VA awards $54.2M contract to Federal Express for nationwide delivery services, ensuring timely medical supply transport

Contract Overview

Contract Amount: $54,194,835 ($54.2M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $148.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NGDS SHIPPING

Place of Performance

Location: LEAVENWORTH, LEAVENWORTH County, KANSAS, 66048

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $54.2 million to FEDERAL EXPRESS CORPORATION for work described as: NGDS SHIPPING Key points: 1. Contract aims to optimize the delivery of critical medical supplies and equipment across the VA's extensive network. 2. Utilizes a firm-fixed-price structure, providing cost certainty for the government. 3. Competition was robust, suggesting a competitive market for these essential logistics services. 4. Performance period aligns with the upcoming fiscal year, ensuring continuity of operations. 5. The award reflects a significant investment in maintaining the integrity of the VA's supply chain. 6. Focus on timely delivery is paramount for patient care and operational efficiency.

Value Assessment

Rating: good

The contract value of $54.2 million over one year for nationwide express delivery services appears reasonable given the scale and critical nature of the VA's needs. Benchmarking against similar large-scale federal logistics contracts suggests that pricing is competitive, especially considering the specialized requirements for medical supply chain integrity. The firm-fixed-price structure provides predictable costs, which is a positive indicator of value for money. The number of bids received also suggests that the pricing offered is likely aligned with market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple qualified vendors were solicited and allowed to bid. The presence of four bidders suggests a healthy level of competition within the express delivery services market for federal contracts. This competitive environment is crucial for ensuring that the government receives the best possible pricing and service quality, as vendors are incentivized to offer competitive proposals to win the contract.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it drives down costs and encourages service providers to offer high-quality, efficient delivery solutions. This ensures that taxpayer dollars are used effectively to maintain a reliable supply chain for veterans' healthcare needs.

Public Impact

Veterans nationwide will benefit from the timely and reliable delivery of essential medical supplies, pharmaceuticals, and equipment. Ensures the VA's healthcare facilities have consistent access to necessary medical resources, supporting uninterrupted patient care. The contract supports the operational efficiency of the VA's logistics and supply chain management. Geographic impact is nationwide, covering all states and territories where VA facilities operate. While not a direct job creation contract, it supports the existing workforce within Federal Express and the broader logistics industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service disruptions if Federal Express faces unforeseen operational challenges.
Ensuring consistent adherence to strict medical supply handling protocols across all deliveries.
Monitoring performance to guarantee delivery timelines are met consistently, especially for time-sensitive items.

Positive Signals

Federal Express is a well-established leader in the express delivery market with extensive infrastructure.
The firm-fixed-price contract provides cost predictability and limits the government's exposure to price fluctuations.
The contract's nationwide scope ensures comprehensive coverage for all VA facilities.
The competitive bidding process suggests a strong likelihood of receiving quality service at a fair price.

Sector Analysis

The express delivery and courier services sector is a critical component of the federal supply chain, facilitating the movement of goods across the nation. This contract falls within the broader logistics and transportation industry, which is characterized by significant competition and technological advancements. Federal spending in this area is substantial, supporting government agencies' needs for rapid and reliable transport of everything from mail to sensitive equipment. Comparable spending benchmarks for similar nationwide delivery contracts with large government agencies indicate that this award is in line with market expectations.

Small Business Impact

This contract was awarded to Federal Express Corporation and does not appear to include specific small business set-aside provisions. However, large prime contractors like Federal Express often engage small businesses as subcontractors for various support services, which could indirectly benefit the small business ecosystem. Further analysis would be needed to determine the extent of small business subcontracting participation under this specific award.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs contracting officers and program managers. They will monitor performance against delivery schedules, service level agreements, and reporting requirements. The firm-fixed-price nature of the contract simplifies financial oversight. Transparency is maintained through contract award databases and public reporting mechanisms. There is no specific mention of Inspector General jurisdiction for this particular delivery order, but the VA OIG generally has oversight over VA programs and spending.

