November 29, 2005 -- (WhatTheyThink.com Exclusive, By Cary Sherburne, Senior Editor) -- WhatTheyThink has learned that the Government Printing Office (GPO) recently awarded a contract to FedEx Kinko's to make 24x7x365 services available to its customer base - Federal agencies. According to Public Printer Bruce James, "The GPO is the Federal government's primary centralized resource for gathering, cataloging, producing, providing and preserving published information in all its forms." This initiative is designed to augment the services the GPO can offer to its customers. According to a message to its customers recently posted on the GPO web site: "GPO has awarded a contract (950-S) to FedEx Kinko'sSM Office and Print Services that allows all U.S. Federal agencies direct access to services at FedEx Kinko's locations worldwide. Using the new GPOExpress Card, agencies will receive significant discounts and benefits on their printing and finishing needs at any store location, at any time." The program is currently in pilot mode with select agencies. It will provide access to the full range of FedEx Kinko's services, and allows Government personnel to walk into or dial into a FedEx Kinko's, day or night, at any of its thousands of locations throughout the United States and Canada or access services via the Web to take care of small printing needs. The GPO plans to launch the program to all of its constituencies in 2006. Earlier this year, when word of this contract solicitation came to our attention, WhatTheyThink contacted the GPO to gain an understanding of the bid response process. In looking at the criteria successful bidders had to meet, two elements jumped out that quickly translated in the minds of many to FedEx Kinko's: 24-hour access and a large number of physical locations that would in effect offer convenience to government agencies wherever they might be located. James assured us at that time that the solicitation was not structured to meet the needs of any particular vendor, but rather, to meet the needs of its customers. He indicated there were a number of qualified respondents besides FedEx Kinko's, and the selection process was being managed according to all Government regulations for these types of initiatives. In talking about GPO Express, James stated, "This is GPO's next step in streamlining small printing procurements while increasing flexibility for our customers. It follows our recent move to increase the limit for Simplified Purchase Agreement (SPA) procurements from $2,500 to $10,000. Together, we expect these programs will speed up the acquisition process, offer more choices, and provide an unmatched level of convenience and control for our agency customers." This is a significant win for FedEx Kinko's and takes GPO's services to its customers to a new level. With over 1,000 FedEx Kinko's locations in the U.S. and Canada, and thousands of Federal Government employees who can potentially take advantage of the program, it has the potential of boosting growth for what is the slowest growth sector within FedEx. FedEx Kinko's posted 6% year-over-year revenue growth for its first quarter ended August 31, 2005 compared to double digit growth for other FedEx divisions, and a decline in both operating income and operating margin. The company's earnings release stated, "The FedEx Kinko's revenue increase for the quarter was due to continued growth from FedEx Express and FedEx Ground package acceptance and the benefit of the conversion of certain FedEx World Service Centers to FedEx Kinko's Ship Centers, partially offset by a decline in copy product line revenues. Operating margin continued to be negatively affected by costs associated with internal technology and product offering initiatives, as well as higher administrative costs." FedEx Kinko's had not responded to our request for comment by press time.