DHS's $26.2M contract for AS&E NII Equipment Maintenance awarded to American Science & Engineering Inc. without competition

Contract Overview

Contract Amount: $26,253,694 ($26.3M)

Contractor: American Science & Engineering Inc

Awarding Agency: Department of Homeland Security

Start Date: 2019-07-01

End Date: 2020-08-31

Contract Duration: 427 days

Daily Burn Rate: $61.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF MAINTENANCE OF AS&E NIIEQUIPMENT.

Place of Performance

Location: BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01821

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $26.3 million to AMERICAN SCIENCE & ENGINEERING INC for work described as: IGF::CL::IGF MAINTENANCE OF AS&E NIIEQUIPMENT. Key points: 1. The contract value of $26.2 million represents a significant investment in maintaining critical security equipment. 2. The sole-source nature of this award raises questions about potential cost efficiencies and market alternatives. 3. A lack of competition may indicate specialized equipment or a limited vendor pool, warranting further investigation. 4. The contract duration of 427 days suggests a need for ongoing, specialized maintenance services. 5. The fixed-price contract type aims to control costs, but the absence of competition limits price benchmarking. 6. The award falls under the 'Other Electronic and Precision Equipment Repair and Maintenance' NAICS code.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of the equipment maintained. Without competitive bids, it's difficult to ascertain if the $26.2 million represents a fair market price. However, the contract is for maintenance of AS&E NII equipment, which suggests specialized technical expertise is required. Further analysis would involve comparing the per-unit maintenance costs or service rates to similar specialized equipment maintenance contracts, if available, to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, American Science & Engineering Inc., was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for this equipment maintenance due to the absence of competitive pressure to drive down prices. The government did not benefit from the cost-saving mechanisms inherent in a competitive procurement.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection, ensuring the operational readiness of their Advanced Spectroscopic (AS&E) Non-Intrusive Inspection (NII) equipment. This contract ensures the continued functionality of vital security screening technology used at ports of entry. The services delivered are critical for maintaining national security and facilitating trade by ensuring efficient cargo and passenger screening. The geographic impact is national, as AS&E NII equipment is deployed across various U.S. Customs and Border Protection facilities nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce accountability and innovation.
Dependence on a single contractor for critical maintenance poses a risk.
The specific nature of AS&E NII equipment might limit viable alternative maintenance providers.

Positive Signals

Contract awarded to a known entity, American Science & Engineering Inc., potentially indicating specialized expertise.
Fixed-price contract type helps to cap government liability for costs.
The contract ensures continuity of operations for critical security equipment.

Sector Analysis

This contract falls within the broader 'Electronic and Precision Equipment Repair and Maintenance' sector, specifically addressing specialized Non-Intrusive Inspection (NII) equipment. The market for maintaining such advanced security technology is often niche, with a limited number of manufacturers or highly specialized service providers. Comparable spending benchmarks would likely involve other government contracts for the maintenance of large-scale inspection systems, such as those used in aviation security or cargo screening, which can also represent significant investments.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the sole-source nature of the award means there is no explicit requirement for subcontracting to small businesses. This limits opportunities for small businesses to participate in this specific maintenance work, potentially impacting the small business ecosystem in this specialized sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting officers and potentially the U.S. Customs and Border Protection's program management. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited by the sole-source award, as the justification and details of the procurement process are not publicly scrutinized through a competitive bidding process.

Related Government Programs

Homeland Security Equipment Maintenance Contracts
Customs and Border Protection Technology Procurement
Non-Intrusive Inspection Systems Maintenance
Federal Contracts for Specialized Equipment Repair

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $26.3 million to AMERICAN SCIENCE & ENGINEERING INC. IGF::CL::IGF MAINTENANCE OF AS&E NIIEQUIPMENT.

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 $26.3 million.

What is the period of performance?

Start: 2019-07-01. End: 2020-08-31.

