DoD's $109M Civil Reserve Air Fleet contract with FedEx faces scrutiny over competition and value
Contract Overview
Contract Amount: $109,076,602 ($109.1M)
Contractor: Federal Express Corporation
Awarding Agency: Department of Defense
Start Date: 2023-10-01
End Date: 2024-09-30
Contract Duration: 365 days
Daily Burn Rate: $298.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 13
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES
Plain-Language Summary
Department of Defense obligated $109.1 million to FEDERAL EXPRESS CORPORATION for work described as: CIVIL RESERVE AIR FLEET - AIR TRANSPORTATION SERVICES Key points: 1. High contract value of $109M for air transportation services. 2. Sole provider FedEx dominates a critical segment of air cargo. 3. Potential risks include limited competition and price discovery. 4. Sector context: Defense logistics relies heavily on private air carriers.
Value Assessment
Rating: fair
The contract value of $109M for air transportation services is significant. Benchmarking against similar contracts is difficult without more detailed service scope, but the lack of robust competition suggests potential for overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition approach. This method may restrict the pool of potential bidders and impact price discovery, potentially leading to higher costs.
Taxpayer Impact: Taxpayer funds are utilized for this critical defense logistics service. The limited competition raises concerns about the efficiency of spending and whether the best possible prices were secured.
Public Impact
Ensures critical airlift capacity for national defense emergencies. Supports a major private sector player in air cargo. Potential impact on commercial air travel availability during emergencies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Potential for price inflation
- Dependence on a single large provider
Positive Signals
- Ensures critical national defense airlift capability
- Leverages established private sector infrastructure
Sector Analysis
The defense sector's reliance on private air transportation for logistics is substantial. This contract falls under air transportation services, a critical component of military readiness and global operations, with benchmarks often tied to commercial rates but influenced by specialized requirements.
Small Business Impact
This contract does not appear to involve small business participation, as it is awarded to a large corporation, Federal Express. Analysis of small business subcontracting opportunities is not provided in the data.
Oversight & Accountability
Oversight is managed by USTRANSCOM. The contract type (firm fixed price) and award method suggest a degree of accountability, but the limited competition warrants closer examination of performance and cost justification.
Related Government Programs
- Nonscheduled Chartered Passenger Air Transportation
- Department of Defense Contracting
- USTRANSCOM Programs
Risk Flags
- Limited competition
- Potential for non-competitive pricing
- Dependence on a single large contractor
- Lack of transparency in source exclusion criteria
Tags
nonscheduled-chartered-passenger-air-tra, department-of-defense, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $109.1 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 $109.1 million.
What is the period of performance?
Start: 2023-10-01. End: 2024-09-30.
What specific factors led to the exclusion of other sources in this 'full and open competition' scenario?
The exclusion of sources likely stems from specific requirements of the Civil Reserve Air Fleet program, which may necessitate unique capabilities, existing agreements, or security clearances held by Federal Express. Understanding these specific criteria is crucial to assessing whether the exclusion was justified or if it unduly limited competition and potentially inflated costs for taxpayers.
How does the pricing of this contract compare to similar commercial air cargo services, considering the unique demands of military airlift?
Direct comparison to standard commercial air cargo rates is challenging due to the specialized nature of military airlift, which includes readiness requirements and rapid deployment capabilities. However, the limited competition suggests that the pricing might be higher than what could be achieved in a more competitive market. A detailed cost-benefit analysis is needed to determine if the premium paid is justified by the strategic value and readiness assurance.
What are the contingency plans if Federal Express is unable to fulfill its obligations under this contract?
Contingency plans would typically involve activating other pre-negotiated agreements within the Civil Reserve Air Fleet or seeking alternative transportation solutions. Given the reliance on a single provider, the government likely has protocols to mitigate disruption, but the effectiveness and speed of these alternatives would be critical in a real-world emergency scenario.
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: 13
Pricing Type: FIRM FIXED PRICE (J)
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: $109,076,602
Exercised Options: $109,076,602
Current Obligation: $109,076,602
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: 2023-10-01
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2024-09-30
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