DHS awards $19.7M contract for MSEDS equipment to Leidos, raising questions about competition and value

Contract Overview

Contract Amount: $19,698,269 ($19.7M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2024-05-28

End Date: 2027-03-28

Contract Duration: 1,034 days

Daily Burn Rate: $19.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURCHASE AND INSTALLATION OF MSEDS EQUIPMENT.

Place of Performance

Location: TEWKSBURY, MIDDLESEX County, MASSACHUSETTS, 01876

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $19.7 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: THE PURCHASE AND INSTALLATION OF MSEDS EQUIPMENT. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant investment in security detection equipment highlights a focus on infrastructure protection. 3. Long contract duration of over 3 years suggests a need for sustained operational support. 4. The firm-fixed-price structure aims to control costs, but the lack of competition is a concern. 5. This award falls under Irradiation Apparatus Manufacturing, a niche sector within the broader industrial landscape. 6. No small business set-aside was utilized, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract value of $19.7 million for MSEDS equipment appears substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of transparency in the procurement process makes a definitive value-for-money assessment challenging. Further analysis would be needed to determine if this price reflects fair market value given the sole-source nature of the award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Leidos Security Detection & Automation, Inc., was solicited. This approach bypasses the typical competitive bidding process, which usually involves multiple vendors submitting proposals. The lack of competition means there was no direct price comparison or incentive for vendors to offer their best pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the most economical solution.

Public Impact

The Department of Homeland Security (DHS) and its Transportation Security Administration (TSA) are the primary beneficiaries, enhancing their security screening capabilities. The contract will provide essential MSEDS (Multi-Stage Explosives Detection System) equipment, crucial for detecting threats at various points. The geographic impact is likely nationwide, as TSA operates at airports and other transportation hubs across the United States. The acquisition of advanced security equipment supports the federal government's mission to ensure public safety and national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially inflates costs for taxpayers.
Lack of transparency in the procurement process hinders a thorough value-for-money assessment.
Absence of small business participation may represent a missed opportunity for economic inclusion.

Positive Signals

Firm-fixed-price contract structure provides cost certainty for the government.
Awarding to a known entity like Leidos may leverage existing expertise and potentially streamline implementation.
Investment in critical security infrastructure demonstrates a commitment to national security.

Sector Analysis

The contract falls under the Irradiation Apparatus Manufacturing sector, a specialized area within industrial equipment production. This sector is critical for developing and supplying advanced detection and screening technologies used in security and safety applications. The market for such equipment is often characterized by high barriers to entry due to technological complexity and stringent regulatory requirements. Spending in this area is typically driven by government procurement for defense, homeland security, and critical infrastructure protection.

Small Business Impact

This contract was not competed with a small business set-aside. Consequently, there are no direct subcontracting requirements mandated for small businesses through this award. This represents a missed opportunity to engage small businesses in the supply chain for critical security equipment, potentially limiting their access to federal contracts in this specialized sector.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Homeland Security and the Transportation Security Administration. As a sole-source award, it may receive heightened scrutiny from oversight bodies like the Government Accountability Office (GAO) or the DHS Office of Inspector General (OIG) to ensure the justification for non-competition is sound and the pricing is reasonable. Transparency could be enhanced through public reporting of contract performance and any modifications.

Related Government Programs

Transportation Security Equipment Procurement
Homeland Security Technology Acquisition
Explosives Detection Systems
Federal Apparatus Manufacturing Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Limited transparency in procurement process.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $19.7 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. THE PURCHASE AND INSTALLATION OF MSEDS EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is LEIDOS SECURITY DETECTION & AUTOMATION, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2024-05-28. End: 2027-03-28.

What is the specific justification provided by DHS for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as urgent and compelling needs, unique capabilities of a single contractor, or when only one responsible source is available. Without the official justification document, it is impossible to ascertain the precise rationale. However, the 'NOT COMPETED' designation strongly suggests that a competitive process was deemed unnecessary or unfeasible by the contracting agency, likely due to factors like specialized technology, existing system integration, or limited vendor availability in the specific niche of MSEDS equipment.

How does the $19.7 million contract value compare to historical spending on similar MSEDS equipment by the TSA?

The provided data does not contain historical spending information for similar MSEDS equipment. To conduct a comparative analysis, one would need access to historical contract databases or agency procurement reports detailing previous acquisitions of MSEDS or comparable detection systems. Such a comparison would involve identifying contracts with similar scope, technology, and quantity, and then analyzing their values, contract types, and competition levels. Without this historical context, it is challenging to determine if the $19.7 million represents an increase, decrease, or stable level of investment for this type of equipment.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. These details are typically outlined in the contract's statement of work (SOW) or performance work statement (PWS). For security equipment like MSEDS, common KPIs might include equipment uptime, detection accuracy rates, response times for maintenance and support, and successful integration with existing security systems. SLAs would define the expected level of service for these metrics, often with associated penalties for non-compliance. These elements are crucial for measuring contractor performance and ensuring the government receives the intended value.

What is the track record of Leidos Security Detection & Automation, Inc. in delivering similar security detection systems to government agencies?

Leidos Security Detection & Automation, Inc. (and its predecessors/related entities) has a significant track record in providing security and detection solutions to government agencies, including the Department of Homeland Security. They are known for supplying various screening technologies, including explosives detection systems, baggage scanners, and other security-related equipment. Their experience often involves large-scale deployments and integration with complex security infrastructures. While specific performance details for past contracts are not in the provided data, their continued presence as a prime contractor in this sector suggests a generally accepted capability and past performance history with federal clients.

What are the potential risks associated with a sole-source award for critical security equipment?

The primary risk associated with a sole-source award for critical security equipment is the potential for inflated costs due to the lack of competitive bidding. Without competing offers, the government may pay a premium that could have been avoided through a competitive process. Another risk is reduced innovation, as the sole provider may have less incentive to develop cutting-edge solutions. Furthermore, reliance on a single supplier can create vulnerabilities if that supplier faces financial difficulties, operational issues, or supply chain disruptions. Finally, the lack of transparency in the procurement process can lead to public or congressional scrutiny regarding fairness and value for taxpayer money.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE RADCLIFF RD, TEWKSBURY, MA, 01876

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: $19,718,269

Exercised Options: $19,718,269

Current Obligation: $19,698,269

Actual Outlays: $11,552,294

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 70T04019D9CAP1049

IDV Type: IDC

Timeline