. The 'All Other Business Support Services' category lacks specific benchmarks.
Value Assessment
Rating: questionable
The $46.3 million spent on mail manifesting services is substantial. Without clear benchmarks for this specific service, it's difficult to assess if the pricing is competitive compared to similar contracts or market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While advertised as full and open competition, the award to FedEx Supply Chain Distribution System, Inc. suggests limited actual bidders or a specific contract vehicle (BPA Call) that may have influenced the outcome and price discovery.
Taxpayer Impact: Taxpayers may be overpaying if the competitive process did not yield the lowest possible price for these essential mail manifesting services.
Public Impact
Veterans may experience indirect impacts if service costs affect overall VA operational budgets. The large sum allocated could potentially be used for other critical veteran services. Transparency in the bidding process for such services is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High expenditure on a non-core service.
- Lack of clear competitive alternatives identified.
- Potential for price inflation due to limited market visibility.
Positive Signals
- Contract awarded under full and open competition.
- Service is essential for mail operations.
Sector Analysis
The 'All Other Business Support Services' sector is broad, making direct spending comparisons difficult. The $46.3 million for mail manifesting is a significant investment within this category, suggesting a substantial need or potentially an area ripe for efficiency improvements.
Small Business Impact
The data does not indicate any specific participation or set-asides for small businesses in this contract, suggesting the primary award went to a large corporation.
Oversight & Accountability
The use of a BPA Call award warrants scrutiny to ensure the competitive process was robust and that the pricing reflects fair market value, despite the 'full and open' designation.
Related Government Programs
- All Other Business Support Services
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- High dollar amount for a support service.
- Limited visibility into the competitive landscape.
- Potential for cost overruns or inefficiencies.
- Lack of specific service benchmarks.
- Single primary awardee identified.
Tags
all-other-business-support-services, department-of-veterans-affairs, tx, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $46.3 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 $46.3 million.
What is the period of performance?
Start: 2022-10-01. End: 2023-09-30.
What specific metrics were used to determine the value for money in this $46.3 million contract for mail manifesting services?
The provided data lacks specific metrics for value determination. A thorough review would require access to the contract's performance metrics, cost-benefit analysis, and any independent cost estimations used during the procurement process to justify the significant expenditure.
What are the primary risks associated with awarding a large contract for mail manifesting services to a single provider like FedEx?
The primary risks include potential price escalation over time due to reduced competitive pressure, vendor lock-in making future transitions difficult and costly, and a potential decrease in service innovation if the provider faces no market-based incentives to improve.
How effectively does this contract support the VA's core mission of serving veterans?
While mail manifesting is a necessary operational function, the substantial cost raises questions about its direct effectiveness in supporting the VA's core mission. Resources allocated here might otherwise fund direct veteran care or benefits, suggesting a need to optimize such support 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: 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: $46,283,780
Exercised Options: $46,283,780
Current Obligation: $46,283,780
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 36C77020A0009
IDV Type: BPA
Timeline
Start Date: 2022-10-01
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2025-10-21
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