Homeland Security's $23.1M contract for mobile X-ray cargo inspection systems awarded to Rapiscan Systems Inc

Contract Overview

Contract Amount: $23,143,772 ($23.1M)

Contractor: Rapiscan Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2007-09-27

End Date: 2012-09-30

Contract Duration: 1,830 days

Daily Burn Rate: $12.6K/day

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MOBILE X-RAY CARGO INSPECTION SYSTEMS

Place of Performance

Location: HAWTHORNE, LOS ANGELES County, CALIFORNIA, 90250

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $23.1 million to RAPISCAN SYSTEMS INC for work described as: MOBILE X-RAY CARGO INSPECTION SYSTEMS Key points: 1. The contract value of $23.1 million over five years suggests a significant investment in border security technology. 2. The single award indicates a potential lack of robust competition or a highly specialized requirement. 3. The duration of the contract (1830 days) points to a long-term need for these inspection systems. 4. The geographic location of performance in California may reflect specific operational needs or logistical considerations. 5. The fixed-price contract type aims to control costs, but potential for cost overruns exists if scope changes. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The total contract value of $23.1 million for mobile X-ray cargo inspection systems appears substantial. Benchmarking this against similar contracts is challenging without more specific details on system capabilities and market prices. However, the duration of the contract (over five years) suggests a steady, albeit potentially high, per-unit cost over its lifecycle. The fixed-price nature provides some cost certainty, but the overall value proposition depends heavily on the system's effectiveness and reliability in real-world inspection scenarios.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source action, meaning it was not competed among multiple vendors. This could be due to a variety of reasons, such as the unique capabilities of Rapiscan Systems' product, a previous sole-source justification, or a lack of market research to identify alternative sources. The absence of competition means that price discovery through market forces was limited, potentially leading to higher costs for the government compared to a competitive procurement.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive bidding, which typically drives down prices. This could result in a less favorable price for the government and, by extension, taxpayers.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) personnel who will utilize these systems for enhanced cargo inspection. The services delivered include the provision of advanced mobile X-ray inspection technology to detect illicit goods and contraband. The geographic impact is focused on California, likely at ports of entry or other strategic locations within the state. Workforce implications may include training for CBP officers on operating and maintaining the new inspection systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of small business participation may reduce opportunities for smaller firms in the supply chain.
Long contract duration could lead to technology obsolescence if not managed proactively.

Positive Signals

Award to an established vendor like Rapiscan Systems may indicate reliability and proven technology.
Fixed-price contract provides cost certainty for the government.
Focus on mobile systems suggests adaptability and deployment flexibility for inspection operations.

Sector Analysis

The market for cargo inspection systems, particularly mobile X-ray units, is a specialized segment within the broader security and defense industry. This sector is characterized by high technological barriers to entry and stringent performance requirements. Spending in this area is driven by national security needs, trade facilitation, and efforts to combat smuggling. Comparable spending benchmarks are difficult to establish without detailed system specifications, but government procurements in this niche can range from tens to hundreds of millions of dollars depending on the scale and technology involved.

Small Business Impact

This contract does not appear to have included a small business set-aside. The sole-source nature of the award further limits the direct involvement of small businesses unless they are subcontractors to the prime contractor, Rapiscan Systems Inc. Further analysis would be needed to determine if subcontracting plans were mandated and if small businesses were indeed engaged in fulfilling parts of this contract, which could impact the broader small business ecosystem in this specialized technology sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Customs and Border Protection (CBP) within the Department of Homeland Security. Accountability measures would be tied to contract performance clauses, delivery schedules, and system specifications. Transparency is generally facilitated through contract award databases, but detailed operational performance data may be considered sensitive. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Homeland Security Advanced Technology
U.S. Customs and Border Protection Equipment Procurement
Cargo and Container Inspection Systems
Radiation Detection and Imaging Technology

Risk Flags

Sole-source award may indicate limited competition.
Lack of small business participation noted.
Contract duration is lengthy, potentially leading to technology obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $23.1 million to RAPISCAN SYSTEMS INC. MOBILE X-RAY CARGO INSPECTION SYSTEMS

Who is the contractor on this award?

The obligated recipient is RAPISCAN SYSTEMS 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 $23.1 million.

What is the period of performance?

Start: 2007-09-27. End: 2012-09-30.

What is the specific model of the mobile X-ray cargo inspection system procured, and what are its key technical specifications?

The provided data does not specify the exact model of the mobile X-ray cargo inspection system. However, based on the contractor, Rapiscan Systems Inc., it is likely one of their advanced mobile scanning solutions designed for non-intrusive inspection of cargo containers and vehicles. These systems typically employ high-energy X-ray sources and sophisticated detectors to generate detailed images of scanned objects, allowing operators to identify contraband, weapons, or other illicit materials. Key technical specifications would generally include penetration depth, image resolution, scanning speed, radiation safety features, and mobility/deployment characteristics. Without the specific model, a precise technical comparison is not possible.

How does the per-unit cost of these systems compare to similar systems procured by other federal agencies or international partners?

The provided data does not allow for a direct per-unit cost calculation as the total contract value ($23,143,772.04) is for an unspecified number of systems and associated services over a 5-year period (1830 days). Furthermore, the contract was awarded sole-source, limiting direct price comparisons based on competitive bidding. To benchmark the per-unit cost, one would need to know the quantity of systems delivered and compare that to publicly available data on similar mobile X-ray systems procured competitively by agencies like the Department of Defense or international allies. Given the specialized nature of this technology and the sole-source award, it is plausible that the per-unit cost is at the higher end of the market spectrum.

What are the primary risks associated with a sole-source award for critical security equipment like cargo inspection systems?

A primary risk of a sole-source award for critical security equipment is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than necessary. Another risk is reduced innovation, as the vendor may have less incentive to improve their product or offer cutting-edge features if they are guaranteed the contract. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process. Dependence on a single supplier also poses a risk if that supplier experiences production issues, financial instability, or decides to discontinue the product line, potentially disrupting critical security operations.

What is the historical spending pattern for mobile X-ray cargo inspection systems by U.S. Customs and Border Protection?

The provided data represents a single contract award of $23.1 million for mobile X-ray cargo inspection systems to Rapiscan Systems Inc. by U.S. Customs and Border Protection (CBP) from 2007 to 2012. To understand the historical spending pattern, one would need to analyze CBP's procurement data over a longer period, looking for other contracts awarded for similar systems, including those from different vendors and under different contract types (e.g., competitive bids, other sole-source awards). This would reveal trends in spending volume, technology adoption, and vendor reliance. Without access to a broader dataset, this single contract provides only a snapshot of spending during that specific timeframe.

How effective have Rapiscan Systems' mobile X-ray units been in previous deployments for cargo inspection?

The effectiveness of Rapiscan Systems' mobile X-ray units in previous deployments is not detailed in the provided contract data. To assess effectiveness, one would need to consult performance reports, operational assessments, and potentially Inspector General reports related to this or similar contracts. Factors contributing to effectiveness would include the system's ability to accurately detect threats, its reliability in diverse environmental conditions, the ease of use for operators, and its integration into existing inspection workflows. Anecdotal evidence or case studies from CBP or other users would be valuable in evaluating the system's real-world performance beyond the contractual specifications.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Contractor Details

Parent Company: OSI Systems Inc (UEI: 178295812)

Address: 3232 W EL SEGUNDO BLVD, HAWTHORNE, CA, 90250

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,143,772

Exercised Options: $23,143,772

Current Obligation: $23,143,772

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSBP1005D00988

IDV Type: IDC

Timeline