DHS awards $63.7M for CT systems, with Analogic Corp. as prime, over 10 years

Contract Overview

Contract Amount: $63,682,522 ($63.7M)

Contractor: Analogic Corp

Awarding Agency: Department of Homeland Security

Start Date: 2022-03-18

End Date: 2033-03-17

Contract Duration: 4,017 days

Daily Burn Rate: $15.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY BASE-SIZED COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT.

Place of Performance

Location: PEABODY, ESSEX County, MASSACHUSETTS, 01960

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $63.7 million to ANALOGIC CORP for work described as: THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY BASE-SIZED COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT. Key points: 1. Value for money assessed through benchmarking against similar procurements and market rates. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and potential for cost overruns in long-term deployments. 4. Performance context relies on successful deployment and integration of CT systems. 5. Sector positioning within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry. 6. The contract's firm-fixed-price structure aims to control costs, but requires careful management of scope.

Value Assessment

Rating: good

The total contract value of $63.7 million over 10 years averages to approximately $6.37 million annually. Benchmarking this against similar procurements for large-scale CT systems is challenging without more specific details on system capabilities and deployment scope. However, the firm-fixed-price nature suggests an attempt to lock in costs. Further analysis would require comparing the per-unit cost of these CT systems to industry standards for comparable technology and features.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 6 bids suggests a reasonably competitive environment, which typically benefits price discovery and can lead to more favorable terms for the government. The specific number of bidders is a positive sign for competition.

Taxpayer Impact: A full and open competition generally leads to better pricing for taxpayers by fostering a competitive marketplace where contractors vie for the best value.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving advanced CT systems for security screening. These systems are intended to enhance security screening capabilities at various locations. The geographic impact is likely nationwide, depending on where the CT systems are deployed. Workforce implications may include training for personnel to operate and maintain the new equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) increases the risk of technological obsolescence or changing security needs.
Potential for scope creep if ancillary equipment requirements are not precisely defined.
Dependence on a single contractor (Analogic Corp.) for a critical security function over an extended period.
Ensuring timely delivery and successful integration across multiple sites could pose logistical challenges.

Positive Signals

Firm-fixed-price contract type helps to control costs and provides budget certainty.
Full and open competition suggests a robust bidding process that likely yielded competitive pricing.
The contract specifies delivery orders, allowing for phased deployment and management of resources.
The award to a known entity (Analogic Corp.) may indicate a level of confidence in their capabilities.

Sector Analysis

This contract falls within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, which is critical for national security and transportation infrastructure. The market for advanced screening technologies, including CT scanners, is competitive, driven by evolving threats and regulatory requirements. Spending in this area is often substantial due to the high cost of specialized equipment and the need for continuous upgrades.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this specific contract (ss: false, sb: false). While the prime contractor is Analogic Corp., there may be opportunities for small businesses to participate as subcontractors, particularly in areas like installation, maintenance, or the provision of ancillary services. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific requirements of the delivery orders.

Oversight & Accountability

Oversight will likely be managed by the contracting officer and program management teams within the Department of Homeland Security and the TSA. Accountability measures are embedded in the firm-fixed-price contract terms and delivery schedules. Transparency is facilitated through contract award databases, though detailed operational performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Homeland Security grants and contracts
Transportation security equipment procurements
Advanced screening technology acquisitions
Medical imaging equipment manufacturing contracts
Federal IT and equipment modernization programs

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for scope creep in ancillary equipment requirements.
Dependence on a single contractor for critical security function over 10 years.
Ensuring consistent performance and support over the contract lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $63.7 million to ANALOGIC CORP. THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY BASE-SIZED COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is ANALOGIC CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $63.7 million.

What is the period of performance?

Start: 2022-03-18. End: 2033-03-17.

What is the historical spending pattern of the TSA on Computed Tomography (CT) systems?

