VA awards $21.3M contract to Federal Express for nationwide delivery services

Contract Overview

Contract Amount: $21,279,388 ($21.3M)

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: $58.5K/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: HINES, COOK County, ILLINOIS, 60141

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $21.3 million to FEDERAL EXPRESS CORPORATION for work described as: FED EX NGDS SHIPPING Key points: 1. Contract aims to ensure timely delivery of critical supplies and documents. 2. Federal Express's extensive network is well-suited for nationwide logistics. 3. Pricing appears competitive given the scope of services. 4. Performance will be monitored through delivery metrics and service level agreements. 5. This contract supports the VA's mission to provide healthcare and benefits. 6. The firm-fixed-price structure shifts some cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $21.3 million over two years for nationwide delivery services appears reasonable when benchmarked against similar large-scale logistics contracts. Federal Express is a major player in the industry, and their pricing is generally competitive for the services offered. The firm-fixed-price nature of the contract provides cost certainty for the VA, although it may limit flexibility if delivery needs change significantly. The specific services required, such as express delivery for medical supplies and documents, justify the investment.

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 vendors were likely considered. The presence of four bidders (no=4) suggests a healthy level of competition for this service. A competitive bidding process generally leads to better price discovery and ensures that the government receives services at a fair market price. The specific details of the bidding process would provide further insight into the intensity of the competition.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging high-quality service delivery from multiple providers.

Public Impact

Veterans will benefit from timely delivery of essential medical supplies, prescriptions, and important benefit-related documents. The contract ensures the continuity of critical logistics services across the United States. Delivery services will impact all VA facilities and beneficiaries nationwide. The contract supports jobs within the courier and express delivery services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service disruptions if Federal Express experiences network-wide issues.
Reliance on a single large carrier could limit flexibility for urgent, specialized delivery needs.

Positive Signals

Federal Express's established infrastructure and experience in handling large volumes of shipments.
The contract's firm-fixed-price nature provides budget predictability for the VA.
Nationwide coverage ensures consistent service delivery across all VA locations.

Sector Analysis

The courier and express delivery services sector is a mature and highly competitive market dominated by a few large players like Federal Express, UPS, and DHL. This contract falls within the broader logistics and transportation industry, which is essential for government operations. The market size for such services is substantial, with significant spending by both government and commercial entities. This award represents a portion of the VA's overall spending on essential support services.

Small Business Impact

This contract was awarded to Federal Express Corporation and does not appear to have a small business set-aside component (sb=false). While Federal Express is a large business, they may utilize small businesses for subcontracting opportunities within their extensive logistics network. The impact on the small business ecosystem would depend on the extent to which Federal Express engages in subcontracting with small, disadvantaged businesses for specific delivery routes or specialized services.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and contract specialists within the Department of Veterans Affairs. Performance metrics, delivery confirmations, and service level agreement adherence will be key indicators for monitoring. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule (FSS) contracts for logistics and transportation
Department of Defense (DoD) shipping and mail services contracts
US Postal Service (USPS) agreements for mail delivery

Risk Flags

Potential for service disruption impacting critical medical supply chain.
Reliance on a single large carrier may limit flexibility.
Data security and privacy concerns for sensitive patient information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $21.3 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 $21.3 million.

What is the period of performance?

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

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 various U.S. federal agencies, including the Department of Veterans Affairs (VA). They have been awarded numerous contracts for shipping, logistics, and express delivery services. Their performance with the VA typically involves delivering medical supplies, pharmaceuticals, and official documents to healthcare facilities and beneficiaries nationwide. While specific performance metrics for individual contracts are often proprietary, Federal Express generally maintains a strong reputation for reliability and efficiency in the federal space. Their extensive infrastructure and experience make them a frequent choice for government logistics needs. Past performance reviews and contract close-outs would provide more granular detail on their specific track record with the VA.

How does the per-unit cost of this contract compare to similar VA delivery contracts?

Determining an exact per-unit cost comparison for this contract is challenging without access to detailed service breakdowns and specific delivery volumes. The contract is a firm-fixed-price award for a broad range of nationwide delivery services, encompassing various types of shipments and delivery speeds. However, given that Federal Express is a major carrier and the contract was awarded through full and open competition, the pricing is likely benchmarked against market rates for express and standard delivery services. The VA likely negotiated rates that are competitive within the industry, considering the scale and scope of the services. Benchmarking would typically involve comparing the average cost per package or per mile against similar contracts awarded by the VA or other agencies to large logistics providers for comparable service levels and geographic coverage.

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

The primary risks associated with this contract for the VA include potential service disruptions due to unforeseen events affecting Federal Express's network (e.g., weather, labor disputes, or system outages), which could delay critical deliveries of medical supplies or patient information. Another risk is the potential for price increases in future contract renewals if competition diminishes or operational costs rise significantly for the contractor. There's also a risk related to data security and privacy if sensitive patient information is transmitted or handled during the delivery process. Finally, over-reliance on a single large provider might limit the VA's flexibility to adapt to rapidly changing logistical needs or to leverage newer, potentially more cost-effective solutions from smaller providers.

How effective is Federal Express's network in meeting the VA's diverse delivery needs across the country?

Federal Express operates one of the most extensive and sophisticated logistics networks globally, which is generally highly effective in meeting diverse delivery needs across the United States. Their network includes a vast fleet of aircraft, vehicles, and sorting facilities, enabling rapid and reliable delivery to virtually all geographic locations. For the VA, this means they can likely handle the delivery of a wide range of items, from time-sensitive pharmaceuticals and medical equipment to routine documents and supplies, to urban centers, rural clinics, and remote areas. The effectiveness is further enhanced by their tracking capabilities and established service level agreements, which the VA can leverage for performance monitoring. However, extreme weather events or specific logistical challenges in very remote areas could still pose limitations.

What is the historical spending trend for similar delivery services by the VA?

Historical spending by the VA on courier and express delivery services has been substantial, reflecting the agency's vast operational footprint and critical need for timely logistics. While specific figures fluctuate annually based on agency priorities and contract awards, the VA consistently relies on external carriers to support its nationwide network of hospitals, clinics, and administrative offices. Spending in this category typically includes contracts for medical supply chain logistics, prescription delivery, and general document transport. The trend has generally been towards consolidating services where possible to leverage economies of scale, often through large, multi-year contracts with major carriers like Federal Express, UPS, or the USPS. Spending may also increase during public health emergencies or when expanding telehealth services that require remote delivery of supplies.

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: $21,279,388

Exercised Options: $21,279,388

Current Obligation: $21,279,388

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline