DoD's $163M Civil Reserve Air Fleet Contract Awarded to Federal Express for Air Transportation Services
Contract Overview
Contract Amount: $163,281,715 ($163.3M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2017-10-01
End Date: 2018-09-30
Contract Duration: 364 days
Daily Burn Rate: $448.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Transportation
Official Description: IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES
Place of Performance
Location: MEMPHIS, SHELBY County, TENNESSEE, 38118
Plain-Language Summary
Department of Defense obligated $163.3 million to FEDERAL EXPRESS CORPORATION for work described as: IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. Significant contract value for essential air transport services. 2. Federal Express is a major player, indicating potential market concentration. 3. Fixed Price with Economic Price Adjustment introduces some cost fluctuation risk. 4. The contract supports critical Department of Defense logistics operations.
Value Assessment
Rating: good
The contract value of $163.3M over one year appears reasonable for large-scale air transportation services, especially considering the specialized nature of supporting the Civil Reserve Air Fleet. Benchmarking against similar large-volume, long-term air cargo contracts would provide further context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. The use of a delivery order mechanism within a larger framework likely allowed for competitive bidding on specific service needs.
Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among qualified vendors.
Public Impact
Ensures critical airlift capacity for national defense emergencies. Supports global logistics and rapid deployment capabilities for the military. Provides economic activity for the air transportation sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost overruns.
- Reliance on a single large carrier for a critical service.
Positive Signals
- Awarded through full and open competition.
- Supports essential national defense functions.
Sector Analysis
This contract falls within the broader transportation and logistics sector, specifically focusing on air cargo and passenger services. Spending benchmarks for similar large-scale government air transportation contracts are typically in the tens to hundreds of millions of dollars annually.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. Large contracts like this often involve significant resources and infrastructure typically held by major corporations.
Oversight & Accountability
The contract was awarded by USTRANSCOM, a component of the Department of Defense responsible for global mobility. Oversight would involve monitoring service delivery, adherence to contract terms, and managing economic price adjustments.
Related Government Programs
- Nonscheduled Chartered Passenger Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Potential for cost increases due to economic price adjustments.
- Concentration of a critical service with a single large provider.
- Lack of explicit small business participation noted.
- Dependence on a specific carrier for national security airlift.
Tags
nonscheduled-chartered-passenger-air-tra, department-of-defense, tn, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $163.3 million to FEDERAL EXPRESS CORPORATION. IGF::OT::IGF CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES
Who is the contractor on this award?
The obligated recipient is FEDERAL EXPRESS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (USTRANSCOM).
What is the total obligated amount?
The obligated amount is $163.3 million.
What is the period of performance?
Start: 2017-10-01. End: 2018-09-30.
What is the typical utilization rate of the Civil Reserve Air Fleet during non-emergency periods, and how does this contract's value reflect that usage?
The Civil Reserve Air Fleet (CRAF) is primarily a strategic asset maintained for emergency use, not for routine operations. Its value lies in its surge capability. This contract likely covers standby agreements and potential activation costs, rather than continuous full utilization. The $163M value reflects the readiness and availability commitment from Federal Express, ensuring the government has access to critical airlift when needed, rather than the cost of constant service.
How are the economic price adjustments calculated, and what historical data supports the fairness of these adjustments for this specific contract?
Economic price adjustments (EPAs) typically track specific indices related to fuel, labor, and other operational costs. The fairness depends on the chosen indices and their volatility. Without specific details on the EPA formula used in this contract, it's difficult to assess. Historical data on fuel prices and labor costs within the air cargo industry during the 2017-2018 period would be needed to evaluate if the adjustments were reasonable and protected both parties from unforeseen market shifts.
What performance metrics are used to evaluate Federal Express's service delivery under this contract, and what are the penalties for non-performance?
Performance metrics for such contracts typically include on-time delivery rates, aircraft availability, safety compliance, and responsiveness to activation orders. Specific penalties for non-performance could range from financial deductions to contract termination, depending on the severity and frequency of failures. Detailed contract terms would outline these metrics and associated remedies, ensuring accountability for maintaining the required readiness and service levels.
Industry Classification
NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Passenger Air Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRAVEL, LODGING, RECRUITMENT SVCS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Fedex Corp
Address: 2955 REPUBLICAN DR FL 1, MEMPHIS, TN, 38118
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $163,281,715
Exercised Options: $163,281,715
Current Obligation: $163,281,715
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HTC71117DCC11
IDV Type: IDC
Timeline
Start Date: 2017-10-01
Current End Date: 2018-09-30
Potential End Date: 2018-09-30 00:00:00
Last Modified: 2024-03-29
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