DoD's $27.8M Civil Reserve Air Fleet contract with FedEx faces scrutiny over potential value and competition
Contract Overview
Contract Amount: $27,814,399 ($27.8M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2021-10-01
End Date: 2024-09-30
Contract Duration: 1,095 days
Daily Burn Rate: $25.4K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Transportation
Official Description: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES
Place of Performance
Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225
State: Illinois Government Spending
Plain-Language Summary
Department of Defense obligated $27.8 million to FEDERAL EXPRESS CORPORATION for work described as: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. The contract value of $27.8M for air transportation services is significant. 2. Competition was full and open after exclusion of sources, suggesting some market engagement. 3. Potential risks include economic price adjustments impacting final cost and limited small business participation. 4. The sector is critical for national defense logistics, highlighting the importance of efficient spending.
Value Assessment
Rating: fair
The contract's fixed price with economic price adjustment introduces uncertainty in the final cost. Benchmarking against similar air transportation contracts is needed to assess if the base price is competitive, especially considering the potential for upward adjustments.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The 'full and open competition after exclusion of sources' method implies a competitive process but warrants examination of the exclusion criteria. This approach can impact price discovery by potentially limiting the pool of bidders.
Taxpayer Impact: The economic price adjustment clause could lead to higher-than-anticipated costs for taxpayers if fuel or other economic factors rise significantly.
Public Impact
Ensures critical airlift capacity for national defense during emergencies. Supports a major private sector logistics provider, contributing to the broader economy. Potential for increased costs to taxpayers due to economic price adjustments.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic Price Adjustment (EPA) clause
- Limited small business participation
Positive Signals
- Ensures critical national defense airlift capability
- Utilizes established commercial air carrier services
Sector Analysis
This contract falls within the air transportation services sector, crucial for Department of Defense logistics and rapid deployment. Spending benchmarks in this area are highly variable, depending on service type, duration, and specific requirements.
Small Business Impact
The data indicates no specific small business set-aside or participation. This contract, awarded to a large corporation, likely offers minimal direct opportunities for small businesses in this specific award.
Oversight & Accountability
Oversight by USTRANSCOM is essential to monitor performance and manage the economic price adjustment clause effectively. Accountability for ensuring fair pricing and service delivery rests with the agency.
Related Government Programs
- Nonscheduled Chartered Passenger Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Economic Price Adjustment clause may increase final cost.
- Limited visibility into specific small business participation.
- Potential for reduced competition due to 'exclusion of sources'.
- Need for robust oversight of EPA implementation.
Tags
nonscheduled-chartered-passenger-air-tra, department-of-defense, il, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.8 million to FEDERAL EXPRESS CORPORATION. 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 $27.8 million.
What is the period of performance?
Start: 2021-10-01. End: 2024-09-30.
What is the typical cost range for similar scheduled or unscheduled air charter services provided by major carriers to the DoD?
Benchmarking similar contracts is challenging due to the unique nature of the Civil Reserve Air Fleet and the 'exclusion of sources' competition method. However, typical costs for large-scale air charter services can range from thousands to tens of thousands of dollars per flight hour, heavily influenced by aircraft type, route, and service level. The economic price adjustment clause adds a layer of variability.
How does the 'exclusion of sources' in the competition process potentially impact the final price paid by the government?
Excluding sources, even after an initial full and open competition phase, can limit the number of potential bidders. This reduction in competition may lead to less aggressive pricing from the remaining bidders compared to a truly open market scenario. The government must ensure the exclusion criteria are justified and do not unduly restrict competition.
What are the potential risks associated with the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type for this service?
The primary risk is cost escalation. If fuel prices, labor costs, or other economic factors increase significantly during the contract period, the government will bear these increased costs through the economic price adjustment. This can lead to the final price exceeding initial budget projections and potentially being higher than a firm-fixed-price contract.
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 AFTER EXCLUSION OF SOURCES
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: $27,814,399
Exercised Options: $27,814,399
Current Obligation: $27,814,399
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HTC71118DCC37
IDV Type: IDC
Timeline
Start Date: 2021-10-01
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2023-08-29
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