DHS awards $25.5M for AS&E NII equipment maintenance, a sole-source contract

Contract Overview

Contract Amount: $25,506,895 ($25.5M)

Contractor: American Science & Engineering Inc

Awarding Agency: Department of Homeland Security

Start Date: 2018-07-01

End Date: 2019-06-30

Contract Duration: 364 days

Daily Burn Rate: $70.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CL::IGF AS&E SUPPORT SERVICES. TASK ORDER MAINTENANCE OF AS&E NII EQUIPMENT.

Place of Performance

Location: LORTON, FAIRFAX County, VIRGINIA, 22079

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.5 million to AMERICAN SCIENCE & ENGINEERING INC for work described as: IGF::CL::IGF AS&E SUPPORT SERVICES. TASK ORDER MAINTENANCE OF AS&E NII EQUIPMENT. Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Limited competition may lead to higher costs for taxpayers. 3. The contract duration of one year suggests a need for ongoing support. 4. Focus on maintenance of NII equipment indicates critical infrastructure support. 5. The contractor, American Science & Engineering Inc., has a track record in this specialized area. 6. The contract type is Firm Fixed Price, providing cost certainty.

Value Assessment

Rating: fair

The contract value of $25.5 million for a one-year maintenance task order appears substantial. Without comparable sole-source contracts for similar NII equipment maintenance, it is difficult to benchmark the value for money. The firm fixed-price nature of the contract offers cost predictability, but the lack of competition prevents a thorough assessment of whether the pricing is optimal or reflects market rates. Further analysis would require understanding the specific NII equipment and the complexity of its maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they limit the government's ability to explore alternative solutions and secure the best possible pricing. The absence of multiple bidders means there's no direct comparison to gauge the fairness of the awarded price.

Taxpayer Impact: Sole-source awards can potentially result in higher costs for taxpayers compared to competitively bid contracts, as the government does not benefit from the price pressures inherent in a competitive environment.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection, ensuring the operational readiness of their NII equipment. Services delivered include the maintenance of NII (Non-Intrusive Inspection) equipment, crucial for border security and cargo screening. The geographic impact is likely focused on locations where CBP operates NII equipment, primarily at ports of entry and border crossings. Workforce implications may involve specialized technicians employed by the contractor to perform the maintenance services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Sole-source awards can limit the government's access to innovative solutions from a broader market.
Dependence on a single contractor for critical equipment maintenance could pose a risk if the contractor underperforms or faces financial instability.

Positive Signals

The contract is firm fixed-price, providing cost certainty for the duration of the task order.
The contractor, American Science & Engineering Inc., is a known entity in the field of NII equipment, suggesting specialized expertise.
Maintenance of critical NII equipment ensures the continuity of essential border security operations.

Sector Analysis

The contract falls within the broader sector of defense and security equipment maintenance and support. The market for specialized inspection and security equipment, including NII systems, is driven by government procurement needs for border control, cargo screening, and threat detection. While specific market size data for NII equipment maintenance is not readily available, it is a niche but critical segment within the larger government contracting landscape. Comparable spending benchmarks would typically involve other agencies procuring similar inspection technologies or maintenance services for high-value, specialized equipment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses based on the provided data. The award to American Science & Engineering Inc., a large business, suggests that the scope of work was likely beyond the capacity or specialization typically offered by small businesses in this niche area. The absence of small business involvement means there are no direct benefits to the small business ecosystem from this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Customs and Border Protection (CBP) contracting officers and program managers. As a task order under a larger contract vehicle, it is subject to the agency's internal procurement regulations and oversight processes. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security - Procurement
U.S. Customs and Border Protection - Equipment Maintenance
Non-Intrusive Inspection (NII) Systems
Government Contract Maintenance Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.5 million to AMERICAN SCIENCE & ENGINEERING INC. IGF::CL::IGF AS&E SUPPORT SERVICES. TASK ORDER MAINTENANCE OF AS&E NII EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is AMERICAN SCIENCE & ENGINEERING INC.

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 $25.5 million.

What is the period of performance?

Start: 2018-07-01. End: 2019-06-30.

What is the track record of American Science & Engineering Inc. with the Department of Homeland Security and similar contracts?

