DoD's $11.3M Delivery Order to UPS for Courier Services Faces Scrutiny Over Competition and Value

Contract Overview

Contract Amount: $11,341,015 ($11.3M)

Contractor: United Parcel Service CO.

Awarding Agency: Department of Defense

Start Date: 2025-09-01

End Date: 2025-09-30

Contract Duration: 29 days

Daily Burn Rate: $391.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40223

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $11.3 million to UNITED PARCEL SERVICE CO. for work described as: CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS. Key points: 1. The Department of Defense awarded a $11.3 million delivery order to United Parcel Service Co. for courier and express delivery services. 2. The contract was awarded under full and open competition after exclusion of sources, indicating a competitive process. 3. The short duration of the order (29 days) may limit the ability to fully assess long-term value and cost-effectiveness. 4. The sector is IT/Logistics, with a significant portion of government spending in this area.

Value Assessment

Rating: fair

The contract's value of $11.3 million for a 29-day period appears high for standard courier services. Benchmarking against similar, longer-term contracts or bulk shipping agreements would be necessary to determine if this pricing is competitive.

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.' While this suggests competition, the specific exclusion criteria and the number of bidders are not detailed, impacting the assessment of price discovery.

Taxpayer Impact: The $11.3 million expenditure for a short-term delivery service raises questions about potential overspending if more cost-effective options were available or if the scope could have been consolidated.

Public Impact

Military personnel and equipment rely on timely delivery of critical supplies and documents. The use of a major private carrier like UPS impacts the logistics network and potentially other government shipping contracts. Taxpayers are funding this significant expenditure for essential transportation services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High cost for a short duration
Potential for better pricing through longer-term agreements or different service levels

Positive Signals

Utilizes a well-established and reliable carrier
Awarded through a competitive process

Sector Analysis

The Department of Defense is a major consumer of logistics and transportation services. Spending in the Couriers and Express Delivery Services sector is substantial, with government agencies often seeking competitive bids for these critical operational needs.

Small Business Impact

The data indicates the award went to United Parcel Service Co., a large corporation. There is no indication of small business participation in this specific delivery order, which is common for large-scale logistics contracts.

Oversight & Accountability

Oversight would involve reviewing the justification for the exclusion of sources, the evaluation criteria used in the competition, and post-award performance monitoring to ensure services meet requirements and are cost-effective.

Related Government Programs

Couriers and Express Delivery Services
Department of Defense Contracting
USTRANSCOM Programs

Risk Flags

High cost for a short-term service
Lack of detailed justification for source exclusion
Potential for better pricing through alternative contract structures
Limited transparency on specific performance metrics and value realization

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.3 million to UNITED PARCEL SERVICE CO.. CONSOLIDATED TRANSPORTATION SHIPMENTS MADE BY DECENTRALIZED ORDERING OFFICERS.

Who is the contractor on this award?

The obligated recipient is UNITED PARCEL SERVICE CO..

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $11.3 million.

What is the period of performance?

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

What was the specific justification for excluding certain sources in the 'full and open competition after exclusion of sources' award?

The justification for excluding sources under this type of competition is crucial for understanding the scope of the bidding pool. Agencies typically exclude sources based on specific technical requirements, security clearances, or geographic limitations. Without this information, it's difficult to assess if the competition was truly as broad as possible or if potential cost savings were forgone.

How does the per-unit cost of this delivery order compare to similar government or commercial contracts for express delivery services?

A detailed per-unit cost analysis is essential for evaluating value. Comparing the cost per package, per pound, or per mile against established benchmarks for similar services, considering factors like speed, distance, and service level, would reveal if this $11.3 million award represents a fair market price or if there's an opportunity for cost savings through negotiation or alternative providers.

What is the expected impact of this short-duration, high-value order on the overall efficiency and cost-effectiveness of the DoD's transportation and logistics operations?

The short 29-day duration of this $11.3 million order raises questions about its strategic fit within the DoD's long-term logistics planning. While it may address an immediate need, it could indicate a lack of proactive planning or an inability to secure more cost-effective, longer-term contracts. This could lead to recurring high costs for essential services.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1400 N HURSTBOURNE PKWY, LOUISVILLE, KY, 40223

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,341,015

Exercised Options: $11,341,015

Current Obligation: $11,341,015

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HTC71123DC025

IDV Type: IDC

Timeline