DHS leases X-ray machines for $27.5M over 5 years, awarded via full and open competition

Contract Overview

Contract Amount: $27,518 ($27.5K)

Contractor: Smiths Detection Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2024-04-01

End Date: 2029-03-31

Contract Duration: 1,825 days

Daily Burn Rate: $15/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LEASE OF X-RAY MACHINES

Place of Performance

Location: JAMAICA, QUEENS County, NEW YORK, 11432

State: New York Government Spending

Plain-Language Summary

Department of Homeland Security obligated $27,518.04 to SMITHS DETECTION INC. for work described as: LEASE OF X-RAY MACHINES Key points: 1. Value for money appears reasonable given the 5-year lease term for critical equipment. 2. Full and open competition suggests a competitive bidding process, likely leading to fair pricing. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. Leasing rather than purchasing may offer flexibility and avoid obsolescence for X-ray technology. 5. This contract supports homeland security operations, specifically in screening and detection.

Value Assessment

Rating: good

The contract value of $27.5 million over five years for X-ray machine leases appears to be within a reasonable range for specialized equipment. Benchmarking against similar federal or commercial leases for comparable X-ray screening technology would provide a more precise value assessment. However, the firm fixed-price nature of the contract helps control costs, and the 5-year term allows for consistent operational support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and terms. The specific number of bidders is not provided, but the method of competition suggests a robust process aimed at achieving market-driven pricing.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces, preventing potential overpayment that could occur with less competitive solicitations.

Public Impact

Benefits the Department of Homeland Security by providing essential X-ray equipment for operational needs. Services delivered include the leasing and likely maintenance of X-ray machines, crucial for security screening. Geographic impact is centered in New York (ST='NY', SN='NEW YORK'), where the equipment will be deployed. Workforce implications include enabling security personnel to perform their duties more effectively with modern equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits a full assessment of competitive intensity.
The exact specifications and capabilities of the leased X-ray machines are not detailed, making direct performance comparisons difficult.
Potential for equipment obsolescence within the 5-year lease term if technology advances rapidly.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent procurement process.
Firm fixed-price contract type provides cost certainty for the government.
Leasing offers flexibility compared to outright purchase, allowing for potential upgrades or changes in technology needs.

Sector Analysis

The market for X-ray machines and related leasing services is part of the broader industrial and commercial machinery sector. This contract falls under the 'Other Commercial and Industrial Machinery and Equipment Rental and Leasing' category (NAICS 532490). Spending in this area supports government agencies' needs for specialized equipment without the burden of direct ownership and maintenance, often involving significant technological advancements.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (SB=false). There is no explicit information on subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited unless the prime contractor voluntarily engages small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and procurement offices. The firm fixed-price nature provides some inherent accountability. Transparency is supported by the public award data. Further oversight could involve performance reviews and audits by DHS's Inspector General, particularly concerning equipment functionality and adherence to lease terms.

Related Government Programs

Homeland Security Equipment Leases
Commercial and Industrial Machinery Leasing
Federal Security Screening Equipment Contracts

Risk Flags

Potential for technology obsolescence within the lease term.
Limited transparency on the number of bidders in the competition.
Lack of detailed performance metrics for the leased equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $27,518.04 to SMITHS DETECTION INC.. LEASE OF X-RAY MACHINES

Who is the contractor on this award?

The obligated recipient is SMITHS DETECTION INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $27,518.04.

What is the period of performance?

Start: 2024-04-01. End: 2029-03-31.

What is the track record of Smiths Detection Inc. in providing similar X-ray equipment to government agencies?

Smiths Detection Inc. is a well-established provider of security screening technology, including X-ray systems, to government agencies worldwide. They have a significant presence in the aviation, ports, borders, and critical infrastructure security sectors. Their track record typically involves supplying advanced detection and screening equipment. While specific performance metrics for this particular lease are not detailed in the provided data, the company's general reputation suggests a capacity to deliver reliable technology. Further analysis would require examining past performance evaluations and contract histories with agencies like DHS or its components to assess timeliness, equipment reliability, and customer satisfaction.

How does the lease cost compare to purchasing similar X-ray machines outright?

Directly comparing the lease cost to an outright purchase requires knowing the purchase price of comparable X-ray machines and the government's expected utilization period. If the government intended to use the machines for longer than the 5-year lease term, purchasing might be more cost-effective in the long run, assuming maintenance costs are manageable. Conversely, leasing offers flexibility, avoids large upfront capital expenditure, and can include maintenance and upgrades, which might make it more attractive if the technology is expected to evolve rapidly or if budget constraints favor operational expenses over capital investments. Without specific purchase price data and anticipated ownership duration, a definitive cost-benefit analysis is challenging.

What are the primary risks associated with leasing X-ray machines instead of purchasing them?

The primary risks associated with leasing X-ray machines instead of purchasing include potential long-term cost inefficiency if the machines are needed beyond the lease term, and the possibility of being locked into technology that becomes obsolete before the lease ends. There's also a risk that maintenance and service clauses in the lease agreement might not fully cover all eventualities or could be subject to price increases upon renewal. Furthermore, if the government requires significant customization or integration of the X-ray systems into existing infrastructure, leasing might offer less flexibility compared to owned equipment. However, leasing mitigates risks related to depreciation, disposal, and the burden of managing maintenance contracts independently.

How effective are X-ray machines in fulfilling the Department of Homeland Security's screening and detection mission?

X-ray machines are a foundational technology for the Department of Homeland Security's mission in screening passengers, baggage, cargo, and mail for threats. They are highly effective at detecting a wide range of prohibited items, contraband, and potential weapons that may not be visible through other means. Their effectiveness is enhanced by advanced imaging capabilities, including dual-energy systems that help differentiate materials. While X-ray technology is crucial, its overall effectiveness is part of a layered security approach that includes other screening technologies (e.g., millimeter wave, trace detection) and human analysis. The specific effectiveness of the leased machines will depend on their technological sophistication, proper operation, and integration into broader security protocols.

What has been the historical spending pattern for X-ray machine leases or purchases by the Department of Homeland Security?

Historical spending patterns for X-ray machines by the Department of Homeland Security (DHS) would likely show a mix of procurement and leasing activities across its various components, such as Customs and Border Protection (CBP), Transportation Security Administration (TSA), and others. Spending would fluctuate based on technology upgrades, operational needs, and budget allocations. Leasing is often employed for equipment requiring frequent updates or for managing capital expenditures. A detailed analysis would involve aggregating spending data from relevant NAICS codes (like 532490 for equipment rental and leasing, or manufacturing codes for purchases) over several fiscal years to identify trends, major contract awards, and the balance between leasing and buying.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Other Commercial and Industrial Machinery and Equipment Rental and Leasing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2202 LAKESIDE BLVD, EDGEWOOD, MD, 21040

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

Financial Breakdown

Contract Ceiling: $45,863

Exercised Options: $27,518

Current Obligation: $27,518

Actual Outlays: $12,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFP321DEH000001

IDV Type: IDC

Timeline