American Science & Engineering Inc. (AS&E) has a history of providing advanced X-ray imaging and detection solutions, including NII systems, to government agencies. Their work with DHS, particularly CBP, likely involves supplying and maintaining equipment used for cargo and baggage screening. Analyzing their past performance on similar contracts would involve reviewing contract databases for previous awards, performance evaluations (e.g., CPARS), and any documented issues or successes. A positive track record with DHS would suggest familiarity with agency requirements and operational environments, potentially justifying a sole-source award if unique capabilities are demonstrated. However, without specific performance data for this task order, it remains an assumption.

How does the cost of this contract compare to similar NII equipment maintenance contracts, if available?

Benchmarking the cost of this $25.5 million, one-year contract is challenging due to its sole-source nature and the specialized equipment involved. Publicly available data on comparable NII equipment maintenance contracts, especially sole-source ones, is scarce. Typically, competitive procurements for similar services would provide a better basis for comparison. If other agencies have procured maintenance for comparable NII systems through competitive means, their contract values, scope of work, and duration could offer insights. However, the unique specifications of NII equipment and the specific maintenance requirements can lead to significant price variations, making direct comparisons difficult without detailed technical and service scope information.

What are the specific risks associated with a sole-source award for critical NII equipment maintenance?

The primary risk of a sole-source award for critical NII equipment maintenance is the potential for inflated costs due to the lack of competitive pressure. Taxpayers may end up paying more than necessary for the services. Another significant risk is reduced incentive for the contractor to innovate or provide exceptional service, as there is no immediate threat of losing the contract to a competitor. Furthermore, the government becomes highly dependent on the single awarded contractor, creating vulnerability if the contractor experiences financial difficulties, operational issues, or fails to meet performance standards. This dependence can also limit the government's flexibility in adapting to new technologies or changing operational needs.

How effective is the maintenance of NII equipment in ensuring border security operations?

The effective maintenance of Non-Intrusive Inspection (NII) equipment is crucial for ensuring the continuous and efficient operation of border security and cargo screening processes. NII systems, such as large-scale X-ray scanners, are vital tools for detecting contraband, weapons, and illicit materials without requiring physical inspection of every item. When these systems are well-maintained, they operate reliably, minimizing downtime and allowing customs and border protection officers to process a higher volume of goods and individuals. Conversely, equipment failures or performance degradation due to poor maintenance can lead to significant delays, increased manual inspections, and potential security vulnerabilities, thereby undermining the overall effectiveness of border security operations.

What is the historical spending pattern for NII equipment maintenance by U.S. Customs and Border Protection?

Historical spending patterns for NII equipment maintenance by U.S. Customs and Border Protection (CBP) would likely show a consistent need for such services, given the agency's mission. This spending would fluctuate based on the number and types of NII systems deployed, their age, and the maintenance contracts in place. Analyzing past contracts, including their values, durations, and whether they were competitively bid or sole-source, would reveal trends. For instance, a pattern of sole-source awards for maintenance might indicate a lack of market competition or a strategic decision by CBP to rely on specific vendors. Understanding this history is essential for assessing the current $25.5 million award in context and identifying potential areas for cost savings or improved procurement strategies.

What are the implications of the Firm Fixed Price (FFP) contract type for this maintenance service?

The Firm Fixed Price (FFP) contract type provides significant cost certainty for the government, as the price is set and not subject to adjustment based on the contractor's cost experience. For maintenance services like this, FFP shifts the risk of cost overruns to the contractor. This means American Science & Engineering Inc. is responsible for managing its expenses to deliver the contracted services within the agreed-upon price. While beneficial for budget predictability, FFP contracts can sometimes lead to contractors cutting corners on quality or service if they underestimate costs, although this is mitigated by performance monitoring. It also means the government does not benefit if the contractor's costs are lower than anticipated.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: OSI Systems Inc (UEI: 178295812)

Address: 829 MIDDLESEX TPKE, BILLERICA, MA, 01821

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: $25,506,895

Exercised Options: $25,506,895

Current Obligation: $25,506,895

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B04C18D00000016

IDV Type: IDC

Timeline