What is the specific type of AS&E NII equipment being maintained under this contract, and what is its criticality to CBP operations?

The contract pertains to the maintenance of Advanced Spectroscopic (AS&E) Non-Intrusive Inspection (NII) equipment. This technology is crucial for U.S. Customs and Border Protection (CBP) operations as it allows for the rapid and effective screening of cargo and individuals without requiring them to physically open containers or packages. AS&E systems utilize advanced imaging and detection technologies to identify potential threats, contraband, or illicit materials. Their criticality lies in enabling CBP to secure U.S. borders, facilitate legitimate trade, and enhance national security by detecting a wide range of risks, from weapons and explosives to narcotics and undeclared goods. The operational readiness of this equipment is paramount for maintaining the flow of commerce and ensuring public safety.

Why was this contract awarded on a sole-source basis, and what was the justification provided by DHS?

The contract was awarded on a sole-source basis because American Science & Engineering Inc. (AS&E) is the original manufacturer and sole provider of the specialized AS&E NII equipment. The justification for a sole-source award typically stems from the unique capabilities or proprietary nature of the product or service, where only one vendor can meet the government's requirements. In this case, AS&E likely possesses the exclusive technical knowledge, proprietary data, and specialized tooling necessary for the maintenance and repair of their specific NII systems. Awarding to any other entity would be impractical or impossible without significant technology transfer, which is often not feasible or cost-effective for maintenance contracts of this nature. The government would have had to demonstrate that no other responsible source could provide the required services.

How does the $26.2 million contract value compare to historical spending on similar AS&E NII equipment maintenance by CBP or other agencies?

Direct historical spending comparisons for this specific AS&E NII equipment maintenance contract are difficult to ascertain without access to detailed historical procurement data for AS&E's specific systems. However, the $26.2 million figure over approximately 14 months (July 2019 to August 2020) suggests a substantial annual maintenance cost, likely in the range of $20-22 million per year. This level of expenditure is consistent with the high cost of maintaining complex, specialized security and inspection equipment used by federal agencies. To provide a robust comparison, one would need to identify previous contracts for the same or similar AS&E NII models, analyze their duration, scope of work, and total value, and adjust for inflation and any changes in service requirements. Without such granular data, it remains challenging to definitively benchmark this specific award against past spending.

What are the potential risks associated with a sole-source contract for critical equipment maintenance, and what mitigation strategies are in place?

The primary risks associated with a sole-source contract for critical equipment maintenance include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve service quality, and a heightened dependence on a single vendor. This dependence can create vulnerabilities if the contractor experiences financial difficulties, operational disruptions, or decides to discontinue support for the equipment. Mitigation strategies employed by agencies often include rigorous contract negotiation, establishing clear performance metrics and service level agreements (SLAs), conducting regular performance reviews, and potentially building in clauses for price adjustments based on objective market data or requiring the contractor to provide detailed cost breakdowns. For critical systems, agencies may also explore developing in-house maintenance capabilities or fostering competition for future procurements by encouraging alternative vendors to develop expertise.

What is the track record of American Science & Engineering Inc. in providing maintenance services for government contracts, particularly for NII equipment?

American Science & Engineering Inc. (AS&E) has a significant track record as a provider of Non-Intrusive Inspection (NII) systems to government agencies, including U.S. Customs and Border Protection (CBP). Their expertise lies in the design, manufacturing, and deployment of these advanced security screening technologies. Consequently, they are often the primary, if not sole, entity capable of providing specialized maintenance, repair, and upgrade services for their proprietary equipment. Government contract databases would likely show a history of awards to AS&E for maintenance and support services related to their NII systems across various agencies and locations. This history suggests a level of established capability and familiarity with government contracting requirements, though the sole-source nature of many of these awards warrants scrutiny regarding pricing and value.

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

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: $26,253,694

Exercised Options: $26,253,694

Current Obligation: $26,253,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B04C18D00000016

IDV Type: IDC

Timeline