FedEx Ground contract for FY26 delivery services awarded to Federal Express Corporation for $22.8M

Contract Overview

Contract Amount: $22,832 ($22.8K)

Contractor: Federal Express Corporation

Awarding Agency: Railroad Retirement Board

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $63/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FED EX GROUND FOR FS FY26

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60611

State: Illinois Government Spending

Plain-Language Summary

Railroad Retirement Board obligated $22,831.59 to FEDERAL EXPRESS CORPORATION for work described as: FED EX GROUND FOR FS FY26 Key points: 1. The contract value represents a significant investment in essential delivery services for the Railroad Retirement Board. 2. Competition dynamics suggest a robust bidding process, potentially leading to favorable pricing. 3. The firm fixed-price structure mitigates cost overrun risks for the government. 4. Performance is benchmarked against industry standards for courier and express delivery. 5. This contract positions the agency to leverage established logistics networks. 6. The duration of the contract allows for consistent service delivery over the specified period.

Value Assessment

Rating: good

The contract value of $22.8 million for a 364-day delivery service contract appears reasonable when considering the scale and scope of federal logistics needs. Benchmarking against similar contracts for express delivery services across federal agencies would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract helps control costs, but detailed analysis of the per-unit delivery costs compared to market rates is necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while sources were initially excluded, the final award was made through a competitive process. With 3 bidders participating, the level of competition appears adequate to drive price discovery and ensure a fair market price. This suggests that the agency sought multiple proposals to identify the most cost-effective solution.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition scenario. Multiple bids generally lead to better value and reduced risk of overpayment.

Public Impact

Federal employees and beneficiaries of the Railroad Retirement Board will benefit from reliable and timely delivery of essential documents and packages. The contract ensures the continuity of critical mail and package delivery services for the agency's operations. Services are primarily focused on Illinois, where the agency is located, but may extend to national distribution depending on operational needs. The contract supports jobs within the logistics and transportation sector through Federal Express Corporation's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased delivery costs if fuel prices or operational expenses rise significantly beyond projections.
Dependence on a single large carrier could pose risks if service disruptions occur.
Ensuring compliance with all delivery timelines and service level agreements requires ongoing monitoring.

Positive Signals

Award to a well-established carrier with a proven track record in logistics.
Firm fixed-price contract provides cost certainty for the government.
Competitive bidding process likely secured favorable pricing.
Contract duration allows for stable service provision.

Sector Analysis

The courier and express delivery services sector is a critical component of the broader transportation and logistics industry, facilitating the movement of goods and information. Federal spending in this sector supports government operations by ensuring timely delivery of mail, packages, and sensitive documents. The market is characterized by large, established players like FedEx and UPS, as well as numerous smaller regional and specialized providers. This contract fits within the government's need for reliable, expedited shipping solutions, often competing with or complementing postal services.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While Federal Express Corporation is a large business, the subcontracting opportunities for small businesses are not explicitly detailed in this award summary. The impact on the small business ecosystem would depend on whether Federal Express utilizes small business subcontractors for any portion of the services required under this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Railroad Retirement Board's contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms and delivery order requirements, with performance metrics likely tied to successful and timely deliveries. Transparency is facilitated through federal contract databases where such awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule contracts for shipping and logistics
Department of Defense mail and transportation contracts
US Postal Service contracts for specific delivery needs

Risk Flags

Potential for service disruption impacting government operations.
Reliance on a single large carrier may limit flexibility.
Cost escalation risks if market conditions change significantly.

Frequently Asked Questions

What is this federal contract paying for?

Railroad Retirement Board awarded $22,831.59 to FEDERAL EXPRESS CORPORATION. FED EX GROUND FOR FS FY26

Who is the contractor on this award?

The obligated recipient is FEDERAL EXPRESS CORPORATION.

Which agency awarded this contract?

Awarding agency: Railroad Retirement Board (Railroad Retirement Board).

What is the total obligated amount?

The obligated amount is $22,831.59.

What is the period of performance?

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

What is the historical spending trend for delivery services by the Railroad Retirement Board?

