DHS awards $78M contract for irradiation apparatus manufacturing, with pricing to be determined

Contract Overview

Contract Amount: $78,045,066 ($78.0M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2009-07-09

End Date: 2014-06-10

Contract Duration: 1,797 days

Daily Burn Rate: $43.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Other

Official Description: THIS IS A HYBRID LETTER CONTRACT. THE PRICING WILL BE FIXED PRICE OR TIME AND MATERIALS- WHICH WILL BE DETERMINED UPON DEFINITIZATION.

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33702

State: Florida Government Spending

Plain-Language Summary

Department of Homeland Security obligated $78.0 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: THIS IS A HYBRID LETTER CONTRACT. THE PRICING WILL BE FIXED PRICE OR TIME AND MATERIALS- WHICH WILL BE DETERMINED UPON DEFINITIZATION. Key points: 1. Contract awarded without competition, raising questions about potential cost efficiencies. 2. Pricing structure is a hybrid, with final terms to be determined upon contract definitization. 3. The contract duration of nearly five years suggests a significant, long-term need. 4. The awardee, Leidos Security Detection & Automation, Inc., has a substantial contract value. 5. The specific nature of 'irradiation apparatus manufacturing' requires specialized capabilities. 6. The lack of a defined pricing model at award introduces uncertainty for budget forecasting.

Value Assessment

Rating: questionable

The contract's value of $78 million over nearly five years is substantial. However, the hybrid pricing structure (fixed price or time and materials, to be determined) makes a direct value-for-money assessment difficult at this stage. Without knowing the final pricing mechanism and rates, it's impossible to benchmark against similar contracts or market rates effectively. The lack of competition further complicates a fair assessment of whether the government is receiving optimal pricing.

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. This limits the opportunity for multiple vendors to bid, which typically drives down prices and encourages innovation. The rationale for a sole-source award is not provided in the data, but it suggests either a unique capability held by the contractor or a specific justification for bypassing the competitive process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, likely for security screening equipment. The contract supports the manufacturing of specialized irradiation apparatus, crucial for certain security or industrial processes. The contract is geographically focused on Florida, where the contractor is located. This contract likely supports a specialized manufacturing workforce within the awarded company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Uncertainty in pricing structure (hybrid) makes value assessment difficult.
Sole-source award limits transparency and potential for better pricing.
Long contract duration without defined pricing could pose budget risks.

Positive Signals

Award to an established company (Leidos) suggests potential for reliable delivery.
The significant contract value indicates a critical need for the apparatus.
The contract duration implies a stable, long-term requirement for the technology.

Sector Analysis

The contract falls within the 'Manufacturing' sector, specifically related to specialized equipment. The 'Irradiation Apparatus Manufacturing' niche suggests a highly specialized area within industrial manufacturing. Comparable spending benchmarks are difficult to establish without more specific details on the type and application of the irradiation apparatus. However, the award value of $78 million indicates a significant investment in this specialized capability by the government.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, Leidos, is a large business, and any subcontracting opportunities would be at their discretion.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, as a Department of Homeland Security contract, it would likely fall under the purview of the DHS Office of Inspector General (OIG) for audits and investigations. Transparency would depend on the public availability of contract definitization details and performance reports.

Related Government Programs

Department of Homeland Security Procurement
Transportation Security Administration Equipment Acquisition
Manufacturing Contracts
Sole Source Procurements
Apparatus Manufacturing

Risk Flags

Lack of Competition
Undefined Pricing Structure at Award
Potential for Cost Overruns (if T&M)
Long-Term Commitment without Fixed Price Certainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $78.0 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. THIS IS A HYBRID LETTER CONTRACT. THE PRICING WILL BE FIXED PRICE OR TIME AND MATERIALS- WHICH WILL BE DETERMINED UPON DEFINITIZATION.

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 $78.0 million.

What is the period of performance?

Start: 2009-07-09. End: 2014-06-10.

What is the specific application and purpose of the 'irradiation apparatus' being manufactured under this contract?

The provided data does not specify the exact application or purpose of the 'irradiation apparatus.' However, given the awarding agency is the Department of Homeland Security (DHS) and the specific agency is the Transportation Security Administration (TSA), it is highly probable that these apparatus are related to security screening technologies. Irradiation technologies can be used in various security contexts, such as cargo scanning, baggage inspection, or sterilization processes, to detect threats or contraband. Further details would be required from DHS or TSA to confirm the precise use case.

What is the rationale behind awarding this contract on a sole-source basis?

The provided data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source or non-competitive award. The specific rationale for this determination is not included in the data snippet. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, or when there is a compelling urgency, or for reasons of industrial mobilization or national security. Without further documentation from the Department of Homeland Security (DHS), the precise justification remains unknown. This lack of competition raises concerns about potential cost efficiencies and the government's ability to secure the best value.

What are the potential risks associated with the hybrid pricing structure (fixed price or time and materials, to be determined)?

The hybrid pricing structure presents several risks. Firstly, the uncertainty surrounding whether the final contract will be fixed-price or time-and-materials (T&M) makes it difficult to accurately forecast costs and assess value for money at the time of award. If it defaults to T&M, there is a risk of cost overruns if contractor hours are not closely monitored and controlled. Conversely, a poorly defined fixed-price could lead to inadequate scope or quality. The 'to be determined' aspect means the government may not have secured the most advantageous pricing terms upfront, potentially leading to higher overall expenditures than if the pricing model was finalized during a competitive process.

How does the contract duration of nearly five years (1797 days) impact the overall value and risk assessment?

A contract duration of nearly five years (1797 days) indicates a significant, long-term requirement for the irradiation apparatus. This extended period allows for potential economies of scale in manufacturing and provides stability for the contractor. However, it also increases the risk associated with price fluctuations in materials and labor over time, especially if the final pricing is T&M. For the government, a long duration without a firmly established fixed price can tie up significant budget resources and make it harder to adapt to technological advancements or changing needs. The risk is mitigated if the definitization process results in a fair fixed price that accounts for the duration.

What is the historical spending pattern for 'Irradiation Apparatus Manufacturing' by the TSA or DHS?

The provided data snippet does not contain historical spending patterns for 'Irradiation Apparatus Manufacturing' by the TSA or DHS. It only details a single award of $78,045,065.66 made on July 9, 2009, with an end date of June 10, 2014. To assess historical spending patterns, one would need access to broader contract databases or agency procurement reports that track spending over multiple fiscal years and across various contracts within this specific product or service category.

What is the track record of Leidos Security Detection & Automation, Inc. with similar government contracts?

While the data identifies Leidos Security Detection & Automation, Inc. as the awardee, it does not provide specific details about their track record with similar government contracts. Leidos is a large, well-established company known for providing technology and services to government agencies, including defense and intelligence. Their general reputation suggests experience in complex projects. However, a thorough assessment of their track record for 'irradiation apparatus manufacturing' or similar specialized equipment would require examining past performance evaluations, contract completion history, and any documented issues on previous DHS or TSA contracts.

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

Offers Received: 1

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

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 10E COMMERCE WAY, WOBURN, MA, 05

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, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $86,828,344

Exercised Options: $86,828,344

Current Obligation: $78,045,066

Contract Characteristics

Cost or Pricing Data: YES

Timeline