Analyzing historical spending patterns for CT systems by the TSA is crucial for understanding the context of this $63.7 million award. Without specific historical data, it's difficult to definitively state trends. However, procurements for advanced security screening equipment are typically cyclical, driven by technology upgrades, threat assessments, and budget allocations. The TSA has consistently invested in screening technologies, and CT scanners represent a significant advancement over older X-ray systems. A review of past contracts for similar equipment, including their value, duration, and number of bidders, would provide a baseline for assessing whether this current award represents an increase, decrease, or stable level of investment in CT technology.

How does the per-unit cost of these CT systems compare to market rates for similar technology?

Determining the precise per-unit cost benchmark is challenging without knowing the exact specifications and quantities of CT systems procured under this contract. The total award of $63.7 million over 10 years, with 6 delivery orders, suggests a phased acquisition. To benchmark effectively, one would need to identify the specific model or type of CT system being acquired and compare its price against commercial off-the-shelf (COTS) equivalents or similar government contracts. Factors like installation, training, maintenance packages, and software licenses significantly influence the total cost. A comparison to industry pricing for high-throughput, security-grade CT scanners would be necessary to assess value for money. If the average cost per system falls within or below industry averages for comparable capabilities, it would indicate good value.

What is Analogic Corp.'s track record with large federal contracts, particularly in security or imaging systems?

Analogic Corp. has a history of providing medical imaging and security systems. Their track record with large federal contracts, especially within the Department of Homeland Security or similar agencies, is a key indicator of their capability to execute this $63.7 million award. Past performance evaluations, on-time delivery rates, adherence to budget, and the quality of systems provided on previous government contracts would be critical factors. Examining their experience with deploying complex systems like CT scanners in demanding environments, such as airports or border crossings, would offer insight into their reliability. A review of their contract history, including any past performance issues or successes, is essential for assessing the risk associated with this long-term procurement.

What are the specific performance metrics and success criteria for the deployed CT systems?

The success of this $63.7 million contract hinges on the performance and effectiveness of the deployed Computed Tomography (CT) systems. Specific performance metrics are likely detailed within the contract's Statement of Work (SOW) and delivery orders. These typically include factors such as detection rates for prohibited items, screening throughput (passengers per hour), system reliability (uptime percentage), image quality, and ease of use for operators. Success criteria would define the acceptable thresholds for these metrics. For instance, the systems might be required to achieve a certain percentage of threat detection accuracy while maintaining a minimum screening speed. Regular performance reviews and acceptance testing of each deployed system would be crucial for ensuring the government receives the intended security enhancements.

How has the competition level (6 bidders) influenced the pricing and terms of this contract?

The fact that this contract received 6 bids under full and open competition is a positive indicator for price discovery. A larger number of bidders generally intensifies competition, pushing contractors to offer more competitive pricing and favorable terms to secure the award. For a $63.7 million contract spanning 10 years, this level of interest suggests that the market found the opportunity attractive and the requirements achievable. It implies that Analogic Corp.'s winning proposal was likely the most advantageous, considering both price and technical factors, relative to its competitors. This competitive environment helps ensure that taxpayer dollars are used efficiently, as the government benefits from the contractors' efforts to differentiate themselves.

What are the potential risks associated with the 10-year duration of this contract?

A 10-year contract duration for technology-intensive procurements like CT systems presents several potential risks. Firstly, technological advancements could render the procured systems obsolete or less effective before the contract term concludes. Secondly, evolving security threats may necessitate different screening capabilities than those offered by the current technology. Thirdly, long-term contracts can be susceptible to economic fluctuations or changes in government priorities, potentially leading to budget adjustments or contract modifications. Finally, maintaining consistent performance and support from the contractor over such an extended period requires robust oversight and relationship management. The firm-fixed-price nature helps mitigate cost escalation, but risks related to obsolescence and changing requirements remain.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 70T04021R7672N041

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8 CENTENNIAL DR, PEABODY, MA, 01960

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: $276,081,556

Exercised Options: $70,333,522

Current Obligation: $63,682,522

Actual Outlays: $49,828,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 70T04021G7672N001

IDV Type: BOA

Timeline