VA Spends $52.2M on Mail Manifesting Services via FedEx Contract

Contract Overview

Contract Amount: $52,245,585 ($52.2M)

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: $143.1K/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 $52.2 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract awarded to FedEx Supply Chain Distribution System, Inc. 2. Significant spending on business support services. 3. Potential for cost savings through competitive bidding. 4. Sector: Other (Business Support Services)

Value Assessment

Rating: fair

The contract value of $52.2M for mail manifesting services appears high for the described services. Benchmarking against similar contracts for business support services is recommended to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific award mechanism (BPA CALL) warrants further review to ensure maximum competition was achieved.

Taxpayer Impact: Taxpayer funds are being utilized for this contract. Ensuring competitive pricing and efficient service delivery is crucial for maximizing taxpayer value.

Public Impact

Veterans may experience improved mail processing efficiency. Taxpayer funds are allocated to essential administrative services. Potential impact on smaller businesses in the mail services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a support service.
Lack of specific performance metrics provided.
Potential for vendor lock-in with a single provider.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract limits cost overrun risk.

Sector Analysis

This contract falls under 'All Other Business Support Services,' a broad category. Benchmarks for similar mail manifesting or logistics support contracts are needed for a precise comparison.

Small Business Impact

The contract does not indicate specific set-asides for small businesses. Further analysis is needed to determine if small businesses had an opportunity to compete or participate as subcontractors.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. Reviewing performance reports and ensuring adherence to contract terms will be key to accountability.

Related Government Programs

All Other Business Support Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High dollar value for a support service.
Potential for uncompetitive pricing if competition was not robust.
Lack of detailed performance metrics.
Dependence on a single vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $52.2 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 $52.2 million.

What is the period of performance?

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

Is the $52.2M expenditure justified for mail manifesting services compared to industry standards?

Without specific service level agreements and detailed performance metrics, it is difficult to definitively justify the $52.2M expenditure. A thorough market analysis comparing this contract's pricing and scope to similar mail manifesting and logistics services procured by other federal agencies or large private sector organizations is necessary to determine if it represents fair market value.

What are the primary risks associated with this contract for the VA?

Key risks include potential overpayment if the price is not competitive, service disruptions if FedEx experiences issues, and a lack of flexibility if VA's needs change significantly. Dependence on a single vendor for a critical function like mail manifesting also poses a risk if that vendor's performance degrades or their pricing increases substantially in future solicitations.

How effectively does this contract support the VA's mission?

This contract supports the VA's mission by ensuring efficient and reliable processing of mail, which is crucial for communication with veterans and internal operations. However, the effectiveness is contingent on the service quality provided by FedEx and whether the cost represents an optimal use of resources that could be allocated to direct veteran 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: $52,245,585

Exercised Options: $52,245,585

Current Obligation: $52,245,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline