DHS's $72M security systems contract with Smiths Detection, Inc. awarded without competition

Contract Overview

Contract Amount: $72,268,148 ($72.3M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2007-03-16

End Date: 2012-03-09

Contract Duration: 1,820 days

Daily Burn Rate: $39.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GE- MAINTENANCE

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $72.3 million to SMITHS DETECTION, INC for work described as: GE- MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (5 years) suggests a long-term need for these security systems. 3. The North American Industry Classification System (NAICS) code 561621 indicates a focus on security systems services. 4. The contract was awarded to a single vendor, raising questions about market competitiveness. 5. The firm-fixed-price contract type shifts some risk to the contractor, but the lack of competition is a primary concern. 6. The contract's value of over $72 million warrants scrutiny regarding its necessity and cost-effectiveness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of publicly available comparable sole-source awards for similar security systems services. The firm-fixed-price structure is standard, but without competitive bidding, it's difficult to ascertain if the $72.2 million represents a fair market price. The absence of competition suggests potential overpayment or a lack of market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically reserved for situations where only one vendor can provide the required goods or services, often due to proprietary technology or unique capabilities. The lack of competition means there were no other bidders, and therefore no direct price comparison or negotiation based on multiple offers.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure to drive down costs. The government did not benefit from the potential cost savings that typically arise from a competitive bidding process.

Public Impact

The Transportation Security Administration (TSA) and potentially other Department of Homeland Security (DHS) components benefit from the provision of security systems services. These services are critical for maintaining national security and facilitating safe travel and commerce. The contract's geographic impact is primarily within California, where the contractor is located, but the services likely support federal operations nationwide. The contract supports specialized roles within the security systems industry, potentially impacting a niche workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer dollars.
Sole-source awards can stifle innovation by not encouraging new vendors to enter the market.
The long contract duration without re-competition could lead to complacency and reduced service quality over time.
Limited transparency in the procurement process due to the sole-source nature of the award.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
The contractor, Smiths Detection, Inc., is a known entity in the security systems market, suggesting some level of established capability.
The contract addresses a critical need for security systems services within DHS.

Sector Analysis

The security systems services sector is a vital component of the broader security and defense industry. This contract falls under NAICS code 561621, which covers services like alarm systems installation and monitoring, security system design, and security guard services (excluding locksmiths). The market includes a range of companies from large defense contractors to specialized security firms. Benchmarking this specific contract's value is difficult without more detailed service descriptions and market data, but the overall federal spending on security systems and related services is substantial.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor is Smiths Detection, Inc., which is likely a large business. There is no explicit information on subcontracting plans for small businesses within this award. Without a competitive process, it's less likely that opportunities for small business subcontracting were actively sought or mandated.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices. Given it's a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security - General Services
Transportation Security Administration - Equipment Procurement
Federal Security Systems Contracts
Sole-Source Security Services Awards

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $72.3 million to SMITHS DETECTION, INC. GE- MAINTENANCE

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 $72.3 million.

What is the period of performance?

Start: 2007-03-16. End: 2012-03-09.

What specific security systems and services were provided under this contract?

The provided data indicates the contract is for 'Security Systems Services (except Locksmiths)' under NAICS code 561621. However, the specific types of security systems (e.g., surveillance, access control, screening equipment) and the detailed services (e.g., installation, maintenance, monitoring, training) are not specified in the abbreviated data. This level of detail is crucial for a comprehensive value assessment and for comparing this contract to others in the market. Without this information, it's difficult to determine the exact nature of the expenditure and its alignment with specific security needs.

What was the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED' and has a contract type of 'SOLE SOURCE'. Typically, sole-source awards require a justification, such as the unique capability of a single contractor, proprietary technology, or an urgent need that cannot be met through competition. The specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition) would contain the detailed rationale. Without access to this document, we can only infer that the government determined competition was not feasible or not in the government's best interest at the time of award.

How does the $72.2 million contract value compare to similar security systems contracts awarded by DHS or other agencies?

Direct comparison is difficult without knowing the specific services and systems procured. However, a $72.2 million contract over five years (approximately $14.4 million annually) for security systems services is a significant investment. If the services involved complex technology integration, large-scale deployment, or extensive maintenance, the cost might be within a reasonable range for a sole-source award to a specialized provider. Conversely, if the services are more standard, this value could be high, especially given the lack of competition. A thorough benchmark would require analyzing contracts with similar NAICS codes, contract durations, and service scopes, ideally those awarded competitively.

What is the track record of Smiths Detection, Inc. in fulfilling federal contracts, particularly for DHS?

Smiths Detection, Inc. is a known entity in the defense and security sector, often providing advanced threat detection equipment and services. Their track record with federal agencies, including DHS, likely includes numerous contracts for various security solutions. A deeper analysis would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and their success in delivering similar systems. Given their specialization, it's probable they have a history of fulfilling complex security requirements, but the quality and cost-effectiveness of that fulfillment would need specific examination.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude ($72.2M) and duration (5 years) include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market transparency. There's also a risk that the government becomes locked into a specific technology or vendor, making future transitions difficult or costly. Furthermore, without regular competition, oversight becomes even more critical to ensure the contractor continues to meet performance standards and deliver value. The government might also miss out on potentially better solutions or pricing from other vendors who were not given an opportunity to bid.

Were there any performance issues or contract modifications during the life of this contract?

The provided data does not include information on contract modifications, performance issues, or any disputes that may have arisen during the contract's period of performance (March 16, 2007, to March 9, 2012). To assess performance, one would need to consult contract modification logs, performance reports, and potentially CPARS data. Significant modifications or documented performance problems could indicate underlying issues with the initial award, the contractor's execution, or the evolving needs of the agency that were not adequately addressed in the original contract.

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: FIRM FIXED PRICE (J)

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: $72,268,148

Exercised Options: $72,268,148

Current Obligation: $72,268,148

Parent Contract

Parent Award PIID: HSTS0405DDEP008

IDV Type: IDC

Timeline