DHS awarded $38.3M for security equipment maintenance, with limited competition and no small business set-aside

Contract Overview

Contract Amount: $38,276,895 ($38.3M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2006-03-10

End Date: 2006-09-30

Contract Duration: 204 days

Daily Burn Rate: $187.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Other

Official Description: PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $38.3 million to SMITHS DETECTION, INC for work described as: PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT Key points: 1. The contract value of $38.3M for preventive and corrective maintenance of EDS equipment appears substantial. 2. Limited competition for this contract may have impacted pricing and value for money. 3. The absence of a small business set-aside could limit opportunities for smaller specialized firms. 4. The contract duration of 204 days is relatively short for a maintenance agreement of this scale. 5. The primary contractor, Smiths Detection, Inc., has secured this significant award. 6. The service category, Security Systems Services (except Locksmiths), indicates a specialized technical need.

Value Assessment

Rating: fair

Benchmarking the value for $38.3M in preventive and corrective maintenance for EDS equipment is challenging without specific performance metrics or comparable contracts. The price per day is approximately $187,632, which seems high for maintenance services alone, suggesting it may include significant parts or specialized labor. Further analysis would require understanding the scope of 'preventive and corrective maintenance' and the specific types of EDS equipment covered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as the government did not benefit from multiple offers to drive down prices.

Public Impact

The Transportation Security Administration (TSA) benefits from this contract through the maintenance of essential Explosives Detection Systems (EDS) equipment. This ensures the continued operational readiness of security screening technology at airports or other critical infrastructure. The primary beneficiaries are air travelers and the general public, who rely on effective security measures. The contract supports specialized technical jobs related to the maintenance and repair of advanced security equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of small business participation may exclude specialized smaller firms from contributing.
The high daily cost warrants scrutiny to ensure value for money is achieved.
Short contract duration for a significant maintenance task could indicate a stop-gap measure or require subsequent contracts.

Positive Signals

Ensures critical EDS equipment remains operational, contributing to national security.
Award to a known entity (Smiths Detection, Inc.) may imply specialized expertise.
The contract addresses a clear need for preventive and corrective maintenance.

Sector Analysis

The market for security systems services, particularly for specialized equipment like EDS, is dominated by a few key players with advanced technological capabilities. This contract falls within the broader security and defense industrial base, where government procurement often involves complex systems and specialized maintenance. The size of this specific award suggests a significant operational requirement for the TSA, potentially covering a substantial portion of their EDS maintenance needs within the specified period.

Small Business Impact

This contract was not competed with a small business set-aside. Consequently, small businesses were not specifically targeted for this procurement. This means that opportunities for subcontracting to small businesses by the prime contractor, Smiths Detection, Inc., are not mandated by the contract terms, potentially limiting their involvement and the broader impact on the small business ecosystem in this specialized sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices, with potential review by the Transportation Security Administration's contracting officers. Inspector General oversight is standard for DHS contracts, ensuring accountability and investigating potential fraud, waste, or abuse. Transparency is generally maintained through contract databases, though specific performance details may be less public.

Related Government Programs

Homeland Security Contracts
Transportation Security Administration Procurements
Security Equipment Maintenance
Sole Source Contracts
Federal IT and Equipment Services

Risk Flags

Sole-source award may lead to higher costs.
Lack of competition limits price discovery.
High daily rate warrants value-for-money scrutiny.
Short duration may indicate temporary solution or future needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $38.3 million to SMITHS DETECTION, INC. PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT

Who is the contractor on this award?

The obligated recipient is SMITHS DETECTION, 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 $38.3 million.

What is the period of performance?

Start: 2006-03-10. End: 2006-09-30.

What is the track record of Smiths Detection, Inc. with federal contracts, particularly for maintenance services?

Smiths Detection, Inc. has a significant history of federal contracting, primarily with agencies like the Department of Homeland Security (DHS) and the Department of Defense. Their awards often relate to security screening equipment, including EDS, baggage scanners, and related maintenance and support services. Analysis of their past performance indicates a consistent role as a key supplier and service provider in this niche. While specific details on performance metrics for individual contracts are often proprietary or not publicly detailed, their sustained presence suggests a generally accepted level of capability and reliability in meeting federal requirements for specialized security technology.

How does the awarded amount compare to similar maintenance contracts for EDS equipment?

Comparing the $38.3 million award for 204 days ($187,632 per day) to similar contracts is difficult without access to detailed contract databases and specific equipment models. However, this daily rate appears high for standard maintenance. It's possible this figure includes significant costs for replacement parts, specialized labor, emergency response, or covers a large number of diverse EDS units across multiple locations. Without further context on the scope of services, equipment type, and geographic coverage, a definitive value-for-money assessment against benchmarks is not feasible. It suggests a need for detailed justification from the agency regarding the pricing structure.

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

The primary risk of a sole-source award for critical security equipment maintenance is the potential for inflated costs due to the lack of competitive pressure. The government may not achieve the best possible pricing or terms. Another risk is vendor lock-in, where the agency becomes overly reliant on a single provider, potentially hindering innovation or the adoption of alternative technologies. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, it could lead to significant disruptions in essential security functions, posing a risk to national security operations.

What is the expected effectiveness of this contract in ensuring the operational readiness of EDS equipment?

The effectiveness of this contract hinges on the thoroughness of the 'preventive and corrective maintenance' outlined in the statement of work and the contractor's ability to execute it. If the plan adequately covers routine checks, calibration, and timely repairs, it should contribute significantly to the operational readiness of the EDS equipment. The contract's short duration (204 days) suggests it might be intended to cover a specific period or bridge a gap until a more comprehensive, longer-term solution is in place. Success will depend on clear performance standards, diligent oversight by the TSA, and the contractor's technical proficiency.

How has federal spending on security systems services (NAICS 561621) trended over the past five years?

Federal spending on Security Systems Services (NAICS 561621) has generally shown an upward trend over the past five years, driven by ongoing security needs across various government agencies, particularly DHS and DoD. While specific year-over-year figures fluctuate based on major procurements and evolving threats, the overall demand for security systems installation, maintenance, and monitoring remains robust. This reflects a sustained commitment to enhancing security infrastructure and operational capabilities. The total federal spending in this category can reach billions annually, with significant portions allocated to specialized maintenance and integration services for advanced security technologies like EDS.

What are the implications of the 'AW: DO' designation for this contract?

The 'AW: DO' designation likely stands for 'Awarded: Done' or a similar status indicating the contract has been officially awarded and is active or completed. This is a standard administrative code used in federal procurement databases to track the lifecycle of a contract. It confirms that the procurement process for this specific maintenance service has concluded with an award to Smiths Detection, Inc. It does not inherently imply any specific risk or benefit beyond confirming the contract's status.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Parent Company: Safran Power USA LLC (UEI: 275374015)

Address: 7151 GATEWAY BLVD, NEWARK, CA, 17

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $348,211,924

Exercised Options: $82,973,743

Current Obligation: $38,276,895

Parent Contract

Parent Award PIID: HSTS0405DDEP008

IDV Type: IDC

Timeline