VA awards $20.4M delivery order to Federal Express for nationwide shipping services

Contract Overview

Contract Amount: $20,440,000 ($20.4M)

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: $56.2K/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: LADSON, BERKELEY County, SOUTH CAROLINA, 29456

State: South Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20.4 million to FEDERAL EXPRESS CORPORATION for work described as: FED EX NGDS SHIPPING Key points: 1. Contract provides essential logistics support for VA operations. 2. Delivery order awarded under a broader indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. Pricing appears competitive given the scope of nationwide express delivery. 4. Limited competition noted, suggesting potential for better price discovery. 5. Performance period aligns with anticipated VA program needs. 6. Sector positioning is critical for maintaining healthcare supply chain integrity.

Value Assessment

Rating: good

The $20.4 million delivery order for express shipping services represents a significant investment by the VA. Benchmarking against similar federal contracts for logistics and courier services suggests that the firm-fixed-price structure is appropriate for predictable service delivery. While specific per-unit cost data is not provided, the overall value appears reasonable for nationwide, time-sensitive delivery requirements. The duration of the contract, spanning two years, allows for consistent service provision.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This delivery order was issued under a full and open competition after exclusion of sources, indicating that while the initial IDIQ contract may have had broader competition, this specific order had limited bidders. The exclusion of sources suggests a specific justification was made, potentially related to existing infrastructure or specialized capabilities. With only four bidders considered, the price discovery mechanism might be less robust than in a fully open competition with a larger pool of offerors.

Taxpayer Impact: The limited competition could mean taxpayers did not benefit from the lowest possible price achievable through maximum market participation. However, if the selected vendor offers superior performance or specialized services crucial for VA operations, the value proposition might still be strong.

Public Impact

Veterans will benefit from timely delivery of medical supplies, equipment, and pharmaceuticals. The Department of Veterans Affairs will receive reliable courier and express delivery services across the continental United States. Geographic impact is nationwide, ensuring support for VA facilities in all regions. Workforce implications are minimal for the VA, as the contractor handles the delivery services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future orders due to limited competition.
Dependence on a single vendor for critical express delivery services could pose a risk if performance falters.

Positive Signals

Federal Express is a well-established logistics provider with a proven track record.
Firm-fixed-price contract provides cost certainty for the VA.
Delivery order is part of a larger IDIQ contract, suggesting established framework and oversight.

Sector Analysis

The couriers and express delivery services sector is a vital component of the federal supply chain, supporting a wide range of agencies. The market is characterized by a few large, established players and numerous smaller niche providers. Federal spending in this sector is substantial, driven by the need for efficient and reliable movement of goods, documents, and equipment. This contract fits within the broader category of logistics and transportation services, essential for government operations.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific delivery order, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. This suggests the contract was not specifically set aside for small businesses, and Federal Express Corporation is a large business. There is no explicit information on subcontracting plans for small businesses within this delivery order, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this delivery order will likely fall under the existing framework of the parent IDIQ contract managed by the Department of Veterans Affairs. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of services as specified. Transparency is generally maintained through federal contract databases, though specific performance metrics and detailed cost breakdowns may not be publicly available. The VA's Office of Inspector General would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Express Government Services
USPS Federal Agency Mail Program
GSA Schedule 48 - Transportation, Delivery and Relocation Solutions

Risk Flags

Limited competition may impact price optimization.
Dependence on a single vendor for critical logistics.
Potential for scope creep if not managed tightly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20.4 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 $20.4 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 VA's historical spending on express delivery services reveals a consistent reliance on established logistics providers. Over the past five fiscal years, the VA has allocated significant funds annually to courier and shipping services, often through multiple contracts and delivery orders. While specific figures fluctuate based on agency-wide needs and program expansions, spending has generally ranged in the tens of millions of dollars per year. This $20.4 million award for Federal Express NGDS Shipping falls within the expected range of annual expenditures for such critical services, indicating a stable demand and established market for these logistics solutions within the VA.

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

Direct per-unit cost comparison for this Federal Express delivery order is challenging without granular data on the types and volumes of shipments. However, the overall contract value of $20.4 million for a 364-day duration suggests an average daily spend of approximately $56,000. Federal Express is a major player in the express delivery market, and their pricing is generally competitive, especially for large-volume federal contracts. Benchmarking against other federal agencies' contracts for similar express delivery services indicates that the VA's negotiated rates are likely in line with market standards, considering factors like speed, reliability, and geographic coverage. The firm-fixed-price nature provides cost certainty, but limits the ability to assess granular efficiency gains.

What are the key performance indicators (KPIs) for this contract, and how is performance monitored?

Key performance indicators (KPIs) for this Federal Express delivery order likely revolve around on-time delivery rates, package integrity, tracking accuracy, and customer service responsiveness. The Department of Veterans Affairs would typically establish specific metrics within the contract's Performance Work Statement (PWS). Monitoring would involve regular performance reviews, analysis of delivery data, and potentially user feedback from VA facilities receiving shipments. Failure to meet these KPIs could result in contractual remedies, including financial penalties or termination. The firm-fixed-price structure incentivizes Federal Express to meet these performance standards to ensure full payment.

What is the track record of Federal Express Corporation in fulfilling federal government contracts?

Federal Express Corporation (FedEx) has a long and extensive track record of fulfilling contracts with various U.S. federal government agencies, including the Department of Defense, Postal Service, and numerous civilian departments like the VA. They are a recognized leader in the global logistics and transportation industry, known for their extensive network, advanced tracking technology, and reliable service. Historical data from federal procurement databases generally shows FedEx as a high-performing contractor, often awarded significant contracts due to their capacity and established infrastructure. While any large contractor may encounter occasional performance issues, FedEx's overall history with government contracts is strong, suggesting a low risk of significant performance failure on this VA delivery order.

What is the potential risk associated with the limited competition for this delivery order?

The primary risk associated with the limited competition ('limited' category, with 4 bidders considered) for this delivery order is the potential for suboptimal pricing. When fewer bidders participate, the competitive pressure to offer the lowest possible price is reduced, which could lead to the government paying more than it might in a fully open competition. Additionally, limited competition might restrict the range of innovative solutions or service enhancements that could be brought to bear. While Federal Express is a capable provider, the lack of broader market engagement means the VA may not have explored all available options or secured the absolute best value proposition achievable through maximum competition.

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: $20,440,000

Exercised Options: $20,440,000

Current Obligation: $20,440,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC023

IDV Type: IDC

Timeline