Analyzing historical spending data for the Railroad Retirement Board (RRB) on delivery and courier services is crucial for understanding the context of the $22.8 million FY26 contract. Without specific historical data for the RRB, we can infer general trends. Federal agencies increasingly rely on private sector logistics providers for efficiency and specialized services, often moving away from traditional postal services for time-sensitive or high-volume needs. Spending in this category typically fluctuates based on agency operational demands, policy changes, and the availability of competitive contract vehicles. A year-over-year comparison of contract values, number of awards, and types of services procured would reveal if this $22.8 million award represents an increase, decrease, or stable level of investment in delivery services for the RRB. It's also important to consider if previous contracts were awarded through similar competitive processes or if there have been shifts in procurement strategies.

How does the per-delivery cost under this contract compare to industry benchmarks?

Determining the precise per-delivery cost benchmark for this Federal Express Ground contract requires detailed operational data not fully available in the summary. The contract is for a broad delivery service over a year, likely encompassing various package sizes, weights, and delivery distances within the specified region. To benchmark, one would need to estimate the total number of deliveries anticipated and divide the total contract value ($22.8 million) by this estimate. This estimated per-delivery cost could then be compared to average per-delivery costs reported by industry analysts for similar services (e.g., ground parcel delivery) offered by major carriers. Factors such as delivery density, service level agreements (e.g., standard vs. expedited ground), and geographic coverage significantly influence per-delivery costs. A higher-than-average per-delivery cost might indicate premium service, specialized handling, or less competitive pricing, while a lower cost could suggest efficiency or aggressive bidding.

What are the specific risks associated with relying on FedEx Ground for federal agency deliveries?

Relying on FedEx Ground, or any single large carrier, for federal agency deliveries presents several potential risks. Firstly, service disruptions due to weather events, labor disputes, or operational failures at FedEx could significantly impact the agency's ability to receive or send critical mail and packages, potentially delaying essential government functions. Secondly, price increases in future contract renewals could occur, especially if competition diminishes or if FedEx faces increased operational costs (e.g., fuel surcharges). Thirdly, data security and privacy risks are inherent in shipping sensitive government information; while carriers have robust security protocols, breaches or mishandling remain a concern. Finally, dependence on one provider might limit the agency's flexibility to adapt to changing needs or to leverage more cost-effective solutions from other providers if they emerge.

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

Federal Express Corporation (FedEx) has a long and extensive track record of fulfilling contracts with various U.S. federal government agencies. As one of the largest global logistics providers, FedEx routinely handles significant volumes of mail and package delivery for defense, civilian, and intelligence agencies. Their experience typically includes managing complex supply chains, adhering to strict security protocols for sensitive materials, and meeting demanding delivery timelines. Government contracts often involve specific reporting requirements, compliance with federal regulations (like the Trade Agreements Act), and performance metrics that FedEx is accustomed to meeting. While specific performance details for individual contracts vary, FedEx's sustained presence as a major government contractor suggests a generally reliable capability to meet the logistical needs of federal entities.

How does the contract's firm fixed-price (FFP) structure benefit the Railroad Retirement Board?

The Firm Fixed-Price (FFP) contract structure offers significant benefits to the Railroad Retirement Board (RRB) by providing cost certainty and mitigating financial risk. Under an FFP agreement, the total price of the contract is fixed and not subject to adjustment based on the contractor's cost experience in performing the work. This means the RRB knows the exact amount it will pay for the delivery services, regardless of whether FedEx Ground incurs higher-than-expected operational costs (e.g., fuel, labor). This predictability is invaluable for budget planning and financial management. The burden of cost control and managing unforeseen expenses rests entirely with the contractor, incentivizing FedEx to operate efficiently. The primary risk for the RRB under an FFP contract is that if FedEx significantly under-bids or faces unexpected cost increases, they might seek to reduce service quality or potentially default, though this is less common with established providers like FedEx.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

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: $22,832

Exercised Options: $22,832

Current Obligation: $22,832

Actual Outlays: $9,008

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71117DC001

IDV Type: IDC

Timeline