DHS awards $7.25M for mail sorting tech, with 2 bids received under SAP

Contract Overview

Contract Amount: $7,253,351 ($7.3M)

Contractor: DMT Solutions Global Corporation

Awarding Agency: Department of Homeland Security

Start Date: 2021-09-16

End Date: 2026-04-30

Contract Duration: 1,687 days

Daily Burn Rate: $4.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL SORTING & SINGULATION TECHNOLOGY

Place of Performance

Location: ARLINGTON HEIGHTS, COOK County, ILLINOIS, 60004

State: Illinois Government Spending

Plain-Language Summary

Department of Homeland Security obligated $7.3 million to DMT SOLUTIONS GLOBAL CORPORATION for work described as: MAIL SORTING & SINGULATION TECHNOLOGY Key points: 1. Contract awarded for mail sorting and singulation technology to enhance operational efficiency. 2. Competition was limited, with only two bids submitted under the Simplified Acquisition Procedures. 3. The contract duration is substantial, spanning over 1600 days, indicating a long-term need. 4. The fixed-price nature of the contract provides cost certainty for the government. 5. The award was made to DMT Solutions Global Corporation, a single vendor. 6. The technology is intended for use by U.S. Customs and Border Protection.

Value Assessment

Rating: fair

The contract value of $7.25 million for mail sorting and singulation technology appears moderate for a multi-year federal procurement. Benchmarking against similar contracts is challenging without more specific details on the technology's capabilities and the scope of services. However, the fixed-price structure suggests an attempt to control costs. The limited competition may have impacted the government's ability to secure the best possible pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically allows for less formal competition than full and open procedures. Only two bids were received, indicating a potentially limited pool of interested and capable vendors for this specific technology. While SAP aims for efficiency, the low number of bidders raises questions about the extent of price discovery and whether the government received the most competitive offers available.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the full range of competitive pricing that a broader solicitation could have generated. This could potentially lead to higher costs than if more vendors had participated.

Public Impact

The primary beneficiary is U.S. Customs and Border Protection (CBP), which will utilize the mail sorting and singulation technology. The technology is expected to improve the efficiency and effectiveness of mail processing and screening operations. The geographic impact is likely concentrated at CBP facilities where mail is processed. The contract supports the operational needs of federal law enforcement and border security agencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than if more vendors had bid.
The long contract duration could present risks if technology becomes obsolete or if vendor performance declines.

Positive Signals

The firm fixed-price contract provides cost certainty and protects the government from cost overruns.
The technology addresses a specific operational need for mail sorting and singulation.
The award was made under SAP, suggesting an efficient procurement process for a moderate value contract.

Sector Analysis

The mail sorting and singulation technology falls within the broader sector of logistics and automation equipment, often serving government agencies focused on security and customs. The market for such specialized equipment can be niche, with a limited number of providers capable of meeting stringent government requirements. Comparable spending benchmarks are difficult to establish without knowing the exact technical specifications, but federal spending on mail and package handling systems is ongoing to support various agency operations.

Small Business Impact

This contract does not appear to have a small business set-aside. Analysis of subcontracting opportunities for small businesses is not possible with the provided data. The award to a single vendor, DMT Solutions Global Corporation, does not inherently indicate a positive or negative impact on the small business ecosystem without further information on the prime contractor's subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting agency, the Department of Homeland Security (DHS), and specifically U.S. Customs and Border Protection (CBP). The contract type (Purchase Order) and its completion under SAP suggest standard procurement oversight. Transparency is facilitated by public contract databases, but detailed performance monitoring and accountability measures are internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Postal Service Technology
Customs and Border Protection Equipment
Logistics and Automation Systems
Homeland Security Technology Procurement

Risk Flags

Limited Competition
Potential for Technology Obsolescence
Vendor Lock-in Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $7.3 million to DMT SOLUTIONS GLOBAL CORPORATION. MAIL SORTING & SINGULATION TECHNOLOGY

Who is the contractor on this award?

The obligated recipient is DMT SOLUTIONS GLOBAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $7.3 million.

What is the period of performance?

Start: 2021-09-16. End: 2026-04-30.

What is the specific type of mail sorting and singulation technology being procured, and what are its key capabilities?

The provided data indicates the contract is for 'MAIL SORTING & SINGULATION TECHNOLOGY' under NAICS code 491110 (Postal Service). While the exact technical specifications are not detailed, 'singulation' refers to the process of separating individual mail pieces from a batch or stream. This technology likely involves automated systems designed to sort mail by various criteria (e.g., destination, size, type) and ensure each piece is individually processed or scanned. Its key capabilities would typically include high-speed sorting, accurate identification of mail pieces, and potentially integration with other security screening or tracking systems used by CBP.

How does the $7.25 million contract value compare to historical spending on similar mail sorting technologies by DHS or other agencies?

Direct comparison of the $7.25 million value is difficult without specific technical details of the technology. However, federal agencies, particularly those dealing with large volumes of mail and packages like CBP, do invest in automated sorting and screening systems. Historically, such procurements can range from hundreds of thousands to several million dollars, depending on the scale, complexity, and automation level. The duration of this contract (over 4.5 years) suggests a significant investment. To provide a precise benchmark, one would need to compare the unit costs, throughput capabilities, and features against other similar procurements within the federal government or even the private sector.

What are the potential risks associated with a firm fixed-price contract for technology that may evolve over its 4.5-year duration?

A primary risk with a firm fixed-price (FFP) contract for technology over a long duration is obsolescence. If the technology rapidly advances, the procured system might become outdated before the contract ends, potentially diminishing its long-term value. Another risk is that the vendor might be incentivized to cut corners on quality or support to maximize profit under the fixed price, especially if unforeseen technical challenges arise. Conversely, the government is protected from cost overruns, which is a significant benefit. However, if the vendor encounters unexpected costs due to factors beyond their control, they may seek contract modifications or face financial strain, potentially impacting performance.

Given the limited competition (2 bids), what is the likelihood that DMT Solutions Global Corporation's pricing is competitive?

The likelihood of competitive pricing with only two bids is uncertain. Simplified Acquisition Procedures (SAP) are designed for smaller purchases where full and open competition might be inefficient. However, for a contract valued at $7.25 million, receiving only two bids suggests that the market for this specific technology might be concentrated, or that the solicitation's requirements were highly specific, limiting the number of potential bidders. While the government aims for fair and reasonable pricing under SAP, the lack of broader competition means there's less assurance that the price achieved is the absolute lowest possible. A thorough price analysis by the contracting officer would have been conducted to deem the price fair and reasonable.

What are the implications of this contract being awarded under Simplified Acquisition Procedures (SAP) for transparency and oversight?

Awarding under SAP generally implies a less stringent documentation and competition process compared to full and open competition, which can impact transparency. While the award is publicly reported, the detailed justification for using SAP and the evaluation criteria for the bids may not be as extensively documented or accessible. Oversight typically relies on the agency's internal controls and the contracting officer's diligence. For a contract of this value, while SAP is permissible, it does mean that the level of public scrutiny and the breadth of competitive analysis might be reduced. This necessitates strong internal oversight by DHS/CBP to ensure value for taxpayer money.

Industry Classification

NAICS: Transportation and Warehousing › Postal Service › Postal Service

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 70B03C21R00000013

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 37 EXECUTIVE DR, DANBURY, CT, 06810

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

Financial Breakdown

Contract Ceiling: $7,500,000

Exercised Options: $7,253,351

Current Obligation: $7,253,351

Actual Outlays: $6,550,843

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline