GSA contract opens federal package delivery to competition

Shipping giant Federal Express will no longer have a lock on government agencies' express delivery needs, thanks to a new contract announced by the General Services Administration. Under a contract that will expire Aug. 15, FedEx is the only carrier providing the government with next-day and second-day delivery of small package shipments up to 150 pounds, according to Jeffrey Koses, deputy director of the Services Acquisition Center at GSA's Federal Supply Service. By creating a new multiple award schedule-the first for express delivery since 1983-FedEx's major competitors, including United Parcel Service and DHL World Wide Express, will be able to bid for the government's business for same-day delivery, third-day delivery, heavy package shipments and specialty shipping services. "In the past," said Koses, "the government met these shipping needs through separately negotiated tenders. Due to the downsizing of the last few years, the government has a lot fewer traffic managers and transportation professionals." Koses added that many agencies lack the staff to set up and maintain these separate arrangements, which are also an administrative burden for the shipping companies. "Concerns about the potential for strikes in the transportation industry and the need to ensure continual sources of delivery also played a role in the decision to grow the program," Koses said. Agencies will now have the ability to buy shipping services off the schedule from other companies. Norman Black, a spokesman for UPS, said the company is actively considering whether to pursue a government contract, but that it has not reached a decision. Black added that the carrier hopes to decide next month. We're "busily reviewing everything right now," he said. "[The government is] certainly a large customer." UPS is the largest package carrier in the world with 13.6 million deliveries a day. Donna Bennett, commissioner of GSA's Federal Supply Service, said in a statement that the agency is "confident that the range of services provided through this new program will give GSA's customers the opportunity to tailor their delivery preferences with a wide variety of sources to meet their specific needs." Koses emphasized that GSA was not unsatisfied with FedEx's performance as a sole contractor. "The old program was aimed at a major subset of the government's shipping needs and was right for the times," he said.
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