DHS awards $17.6M sole-source contract for credential authentication technology support to IDEMIA

Contract Overview

Contract Amount: $17,652,020 ($17.7M)

Contractor: Idemia Identity & Security USA LLC

Awarding Agency: Department of Homeland Security

Start Date: 2022-07-13

End Date: 2027-02-03

Contract Duration: 1,666 days

Daily Burn Rate: $10.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CREDENTIAL AUTHENTICATION TECHNOLOGY (CAT) ORIGINAL EQUIPMENT MANUFACTURER (OEM) WARRANTY, ENGINEERING AND CYBERSECURITY SUPPORT.

Place of Performance

Location: BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01821

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $17.7 million to IDEMIA IDENTITY & SECURITY USA LLC for work described as: CREDENTIAL AUTHENTICATION TECHNOLOGY (CAT) ORIGINAL EQUIPMENT MANUFACTURER (OEM) WARRANTY, ENGINEERING AND CYBERSECURITY SUPPORT. Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract covers OEM warranty, engineering, and cybersecurity support for credential authentication technology. 3. A firm-fixed-price structure aims to provide cost certainty for the government. 4. The duration of the contract is over 4 years, indicating a long-term need. 5. The primary agency is DHS, with the Transportation Security Administration as the specific service area. 6. The North American Industry Classification System (NAICS) code suggests a focus on system and instrument manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar services. The firm-fixed-price structure provides some cost predictability. However, the absence of competition raises concerns about whether the government secured the best possible price. Further analysis would require understanding the specific technical requirements and the market for these specialized OEM services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology or existing infrastructure. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which could have driven down prices through a competitive bidding process.

Taxpayer Impact: Taxpayers may not benefit from the potential cost efficiencies that competition can generate. Without a competitive process, there is a risk that the price paid is higher than it would be in a more open market.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving critical support for its credential authentication systems. This contract ensures the continued operational integrity and cybersecurity of systems used for identity verification. The services provided are essential for maintaining security at transportation hubs. The contract supports specialized engineering and cybersecurity roles related to OEM warranty services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing.
Potential for vendor lock-in due to specialized OEM support.
Cybersecurity support is critical, but the specific scope and effectiveness require ongoing monitoring.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Long-term contract (over 4 years) suggests a stable and ongoing need for these services.
Focus on engineering and cybersecurity indicates a commitment to system reliability and security.

Sector Analysis

This contract falls within the broader 'Information Technology' or 'Defense Industrial Base' sectors, specifically related to system and instrument manufacturing (NAICS 334511). The market for credential authentication technology and associated OEM support is specialized, often dominated by a few key players who develop and maintain these proprietary systems. Benchmarking spending in this niche requires comparing it to similar sole-source or limited-competition contracts for specialized security and identification technologies within federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized OEM support required for credential authentication technology, it is unlikely that small businesses would be primary awardees for the prime contract. Subcontracting opportunities for small businesses may exist, but would depend on the prime contractor's strategy and the specific technical needs.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Homeland Security and the Transportation Security Administration contracting officers and program managers. Transparency is facilitated through contract databases like FPDS. Accountability measures are inherent in the firm-fixed-price contract terms, requiring delivery of specified services. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DHS Credentialing Programs
TSA Security Technology Procurement
Identity Management Systems Contracts
OEM Support Services for Federal Agencies

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Reliance on a single vendor for critical technology support

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $17.7 million to IDEMIA IDENTITY & SECURITY USA LLC. CREDENTIAL AUTHENTICATION TECHNOLOGY (CAT) ORIGINAL EQUIPMENT MANUFACTURER (OEM) WARRANTY, ENGINEERING AND CYBERSECURITY SUPPORT.

Who is the contractor on this award?

The obligated recipient is IDEMIA IDENTITY & SECURITY USA LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2022-07-13. End: 2027-02-03.

What is the track record of IDEMIA IDENTITY & SECURITY USA LLC with the Department of Homeland Security?

IDEMIA IDENTITY & SECURITY USA LLC has a history of contracts with the Department of Homeland Security (DHS). Analyzing their past performance within DHS, particularly with the Transportation Security Administration (TSA), would reveal their reliability in delivering similar services. This includes examining past contract values, durations, and any reported issues or successes. A review of their award history can indicate their experience with credential authentication technologies and cybersecurity support, providing context for their current sole-source award. Understanding their performance on previous DHS contracts is crucial for assessing the risk associated with this new award and ensuring taxpayer funds are used effectively.

How does the pricing of this contract compare to similar sole-source awards for OEM warranty and support?

Direct comparison of pricing for this $17.6 million contract is difficult without access to detailed pricing structures of comparable sole-source awards for OEM warranty, engineering, and cybersecurity support. Sole-source contracts inherently lack the price discovery mechanism of competition. To assess value, one would need to benchmark the per-unit costs or service rates against industry standards for similar specialized technologies, if available. Alternatively, comparing the total contract value against the scope of work and expected deliverables, considering the unique nature of OEM support, is necessary. The firm-fixed-price nature provides some predictability, but the absence of competition means a robust external benchmark is essential for a thorough value assessment.

What are the primary risks associated with a sole-source award for critical cybersecurity support?

The primary risk associated with a sole-source award for critical cybersecurity support is the lack of competitive pressure, which can lead to inflated pricing and potentially less innovation. Without multiple vendors vying for the contract, the government may not secure the most cost-effective solution or the most advanced technological offerings. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future, even if performance issues arise. There's also a risk that the vendor may not prioritize the government's needs as highly as they would in a competitive environment. Robust oversight and clear performance metrics are crucial to mitigate these risks.

How effective is the Transportation Security Administration's credential authentication technology, and is this contract essential for its operation?

The effectiveness of the Transportation Security Administration's (TSA) credential authentication technology (CAT) is paramount for national security and efficient passenger processing. This contract, covering OEM warranty, engineering, and cybersecurity support, is likely essential for maintaining the operational readiness and security of these critical systems. CAT systems are used to verify identities and travel documents, playing a vital role in preventing unauthorized access and ensuring compliance with security regulations. Without ongoing OEM support, including crucial cybersecurity updates and engineering expertise, these systems could degrade, become vulnerable to cyber threats, or experience significant downtime, thereby compromising the TSA's mission.

What has been the historical spending by DHS on credential authentication technology and related support services?

Historical spending by the Department of Homeland Security (DHS) on credential authentication technology (CAT) and related support services would likely show a consistent investment in identity verification and security infrastructure. Analyzing past contract data for similar systems, including OEM support, engineering, and cybersecurity, would provide a baseline for current expenditures. This analysis would reveal trends in spending, identify key contractors, and highlight any significant increases or decreases in investment over time. Understanding this historical context is crucial for evaluating whether the current $17.6 million award represents a reasonable continuation of investment or a notable shift in spending patterns for these critical security technologies.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70T04022R7672N006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 296 CONCORD RD STE 300, BILLERICA, MA, 01821

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,133,976

Exercised Options: $17,652,020

Current Obligation: $17,652,020

Actual Outlays: $7,954,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline