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Top U.S. Postal Service Contractors for FY 2009: FedEx Is Again USPS’s Largest Supplier

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Husch Blackwell Sanders' Government Contracts practice group today released its list of the top 10 U.S. Postal Service suppliers for fiscal year 2009, compiled from information obtained under the Freedom of Information Act. David P. Hendel, a Partner in the firm whose practice focuses on postal contracting matters, has compiled the list of the top 150 postal suppliers for the past 14 years.

For the seventh straight year, FedEx is the Postal Service's top supplier. FedEx transports Express, Priority, and First Class Mail, and earned postal revenues of $1.4 billion in fiscal 2009 – more than triple the amount of the next largest supplier. While at the top of the list, FedEx's postal revenues declined from a high point of over $1.6 billion. Another postal competitor, United Parcel Service, is also one of the Postal Service's top suppliers, netting $83 million in revenue and holding the 18th spot.

The second-ranked USPS supplier, Kalitta Air, LLC, earned $423 million in postal revenues. Kalitta provides air transportation and mail distribution services, a large portion of which is military mail bound for overseas. The third-ranked supplier, EnergyUnited, provides utility auditing services, therefore much of its revenues are actually pass-throughs to other utilities.

Other transportation providers in the top 10 include Wheeler Bros. Inc, which transports mail by ground, and American Airlines, which transports mail by air. American Airlines, as with the other major airlines, saw reductions in postal revenues from reduced volumes of mail.

Providers of computer equipment, services, and software are well-represented on this year's top 10 list. Hewlett-Packard claims the number five spot with $232 million in revenues, a $70 million increase from last year. Accenture, which provides consulting and technical services on a variety of postal initiatives and helped re-design the agency's website, ranked sixth with $164 million in revenues. Accenture had the largest growth of any contractor on the list, capturing $84 million in additional revenues. IBM Corp. moves up from the tenth to the seventh spot with $143 million in revenues.

Only one automation supplier makes the top 10 this year. Northrop Grumman, occupying the number four spot with $331 million in revenue, has been providing automation design, equipment fabrication, field deployment and logistics support to the Postal Service for almost two decades. Just three years ago, two other automation contractors -- Siemens and Lockheed Martin -- were the second and third ranked suppliers, respectively. This year, they rank 16th and 32nd.

“Transportation and technology providers once again stand atop the list of the Postal Service's largest suppliers,” noted David Hendel, who has worked on postal contracting matters for the past 28 years. “With some notable exceptions, the biggest USPS suppliers earned more revenue than last year, even in a down year for the agency overall. This is consistent with the Postal Service's desire to consolidate its purchasing among its top suppliers. While new suppliers may find the Postal Service a difficult nut to crack, once established as a postal supplier, the opportunities for obtaining additional work are easier to capture." Opportunities for facility contractors will continue to decline, however, as the agency is unlikely to build many new facilities in a time of decreasing mail volume. But opportunities do exist for modifying existing facilities and retrofitting facilities for energy conservation purposes.

The firm's Government Contracts practice is involved in all phases of government contracting, including bid protests, contract administration, change orders, audits, claims and disputes, and compliance programs. A special focus of this practice is providing advice to Postal Service contractors. David Hendel, the Partner who leads this effort, developed two popular training courses on postal contracting, writes a monthly column on postal contracting issues for the National Star Route Mail Contractors Association, and has represented hundreds of postal contractors on a wide range of issues.