The Homeland Security Department has awarded a contract to DHL, the express shipping company, that could be worth up to $60 million over the next five years.
The award was made as part of Homeland Security's strategic sourcing initiative, which involves leveraging the department's buying power to get better deals. In May, the Office of Management and Budget announced a new rule that requires agencies to choose three commodities to purchase through strategic sourcing by October.
Under the new contract, DHL will handle all pickups of letters and small packages for all parts of DHS, including the Customs and Border Protection bureau and the Transportation Security Administration, for delivery to destinations around the world. Previously, multiple companies handled the department's shipping needs.
In addition to providing delivery, the contract also requires DHL to maintain a database that tracks how much Homeland Security spends on shipping and where packages go.
The contract was awarded late Tuesday after a full and open competition between multiple companies. The department will pay DHL between $250,000 and $60 million over the next five years, based on its use of DHL services, said DHS spokesman Larry Orluskie.
"We decide how much we're going to spend based on our needs," said Orluskie.
The contract specifies competitive rates for delivery and will go into effect over the next month, Orluskie said.
Homeland Security has been aggressively pursuing strategic sourcing over the last several years and has set up several commodity councils to examine various products and explore how to buy them more efficiently. Current councils include those for handguns and boats. Customs and Border Protection unveiled a new strategic sourcing strategy in mid-June.
Robert Mintz, a spokesman for DHL, said, "We're extremely pleased that we're able to support the Department of Homeland Security." He said DHL has contracts with other agencies as well, including Defense.