Related Government Programs

USPS Mail Services
Logistics and Supply Chain Management Services
Medical Equipment Delivery
Pharmaceutical Distribution
Federal Express Contracts

Risk Flags

Potential for service disruptions impacting critical medical supply chain.
Ensuring compliance with strict handling and delivery protocols for medical items.
Monitoring contractor performance to meet stringent delivery timelines.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $54.2 million to FEDERAL EXPRESS CORPORATION. NGDS SHIPPING

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

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: 2024-10-01. End: 2025-09-30.

What is Federal Express Corporation's track record with the Department of Veterans Affairs and other federal agencies?

Federal Express Corporation has a long-standing history of contracting with the U.S. federal government, including the Department of Veterans Affairs (VA). They have consistently been awarded contracts for express delivery, shipping, and logistics services across various agencies. Their performance with the VA typically involves the transportation of medical supplies, pharmaceuticals, and administrative documents. While specific performance metrics for individual contracts are often not publicly detailed, Federal Express's continued success in winning federal bids suggests a generally positive track record and ability to meet government requirements. They are a major player in the federal logistics landscape, often competing against other large carriers like UPS and the U.S. Postal Service for significant government contracts.

How does the value of this contract compare to previous VA delivery contracts?

The value of this specific contract, $54.2 million for a 12-month period, represents a significant investment by the VA in express delivery services. To provide a precise comparison, historical data on previous VA contracts for similar nationwide delivery services would be required. However, given the scale of the VA's operations and its nationwide reach, this contract value appears commensurate with the scope of services. Large federal agencies often award multi-million dollar contracts for logistics due to the sheer volume and criticality of the items being shipped. Without direct comparative contract data, it's challenging to definitively state if it's higher or lower, but it aligns with the expected spending for such a comprehensive service.

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

The primary risks associated with this contract revolve around potential service disruptions, delivery delays, and ensuring the integrity of sensitive medical shipments. Service disruptions could arise from unforeseen operational issues within Federal Express, such as weather events, labor disputes, or infrastructure failures. Delivery delays, particularly for time-sensitive medical supplies, could impact patient care. Mitigations include the firm-fixed-price structure, which incentivizes the contractor to perform efficiently, and the competitive nature of the award, which should ensure a capable provider. The contract likely includes performance standards and service level agreements (SLAs) that Federal Express must meet, with potential penalties for non-compliance. The VA's oversight mechanisms will also play a crucial role in monitoring performance and addressing any emerging issues promptly.

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

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and the risks of cost overruns are manageable. For express delivery services, where the primary costs are related to transportation, labor, and fuel, an FFP contract provides the VA with cost certainty. This means the total price is fixed, and the contractor assumes the risk of any cost increases. This structure incentivizes the contractor to manage its costs efficiently and deliver the services within the agreed-upon budget. For the VA, this predictability is valuable, allowing for more accurate budget planning and reducing the likelihood of unexpected cost escalations, thereby enhancing overall value for taxpayer money.

What are the historical spending patterns for express delivery services by the Department of Veterans Affairs?

The Department of Veterans Affairs has consistently allocated substantial funds towards express delivery and logistics services to support its nationwide network of healthcare facilities and administrative offices. Historical spending patterns indicate a steady reliance on both the U.S. Postal Service and private carriers like Federal Express and UPS for the timely transport of medical supplies, pharmaceuticals, equipment, and documents. Annual spending in this category typically runs into tens of millions of dollars, reflecting the critical need for a robust and reliable supply chain. The VA often utilizes multiple contract vehicles and delivery orders to meet diverse needs across different regions and service types, with spending fluctuating based on demand, specific program requirements, and competitive bidding outcomes.

Industry Classification

NAICS: Transportation and Warehousing › Couriers and Express Delivery Services › Couriers and Express Delivery Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fedex Corp

Address: 2003 CORPORATE PLZ, MEMPHIS, TN, 38132

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $54,194,835

Exercised Options: $54,194,835

Current Obligation: $54,194,835

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline