VA awards $39.9M contract for mail manifesting services to FedEx Supply Chain Distribution System, Inc

Contract Overview

Contract Amount: $39,883,736 ($39.9M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $109.3K/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 $39.9 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 value for money. 2. The fixed-price contract type helps mitigate cost overrun risks. 3. Services are categorized under 'All Other Business Support Services,' a broad category. 4. The contract duration is one year, allowing for regular performance review. 5. The awardee, FedEx Supply Chain Distribution System, Inc., is a significant player in logistics. 6. The contract is not set aside for small businesses, indicating a focus on large-scale providers.

Value Assessment

Rating: good

The contract value of $39.9 million for mail manifesting services over one year appears reasonable given the scale of operations for a large federal agency like the VA. Benchmarking against similar large-scale logistics and mail support contracts within the federal government would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, as it shifts risk to the contractor. Without specific per-unit cost data or detailed service level agreements, a definitive assessment of optimal pricing is challenging, but the competitive award suggests a market-driven price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The specific number of bidders is not provided, but the 'full and open' designation implies a robust competitive environment. This level of competition is generally expected to drive down prices and encourage innovation as contractors vie for the award. The agency's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: Taxpayers benefit from the competitive process through potentially lower prices and higher quality services. Full and open competition ensures that the government is not limited to a single provider, fostering a more efficient use of public funds.

Public Impact

Veterans and VA staff will benefit from efficient and reliable mail manifesting services, crucial for administrative and healthcare-related communications. The services delivered will support the operational needs of the Department of Veterans Affairs across its various facilities. The geographic impact is likely nationwide, supporting the VA's extensive network of hospitals and clinics. Workforce implications may include the need for specialized personnel within FedEx to manage VA mail streams, but direct VA workforce impact is minimal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if FedEx's market dominance leads to reduced future competition.
Dependence on a single large contractor for critical mail services could pose a risk if performance falters.
Lack of specific performance metrics in the provided data makes it difficult to assess service quality proactively.

Positive Signals

Award to a well-established logistics provider like FedEx suggests a high likelihood of reliable service delivery.
The firm fixed-price contract type provides cost certainty for the VA.
Full and open competition indicates a healthy market response and potential for competitive pricing.

Sector Analysis

The mail manifesting services sector is a critical component of the broader business support services industry, which includes a wide range of activities from administrative support to logistics. This contract falls under the 'All Other Business Support Services' NAICS code (561499), indicating a diverse market. Federal spending in this area supports the operational efficiency of government agencies by outsourcing specialized functions. Comparable spending benchmarks would involve analyzing contracts for mailroom management, shipping, and logistics support across various federal departments.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'ss': false and 'sb': false. The award to FedEx Supply Chain Distribution System, Inc., a large corporation, suggests that the scale and complexity of the required services were best met by a major provider. This implies limited direct subcontracting opportunities for small businesses on this specific contract, though FedEx may engage small businesses in other capacities within its broader supply chain operations.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability by tying payment to deliverables. Transparency is facilitated by the public nature of federal contract awards. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the VA OIG generally has oversight over VA spending and operations, including contract performance and potential fraud, waste, or abuse.

Related Government Programs

General Services Administration (GSA) Mail Management Services
US Postal Service (USPS) Federal Agency Mail Services
Department of Defense (DoD) Logistics and Transportation Services

Risk Flags

Potential for vendor lock-in due to contractor's market position.
Dependence on a single provider for critical operational support.
Lack of specific performance metrics in initial data hinders proactive quality assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $39.9 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 $39.9 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-09-30.

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

Analyzing historical spending data for mail manifesting services by the VA is crucial for understanding trends and establishing benchmarks. Without direct access to historical VA spending databases, we can infer that spending in this category likely fluctuates based on agency needs, operational scale, and the availability of competitive contracts. Prior contracts may have been with different providers or utilized different contracting vehicles. A comprehensive review would involve examining past solicitations, awards, and contract modifications over several fiscal years to identify patterns in contract values, durations, and the types of services procured. This historical context helps in evaluating whether the current $39.9 million award represents an increase, decrease, or stable level of investment in these essential support services.

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

The awarded price of $39.9 million for one year of mail manifesting services needs to be benchmarked against market rates. This comparison requires analyzing pricing data from commercial logistics providers offering similar services, considering factors like volume, scope, and service level agreements. Federal contracts often include specific requirements that may differ from commercial offerings, potentially influencing price. The fact that this was awarded under full and open competition suggests that the price is likely competitive within the federal procurement landscape. However, a definitive comparison would necessitate access to detailed service level agreements and potentially proprietary pricing information from both the contractor and market competitors.

What are the key performance indicators (KPIs) associated with this contract, and how will they be 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 mail processing speed, accuracy, delivery timeliness, cost per piece, and customer satisfaction. Monitoring these KPIs is essential for ensuring the contractor, FedEx Supply Chain Distribution System, Inc., meets the VA's requirements. The VA's contracting officer and contract specialists are responsible for overseeing performance, likely through regular performance reviews, data analysis of reported metrics, and potentially site visits. Failure to meet KPIs could result in contractual remedies, including financial penalties or termination.

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

FedEx Supply Chain Distribution System, Inc. is a subsidiary of FedEx Corporation, a globally recognized leader in logistics and transportation. While specific performance data for this exact entity on federal contracts isn't detailed here, FedEx as a whole has a substantial history of performing large-scale logistics and distribution services for government agencies. Their track record generally includes managing complex supply chains, ensuring timely delivery, and adhering to security protocols. Federal agencies often award contracts to FedEx due to its extensive infrastructure, technological capabilities, and established reputation. A thorough assessment would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for FedEx on similar federal contracts.

What are the potential risks associated with relying on a single large contractor for these essential services?

Relying on a single large contractor like FedEx Supply Chain Distribution System, Inc. for mail manifesting services presents several potential risks. Firstly, there's a risk of vendor lock-in, where switching providers could be costly and disruptive. Secondly, if the contractor experiences performance issues, financial instability, or operational disruptions (e.g., labor strikes, natural disasters), it could significantly impact the VA's ability to manage its mail and communications. Thirdly, a lack of robust competition in future contract renewals could lead to price increases. Mitigating these risks involves strong contract management, clear performance expectations, contingency planning, and regular market analysis to ensure continued value and service reliability.

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: $39,883,736

Exercised Options: $39,883,736

Current Obligation: $39,883,736

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline