DHS awards $26M for NII equipment upgrade and maintenance to American Science & Engineering Inc

Contract Overview

Contract Amount: $26,022,939 ($26.0M)

Contractor: American Science & Engineering Inc

Awarding Agency: Department of Homeland Security

Start Date: 2022-07-01

End Date: 2024-09-22

Contract Duration: 814 days

Daily Burn Rate: $32.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UPGRADE & MAINTENANCE OF NII EQUIPMENT

Place of Performance

Location: BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01821

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $26.0 million to AMERICAN SCIENCE & ENGINEERING INC for work described as: UPGRADE & MAINTENANCE OF NII EQUIPMENT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The contract duration of 814 days suggests a significant need for ongoing support. 3. The firm fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 4. The North American Industry Classification System (NAICS) code 811219 indicates a focus on repair and maintenance of electronic equipment. 5. The contract is not set aside for small businesses, indicating a potential lack of focus on supporting smaller enterprises in this procurement. 6. The award is a delivery order under a larger contract vehicle, suggesting it's part of a broader acquisition strategy.

Value Assessment

Rating: fair

The contract value of $26 million for NII equipment upgrade and maintenance over approximately two years appears substantial. Without comparable sole-source contracts for similar NII equipment maintenance, it is difficult to definitively benchmark the value. However, the lack of competition inherently limits the government's ability to secure the best possible pricing. The firm fixed-price nature of the contract provides cost certainty, but the absence of competitive bidding means potential savings may have been forgone.

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 bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they typically result in less price pressure and potentially higher costs for the government compared to full and open competition.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not leverage multiple offers to drive down prices.

Public Impact

The Department of Homeland Security (DHS) benefits through the continued operation and maintenance of its National Imaging (NII) equipment. This contract ensures the upgrade and upkeep of critical inspection and security technology used by U.S. Customs and Border Protection. The services delivered are essential for border security and trade facilitation operations. The primary geographic impact is likely at U.S. ports of entry and border crossings where NII equipment is deployed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of small business set-aside may limit opportunities for smaller firms in this procurement.
The specific nature of NII equipment maintenance may require specialized expertise, but this is not explicitly detailed as a justification for sole-sourcing.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
The contract is a delivery order under an existing contract vehicle, suggesting a streamlined process for an established relationship.
The award ensures the continued functionality of critical security equipment.

Sector Analysis

The market for electronic and precision equipment repair and maintenance, categorized under NAICS code 811219, is diverse. This contract falls within the broader defense and security sector, where specialized equipment maintenance is crucial for operational readiness. Spending in this area is often driven by the need to maintain complex systems like NII scanners, which are vital for national security and trade enforcement. Benchmarking requires comparison to similar maintenance contracts for specialized security screening equipment.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This means that opportunities for small businesses to compete for or subcontract on this specific award were not prioritized. While larger, specialized firms often handle complex equipment maintenance, the absence of a small business focus in this procurement means potential benefits to the small business ecosystem are not realized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. As a delivery order under a larger contract vehicle, existing oversight mechanisms for that vehicle would apply. Transparency is facilitated by public contract databases, but the sole-source nature limits detailed public insight into the negotiation and justification process. 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
National Imaging Equipment - Service Contracts
Federal IT and Equipment Maintenance Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $26.0 million to AMERICAN SCIENCE & ENGINEERING INC. UPGRADE & MAINTENANCE OF 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 $26.0 million.

What is the period of performance?

Start: 2022-07-01. End: 2024-09-22.

What is the track record of American Science & Engineering Inc. with DHS and similar agencies for NII equipment maintenance?

American Science & Engineering Inc. (AS&E) is a known provider of advanced security screening solutions. Their track record with the Department of Homeland Security (DHS) and other federal agencies likely includes previous contracts for the supply and maintenance of NII (Non-Intrusive Inspection) systems. To assess their performance on this specific contract, one would need to examine past performance reviews, any documented issues or successes on prior similar contracts, and their overall history of meeting delivery schedules and technical requirements. Without access to detailed past performance information, it's difficult to provide a definitive assessment, but their specialization in this area suggests a degree of established capability.

How does the $26 million value compare to similar NII equipment maintenance contracts?

Benchmarking the $26 million value requires comparing it to contracts for the upgrade and maintenance of similar NII equipment across federal agencies. Factors influencing cost include the type and quantity of equipment, the scope of services (e.g., preventative maintenance, emergency repairs, software upgrades), the duration of the contract, and the specific technologies involved. Given that this is a sole-source award, direct price comparisons are challenging. However, if comparable contracts awarded through full and open competition exist, they could serve as a benchmark. The duration of 814 days (approx. 2.2 years) suggests a significant scope of work, making the annual cost approximately $11.8 million. This figure needs to be evaluated against market rates for specialized security equipment maintenance.

What are the primary risks associated with this sole-source contract for NII equipment maintenance?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. Without competing offers, the government may not be achieving the best possible price or value. Another risk is vendor lock-in, where the government becomes heavily reliant on a single provider for critical maintenance, potentially limiting future flexibility or innovation. Furthermore, if AS&E's performance falters, the sole-source nature could complicate finding an alternative provider quickly. Ensuring robust contract management and performance monitoring becomes crucial to mitigate these risks.

How effective is the firm fixed-price contract type in managing costs for this NII equipment maintenance?

The firm fixed-price (FFP) contract type is generally effective in managing costs by shifting the risk of cost overruns to the contractor. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's actual costs. This provides budget certainty for the government. However, the effectiveness of FFP in achieving the lowest possible price is significantly diminished when the contract is awarded on a sole-source basis. While the government knows the final price, the absence of competition means that price may not be the most economical. The FFP structure here primarily ensures cost certainty rather than cost minimization.

What are the historical spending patterns for NII equipment maintenance by DHS or CBP?

Analyzing historical spending patterns for NII equipment maintenance by DHS and CBP would involve reviewing contract databases for previous awards related to similar equipment. This would help establish a baseline for annual expenditures, identify trends in contract values and durations, and understand the typical procurement methods used (competitive vs. sole-source). Understanding past spending can reveal whether this $26 million award represents an increase, decrease, or consistent level of investment in NII equipment upkeep. It can also highlight if sole-source awards have been a recurring practice for this type of service.

What are the implications of the contract duration (814 days) on the overall value and risk?

The contract duration of 814 days, approximately 2.2 years, indicates a substantial and ongoing need for NII equipment upgrade and maintenance services. A longer duration can sometimes lead to better value if it allows for economies of scale or more predictable planning for both the government and the contractor. However, it also extends the period during which the government is committed to a single vendor, potentially increasing the risk associated with vendor performance or market changes. For a sole-source contract, a longer duration amplifies the risk of paying a non-competitive price over an extended period.

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: $30,362,736

Exercised Options: $26,022,939

Current Obligation: $26,022,939

Actual Outlays: $24,107,548

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B04C18D00000016

IDV Type: IDC

Timeline