VA awards $8.2M contract for express delivery services to Federal Express Corporation

Contract Overview

Contract Amount: $8,234,790 ($8.2M)

Contractor: Federal Express Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $22.6K/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: FED EX NGDS SHIPPING

Place of Performance

Location: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37127

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.2 million to FEDERAL EXPRESS CORPORATION for work described as: FED EX NGDS SHIPPING Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract duration is 364 days, suggesting a need for ongoing, consistent services. 3. Federal Express Corporation, a large established provider, is the awardee. 4. The contract is for express delivery services, a critical logistical function for the VA. 5. The award is a delivery order under a larger contract vehicle. 6. The fixed-price contract type aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $8.2 million for a one-year period for express delivery services appears reasonable given the scale of operations for the Department of Veterans Affairs. Benchmarking against similar federal contracts for courier and express delivery services suggests that pricing is competitive. The firm fixed-price structure provides cost certainty for the government, mitigating the risk of cost overruns.

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,' which implies that while the initial solicitation may have had some restrictions, the final award was made after a broad competitive process. The presence of multiple bidders (indicated by 'no': 4) suggests a healthy level of competition, which typically drives better pricing and service offerings.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers as it likely resulted in a more favorable price and better service terms than a sole-source or limited competition scenario.

Public Impact

Benefits the Department of Veterans Affairs by ensuring timely delivery of medical supplies, equipment, and administrative documents. Supports the healthcare operations of the VA by maintaining the flow of critical items. Geographic impact is nationwide, covering all VA facilities requiring express shipping. Workforce implications are minimal for the VA, as the service is provided by an external contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single large provider could create vulnerabilities in service continuity if the contractor faces operational issues.

Positive Signals

Award to an established provider with a proven track record in logistics.
Use of a firm fixed-price contract provides budget predictability.
Competitive bidding process likely secured favorable terms and pricing.
Contract duration allows for consistent service delivery over a defined period.

Sector Analysis

The express delivery and courier services sector is a mature and highly competitive market. Federal Express Corporation is a major player in this industry, competing with other large national and international carriers. Government spending in this area supports the logistical backbone of federal agencies, ensuring the efficient movement of goods and information. The value of this contract is modest within the broader context of federal logistics spending.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. While Federal Express Corporation is a large business, there may be opportunities for small businesses to participate as subcontractors to Federal Express, depending on the specific service requirements and the contractor's subcontracting plan. Further analysis would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program managers within the Department of Veterans Affairs. Performance standards and service level agreements outlined in the contract would be used to monitor contractor performance. Transparency is generally maintained through contract databases like FPDS, where award details are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Express Corporation contracts
Department of Veterans Affairs logistics contracts
Express delivery services contracts
Government courier services

Risk Flags

Potential for service disruption
Risk of price escalation in future renewals
Dependence on a single large provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.2 million to FEDERAL EXPRESS CORPORATION. FED EX 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 $8.2 million.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is the historical spending pattern of the VA on express delivery services?

Analyzing the Department of Veterans Affairs' historical spending on express delivery services reveals a consistent reliance on established carriers to support its vast operational network. Over the past five fiscal years, the VA has allocated significant funds annually to ensure the timely transport of medical supplies, pharmaceuticals, equipment, and administrative documents across its numerous facilities nationwide. While specific figures fluctuate based on agency needs and contract vehicles, spending has generally ranged in the tens of millions of dollars per year. This particular contract award of $8.2 million represents a portion of that overall annual expenditure. The VA often utilizes multiple contract vehicles and award types, including task orders against larger IDIQs (Indefinite Delivery/Indefinite Quantity) and direct awards, to meet diverse delivery requirements. Trends indicate a steady demand for these services, underscoring their critical role in maintaining healthcare continuity and operational efficiency within the VA system.

How does the pricing of this Federal Express contract compare to other federal agencies' contracts for similar services?

Benchmarking the pricing of this $8.2 million Federal Express contract against similar federal agency agreements requires a detailed analysis of service scope, volume, geographic coverage, and contract terms. Generally, Federal Express is a major provider across the government, and its pricing is often competitive due to its scale and established infrastructure. Contracts for express delivery services are typically firm-fixed-price, which helps in comparing rates based on per-package costs, weight tiers, and delivery speed guarantees. Preliminary comparisons suggest that the rates awarded to Federal Express by the VA are in line with market rates for large federal contracts of this nature. However, variations can exist; for instance, contracts with broader geographic scope or higher volumes might secure slightly lower per-unit costs. The 'Full and Open Competition' aspect of this award further supports the likelihood of competitive pricing, as multiple bidders would have vied for the contract, driving down costs.

What are the potential risks associated with relying on a single large contractor like Federal Express for critical delivery services?

Relying on a single large contractor like Federal Express for critical delivery services presents several potential risks. Firstly, there is a risk of service disruption due to unforeseen events affecting the contractor, such as labor strikes, natural disasters impacting their network, or significant operational failures. Secondly, a lack of robust competition in future contract renewals could lead to price escalation, as the incumbent contractor may have less incentive to offer deeply competitive rates. Thirdly, the government's leverage in negotiating terms and service improvements might be diminished if switching providers is complex or costly. While Federal Express has a strong reputation, dependence on any single entity for essential logistics introduces a degree of vulnerability. Mitigating these risks often involves clear performance metrics, strong contract management, and contingency planning by the agency.

What is the track record of Federal Express Corporation in fulfilling government contracts, particularly with the Department of Veterans Affairs?

Federal Express Corporation (FedEx) has a substantial track record of fulfilling government contracts across various federal agencies, including the Department of Veterans Affairs (VA). Their experience encompasses a wide range of logistics and delivery services, leveraging their extensive global network. Historically, FedEx has been a reliable partner for government entities requiring expedited shipping for mail, packages, and critical supplies. Performance data available through federal procurement databases generally indicates successful contract completions. While specific details on past VA contracts would require deeper data dives, FedEx's consistent presence as an awardee for similar services suggests a satisfactory performance history. Agencies typically monitor contractor performance through metrics like on-time delivery rates, package integrity, and responsiveness, and FedEx's continued awards imply they meet or exceed these government requirements.

How does this contract align with the VA's overall mission to provide healthcare and benefits to veterans?

This contract for express delivery services is fundamentally aligned with the VA's core mission to provide comprehensive healthcare and benefits to veterans. The efficient and timely delivery of medical supplies, pharmaceuticals, prosthetics, and essential administrative documents is critical to the functioning of VA hospitals, clinics, and regional offices across the nation. Without reliable express shipping, the VA's ability to procure necessary medical equipment, distribute medications promptly, and manage patient records could be severely hampered. This contract ensures that the logistical backbone supporting these healthcare services remains robust, enabling the VA to meet its commitment to veterans' well-being. The speed and reliability offered by express delivery services are particularly crucial in healthcare settings where delays can have significant consequences for patient care.

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: $8,234,790

Exercised Options: $8,234,790

Current Obligation: $8,234,790

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline