VA awards $55.6M contract for mail manifesting services to FedEx Supply Chain Distribution System, Inc

Contract Overview

Contract Amount: $55,630,367 ($55.6M)

Contractor: Fedex Supply Chain Distribution System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $152.8K/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 $55.6 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 firm-fixed-price type, which shifts cost risk to the contractor. 3. Services are for mail manifesting, a critical component of logistics and supply chain management. 4. The contract duration is one year, indicating a need for ongoing, short-term support. 5. The awardee, FedEx Supply Chain Distribution System, Inc., is a significant player in the logistics sector. 6. The contract is a BPA Call, suggesting it's an order against a pre-existing Blanket Purchase Agreement.

Value Assessment

Rating: good

The contract value of $55.6 million for one year of mail manifesting services appears to be within a reasonable range for a large federal agency like the VA. Benchmarking against similar contracts for comprehensive logistics and supply chain support would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for cost control when requirements are well-defined. Without specific per-unit data or detailed service level agreements, a definitive value assessment is challenging, but the competitive award process is a positive indicator.

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 bids. The number of bidders is not specified, but the competitive nature of the award process suggests that the VA sought to obtain the best value through market forces. This approach typically leads to more competitive pricing and a wider range of potential solutions compared to sole-source or limited competition procurements.

Taxpayer Impact: Taxpayers benefit from a competitive process as it generally drives down costs and ensures that the government receives services at a fair market price, maximizing the value of federal dollars spent.

Public Impact

Veterans will benefit from efficient and reliable mail manifesting services, which supports the delivery of essential supplies and communications. The Department of Veterans Affairs will receive critical support for its mailroom operations, ensuring smooth processing of outgoing mail. The geographic impact is primarily within Arizona (ST: AZ, SN: ARIZONA), where the services are likely being performed or managed. Workforce implications may include employment opportunities within FedEx Supply Chain Distribution System, Inc. for roles related to logistics and mail processing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased shipping costs if FedEx's market dominance leads to less aggressive pricing in future renewals.
Dependence on a single large contractor for a critical operational function could pose a risk if service levels degrade.
Limited visibility into the specific operational efficiencies gained from this contract without detailed performance metrics.

Positive Signals

Award to a well-established logistics provider like FedEx suggests a high likelihood of reliable service delivery.
Firm-fixed-price contract structure provides cost certainty for the VA, mitigating budget risks.
Full and open competition indicates that multiple vendors had the opportunity to bid, likely resulting in a competitive price.

Sector Analysis

The mail manifesting services fall under the broader Business Support Services sector, specifically within the 'All Other Business Support Services' NAICS code (561499). This sector encompasses a wide range of services that facilitate business operations, including logistics, mailing, and administrative support. The contract value of $55.6 million is substantial, reflecting the scale of operations for a federal agency like the VA. Comparable spending benchmarks would involve analyzing other large federal contracts for mailroom management, logistics coordination, and supply chain services, which can range from tens to hundreds of millions of dollars annually depending on scope and agency size.

Small Business Impact

This contract was not set aside for small businesses (SS: false, SB: false). The awardee, FedEx Supply Chain Distribution System, Inc., is a large corporation. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This means that the primary contract will be executed by the large business, and opportunities for small business participation would likely depend on FedEx's internal subcontracting policies or voluntary initiatives, rather than a contractual mandate.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract specialist within the Department of Veterans Affairs. Performance monitoring would likely involve reviewing service level agreements, delivery timelines, and invoice accuracy. Accountability measures are inherent in the firm-fixed-price contract type, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is generally maintained through contract databases like FPDS, where award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Mail Management Services
Logistics and Supply Chain Management Contracts
Department of Veterans Affairs Procurement
Business Support Services Contracts
Blanket Purchase Agreements (BPAs)

Risk Flags

Contract awarded to a single large vendor.
Potential for service disruption if contractor faces operational issues.
Lack of explicit small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $55.6 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 $55.6 million.

What is the period of performance?

