VA awards $54.2M contract for mail manifesting services to FedEx Supply Chain

Contract Overview

Contract Amount: $54,217,245 ($54.2M)

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: $148.5K/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 $54.2 million to FEDEX SUPPLY CHAIN DISTRIBUTION SYSTEM, INC. for work described as: MAIL MANIFESTING SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a BPA Call, indicating it's a call-off from a larger Blanket Purchase Agreement. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. Services are being delivered in Texas, with a duration of one year. 5. The contractor, FedEx Supply Chain Distribution System, Inc., is a significant player in logistics. 6. The NAICS code 561499 covers 'All Other Business Support Services', a broad category.

Value Assessment

Rating: good

The contract value of $54.2 million for one year of mail manifesting services appears reasonable given the scale of operations for a large agency like the Department of Veterans Affairs. Benchmarking against similar large-scale logistics and business support service contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost fluctuations. Without specific per-unit data or comparison to other VA contracts for similar services, a definitive value assessment 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 all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The use of a BPA Call suggests that the underlying BPA itself was likely competed, and this call-off further leverages that competitive framework.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and terms, potentially driving down costs and improving service quality.

Public Impact

Veterans and VA staff benefit from efficient and reliable mail manifesting services, crucial for administrative and healthcare operations. The services ensure accurate tracking and processing of mail, supporting the VA's mission delivery. The geographic impact is primarily within Texas, where the services are being performed. The contract supports jobs within the logistics and business support services sector, particularly at FedEx Supply Chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or KPIs in the provided data makes it difficult to assess service quality beyond the contractor's general reputation.
The broad NAICS code 'All Other Business Support Services' could encompass a wide range of activities, making it hard to pinpoint the exact scope and potential for cost overruns if not tightly managed.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm fixed-price contract type provides cost certainty for the government.
Contractor is a well-established logistics provider (FedEx Supply Chain), implying operational experience and capacity.
BPA Call structure can streamline future procurements if the underlying BPA is well-managed.

Sector Analysis

The Business Support Services sector, categorized under NAICS code 561499, encompasses a wide array of services that facilitate the operations of other businesses and government agencies. This includes mail preparation, document handling, and other administrative support functions. The market for these services is competitive, with numerous providers ranging from small specialized firms to large logistics conglomerates like FedEx. Federal spending in this area supports essential government functions, ensuring efficient communication and administrative processes. Comparable spending benchmarks would typically be found within broader logistics and administrative support service categories across various federal agencies.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, there are no direct subcontracting implications for small businesses mandated by this award. The primary contractor, FedEx Supply Chain, is a large entity, and while they may utilize small businesses in their supply chain, this contract does not appear to have a specific focus on small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. As a BPA Call, oversight may also be influenced by the management of the parent Blanket Purchase Agreement. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

General Services Administration (GSA) Schedules
Logistics and Supply Chain Management Services
Mail and Document Management Services
Department of Defense Mail Operations

Risk Flags

Potential for scope creep if 'All Other Business Support Services' is not tightly defined.
Dependence on a single large contractor could pose a risk if performance issues arise.
Lack of specific performance metrics in the provided data hinders immediate assessment of service quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $54.2 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 $54.2 million.

What is the period of performance?

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

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

FedEx Supply Chain Distribution System, Inc. has a significant history of performing logistics and supply chain services for both commercial and government entities. While specific details on past VA contracts for mail manifesting are not provided here, their broader experience in managing complex distribution networks, warehousing, and transportation suggests a strong capability. Government contract databases would typically show a history of awards, performance ratings, and any past performance issues. Their established infrastructure and operational expertise are generally considered positive indicators for fulfilling large-scale service contracts. Further analysis would involve reviewing their specific performance on similar federal contracts, including any reported issues or commendations.

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

Determining the precise market rate for mail manifesting services is complex due to the variability in scope, volume, technology used, and geographic location. This contract, valued at $54.2 million for one year, is for a large-scale operation supporting the Department of Veterans Affairs. Without specific per-unit cost data (e.g., cost per piece, cost per pound) or access to detailed pricing from competing bids, a direct comparison to market rates is challenging. However, the fact that it was awarded under full and open competition suggests that the price was deemed competitive among the bidders. Benchmarking against other large federal agencies' contracts for similar comprehensive logistics and mail handling services would be necessary for a more robust comparison.

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

Primary risks include potential service disruptions impacting VA operations, cost overruns if the scope is not well-defined or managed, and data security breaches related to mail content or recipient information. Mitigation strategies likely involve the firm fixed-price contract type, which shifts some cost risk to the contractor. The Department of Veterans Affairs would also implement oversight mechanisms, including performance monitoring, regular reviews, and defined service level agreements (SLAs) within the contract. The contractor's established reputation and operational capacity with FedEx Supply Chain serve as a mitigating factor against operational failures. Clear communication channels and defined escalation procedures are also crucial for addressing issues promptly.

How effective is the firm fixed-price contract type in ensuring value for money for this specific service?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For mail manifesting services, where the core tasks are predictable, FFP provides cost certainty for the VA, as the contractor assumes the risk of cost overruns. This encourages the contractor to operate efficiently to maximize profit. However, if the scope is poorly defined or unforeseen issues arise, the VA might not achieve the best value if the contractor is unable to adapt without significant change orders, or if the initial price was inflated to cover potential risks. The competitive nature of the award helps ensure the initial FFP was market-driven.

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

Historical spending patterns for mail manifesting services by the Department of Veterans Affairs would typically be available through federal procurement data systems like FPDS or USASpending.org. Analyzing this data would reveal the total amount spent on these services over previous fiscal years, the primary contractors utilized, and whether spending has been consistent, increasing, or decreasing. It would also indicate if this $54.2 million award represents a significant shift or is in line with previous investments. Understanding historical spending helps in assessing the long-term commitment to such services and identifying trends in contract values and durations.

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: $54,217,245

Exercised Options: $54,217,245

Current Obligation: $54,217,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline