DHS awards $40M for drive-through portals, with limited competition and a long performance period

Contract Overview

Contract Amount: $40,092,572 ($40.1M)

Contractor: American Science & Engineering Inc

Awarding Agency: Department of Homeland Security

Start Date: 2016-09-30

End Date: 2023-08-04

Contract Duration: 2,499 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF DRIVE THROUGH PORTALS WITH INSTALLATION, WARRANTY, TRAINING, AND MAINTENANCE.

Place of Performance

Location: BILLERICA, MIDDLESEX County, MASSACHUSETTS, 01821

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $40.1 million to AMERICAN SCIENCE & ENGINEERING INC for work described as: IGF::OT::IGF DRIVE THROUGH PORTALS WITH INSTALLATION, WARRANTY, TRAINING, AND MAINTENANCE. Key points: 1. The contract value of $40.1 million over nearly 7 years suggests a significant investment in security technology. 2. Limited competition raises questions about potential price inflation and the availability of alternative solutions. 3. The extended performance period of 2499 days (approx. 6.8 years) indicates a long-term need for these portal systems. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor but may not guarantee the lowest price. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation. 6. The product service code (PSC) is missing, hindering direct comparison with similar procurements in the irradiation apparatus manufacturing sector.

Value Assessment

Rating: fair

The total award of $40.1 million over almost seven years averages to approximately $5.9 million per year. Without specific details on the number and type of portals, installation, training, and maintenance included, a precise value-for-money assessment is challenging. However, given the 'NOT COMPETED' status, there's a risk that the pricing may not reflect competitive market rates. Comparing this to similar large-scale security equipment procurements would be necessary for a more robust benchmark.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, AMERICAN SCIENCE & ENGINEERING INC, was considered. This approach is typically used when only one responsible source is available, or in cases of urgent need. The lack of competition means that the government did not explore potential pricing or technological advantages from other qualified vendors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to secure government contracts.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from enhanced border security capabilities through the deployment of these drive-through portals. The services delivered include installation, warranty, training, and maintenance, ensuring the operational readiness of the security equipment. The geographic impact is likely nationwide, supporting CBP's mission at various ports of entry across the United States. The contract supports the workforce involved in the manufacturing, installation, and maintenance of advanced security technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Long contract duration (nearly 7 years) may not adapt well to rapidly evolving security technologies.
Lack of specific performance metrics or KPIs makes it difficult to assess operational effectiveness.
Missing PSC code hinders benchmarking against similar procurements.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Includes comprehensive support services: installation, warranty, training, and maintenance.
Long-term contract indicates a sustained commitment to a critical security function.

Sector Analysis

The contract falls within the Irradiation Apparatus Manufacturing sector, which is a niche area focused on specialized equipment. The total award of $40.1 million over nearly seven years represents a significant, albeit specific, investment. Comparable spending benchmarks would ideally involve other large procurements for advanced security screening or inspection systems, but the lack of a specific PSC code makes direct comparisons difficult. This contract appears to be a substantial, long-term commitment to a particular technology provider for critical border security infrastructure.

Small Business Impact

The data indicates that this contract was not competed and there is no indication of small business set-asides (ss: false, sb: false). This suggests that small businesses were not specifically targeted for this procurement. Consequently, there are no direct subcontracting implications for small businesses stemming from this award, and its impact on the broader small business ecosystem in this sector is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP). As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the lack of competition. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Homeland Security Technology Procurements
Border Security Equipment
Radiation Detection and Screening Systems
Apparatus Manufacturing Contracts

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Long contract duration may not align with technological advancements in security screening.
Lack of detailed technical specifications hinders value assessment.
Absence of defined KPIs and SLAs makes performance monitoring difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $40.1 million to AMERICAN SCIENCE & ENGINEERING INC. IGF::OT::IGF DRIVE THROUGH PORTALS WITH INSTALLATION, WARRANTY, TRAINING, AND MAINTENANCE.

Who is the contractor on this award?

The obligated recipient is AMERICAN SCIENCE & ENGINEERING 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 $40.1 million.

What is the period of performance?

Start: 2016-09-30. End: 2023-08-04.

What is the specific type and quantity of drive-through portals being procured, and what are their technical specifications?

The provided data does not specify the exact type or quantity of drive-through portals. The description 'IGF::OT::IGF DRIVE THROUGH PORTALS WITH INSTALLATION, WARRANTY, TRAINING, AND MAINTENANCE' is generic. To assess value and performance, understanding the specific technology (e.g., X-ray, gamma-ray, other detection methods), throughput capabilities, and integration requirements is crucial. Without this, it's difficult to benchmark the $40.1 million award against industry standards or alternative solutions that might offer similar or superior capabilities.

What was the justification for awarding this contract on a sole-source basis to AMERICAN SCIENCE & ENGINEERING INC?

The data indicates the contract was 'NOT COMPETED' and awarded as a sole-source. Typically, sole-source justifications are based on factors such as the unavailability of other sources, urgent and compelling needs that preclude competition, or specific proprietary technology. For this contract, the justification would need to be formally documented by the Department of Homeland Security, likely citing reasons why AMERICAN SCIENCE & ENGINEERING INC was the only viable option. Without access to that documentation, the rationale remains unclear, raising concerns about potential missed opportunities for competitive pricing.

How does the average annual cost of this contract compare to similar security portal procurements by other federal agencies?

The contract value is $40,019,257.18 over a period of 2499 days, which is approximately 6.85 years. This equates to an average annual cost of roughly $5.87 million. Direct comparison is difficult without knowing the specific capabilities and quantity of portals. However, large-scale security equipment procurements can range significantly. For instance, procurements for advanced cargo inspection systems or full-body scanners have varied widely in cost depending on technology and scale. The sole-source nature of this award suggests its cost may not be optimized compared to competitively bid alternatives.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with the installation, warranty, training, and maintenance components of this contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for the installation, warranty, training, and maintenance services. These are critical for ensuring the effective operation and longevity of the drive-through portals. Without defined metrics for response times, uptime guarantees, training effectiveness, or maintenance schedules, it is challenging to objectively measure the contractor's performance and the overall value delivered to U.S. Customs and Border Protection. Robust SLAs are essential for accountability in long-term service contracts.

What is the historical spending pattern for drive-through portals or similar security equipment by the Department of Homeland Security?

The provided data focuses solely on this single contract award (ID 334517) totaling $40.02 million. It does not offer historical spending context for similar procurements by DHS or CBP. To understand spending patterns, one would need to analyze prior contracts for security portals, inspection systems, or related technologies over several fiscal years. This would help determine if this award represents an increase, decrease, or consistent level of investment in such capabilities and whether previous procurements were also sole-sourced.

What is the track record of AMERICAN SCIENCE & ENGINEERING INC in delivering similar large-scale security technology contracts to the federal government?

AMERICAN SCIENCE & ENGINEERING INC (AS&E) has a history of providing security and inspection systems to government agencies. While this specific contract is a sole-source award, AS&E has been involved in other federal procurements, including those for cargo and baggage screening technologies. Their track record would need to be assessed based on past performance reviews, contract completion success, and adherence to specifications in previous relevant contracts. Information on past performance, including any disputes or contract terminations, would provide a clearer picture of their reliability for this significant DHS contract.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: OSI Systems Inc

Address: 829 MIDDLESEX TPKE, BILLERICA, MA, 01821

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

Financial Breakdown

Contract Ceiling: $40,353,222

Exercised Options: $40,092,572

Current Obligation: $40,092,572

Actual Outlays: $286,022

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSBP1016D00016

IDV Type: IDC

Timeline