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

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

Analyzing historical spending requires access to detailed procurement data over multiple fiscal years. Without that specific data, we can infer that the VA, as a large agency with significant logistical needs, likely has consistent requirements for mail manifesting services. The current award of $55.6 million for a one-year period suggests a substantial and ongoing need. Past contracts might have been with the same or different vendors, potentially under different contract vehicles (e.g., GSA schedules, other BPAs, or individual solicitations). Understanding historical spending would involve looking at the total amount obligated annually for these services, the number of contracts awarded, and the primary awardees to identify trends, potential cost increases or decreases over time, and the evolution of service requirements.

How does the per-unit cost of this contract compare to industry benchmarks for mail manifesting services?

The provided data does not include specific per-unit cost metrics (e.g., cost per piece of mail manifested, cost per pound, or cost per shipment). Therefore, a direct comparison to industry benchmarks is not possible with the current information. To perform such an analysis, one would need to obtain detailed pricing breakdowns from the contract, such as rates for different types of mail, volume tiers, or specific service add-ons. Industry benchmarks for mail manifesting can vary significantly based on the volume of mail, the complexity of the manifesting system used, the level of automation, and the geographic location of the service provider. Generally, larger volumes and higher automation tend to reduce per-unit costs. Without these details, assessing the value-for-money on a per-unit basis remains speculative.

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. Their track record in performing federal contracts is generally extensive, covering a wide range of logistics, shipping, and supply chain management services for various government agencies. While specific performance data for this exact 'mail manifesting services' contract is not yet available as it's a new award, FedEx's overall reputation and experience in handling large-scale, time-sensitive logistics operations suggest a strong capability. Federal procurement databases would typically show past performance ratings, contract values, and types of services rendered for FedEx and its subsidiaries. Agencies often rely on past performance evaluations as a key factor in award decisions, indicating that FedEx likely met or exceeded expectations in previous government engagements.

What are the potential risks associated with relying on a single large contractor for mail manifesting 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 in the future could be costly and disruptive. Secondly, service disruptions, whether due to operational issues, labor disputes, or unforeseen events affecting the contractor, could significantly impact the VA's ability to manage its mail and communications. Thirdly, a lack of ongoing competition could potentially lead to price increases in future contract renewals if the VA does not actively re-compete the requirement. Finally, there's a risk that the contractor might deprioritize the VA's account if it represents a smaller portion of their overall business compared to other clients, potentially affecting service quality or responsiveness.

How does the $55.6 million contract value compare to the overall IT or Defense spending of the VA?

The $55.6 million contract value for mail manifesting services is a significant amount for a specific operational support function. However, when compared to the Department of Veterans Affairs' overall budget, particularly its IT and Defense-related spending, it represents a relatively small fraction. The VA's annual budget typically runs into the hundreds of billions of dollars, with substantial allocations for healthcare services, medical research, and large-scale IT modernization projects (e.g., electronic health records). IT spending alone can easily reach billions of dollars annually. Therefore, while $55.6 million is a considerable sum for logistics support, it is likely a minor component within the VA's total expenditure landscape, especially when contrasted with major program investments in areas like technology infrastructure or defense readiness.

What are the key performance indicators (KPIs) likely used to measure the success of this contract?

Key Performance Indicators (KPIs) for a mail manifesting services contract would focus on efficiency, accuracy, timeliness, and cost-effectiveness. Likely KPIs include: 'On-time manifesting rate,' measuring the percentage of mail processed and manifested by the deadline; 'Manifest accuracy rate,' ensuring all items are correctly recorded and accounted for; 'Turnaround time,' the average time taken from mail receipt to manifest completion; 'Error rate,' tracking any discrepancies or mistakes in the manifesting process; and 'Cost per unit processed,' monitoring the efficiency of the service delivery relative to volume. The VA would also likely track 'Customer satisfaction' and 'Compliance with security and handling procedures.' These KPIs would be crucial for evaluating the contractor's performance against the contract's requirements and ensuring value for money.

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: $55,630,367

Exercised Options: $55,630,367

Current Obligation: $55,630,367

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C77020A0009

IDV Type: BPA

Timeline