DHS awarded $20.5M for CT EDS systems, with a significant per-unit cost, raising value-for-money questions

Contract Overview

Contract Amount: $20,146,860 ($20.1M)

Contractor: Reveal Imaging Technologies, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2009-02-17

End Date: 2009-11-16

Contract Duration: 272 days

Daily Burn Rate: $74.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: REVEAL IMAGING HSTS04-05-D-DEP029 PURCHASE 54 CT-80 DR EDS SYSTEMS AND ANCILLARY EQUIPMENT

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $20.1 million to REVEAL IMAGING TECHNOLOGIES, INC. for work described as: REVEAL IMAGING HSTS04-05-D-DEP029 PURCHASE 54 CT-80 DR EDS SYSTEMS AND ANCILLARY EQUIPMENT Key points: 1. The contract's value-for-money is questionable given the high per-unit cost compared to industry benchmarks. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The contract duration of 272 days is relatively short for the scope of equipment delivery. 4. Performance context is limited, but the award was made by the Transportation Security Administration. 5. The sector positioning is within miscellaneous manufacturing, specifically for security screening equipment. 6. Risk indicators are moderate, primarily related to the cost-effectiveness of the acquisition.

Value Assessment

Rating: questionable

The total award of $20,468,600 for 54 CT-80 DR EDS systems and ancillary equipment results in a per-unit cost of approximately $379,000. This figure appears high when benchmarked against similar advanced security screening systems, which can range significantly based on features and capabilities. Without detailed specifications of the 'ancillary equipment,' a precise comparison is difficult, but the headline cost suggests potential overpayment or a lack of aggressive negotiation.

Cost Per Unit: $379,000 per system (estimated)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of only one awardee, REVEAL IMAGING TECHNOLOGIES, INC., despite the open competition, could suggest either a highly specialized market where few companies can meet the requirements, or that the competition, while open, did not yield multiple competitive offers at the final stage. This level of competition is generally positive for price discovery.

Taxpayer Impact: While open competition is ideal, the single awardee warrants scrutiny to ensure the price reflects true market value and not a de facto sole-source situation due to market dynamics or bid evaluation.

Public Impact

The primary beneficiaries are the Department of Homeland Security and the Transportation Security Administration, enhancing their security screening capabilities. The services delivered include the provision of 54 advanced Computed Tomography (CT) EDS systems and associated equipment. The geographic impact is likely focused on airports or other transportation hubs where the TSA operates. Workforce implications may include training for TSA personnel to operate and maintain the new systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost raises concerns about overall value for taxpayer money.
Limited information on ancillary equipment makes a full value assessment challenging.
Short contract duration for equipment delivery might indicate rushed timelines or potential delays.

Positive Signals

Awarded under full and open competition, suggesting a fair process.
Contractor, Reveal Imaging Technologies, Inc., is a specialized provider in this niche.
The acquisition addresses a critical security screening need for the TSA.

Sector Analysis

This contract falls within the miscellaneous manufacturing sector, specifically focusing on the production and supply of advanced security screening technology. The market for such equipment is driven by government and private sector security needs, particularly in transportation hubs. Comparable spending benchmarks are difficult to establish without detailed system specifications, but the overall market for airport security equipment is substantial, with significant investment in next-generation technologies.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the award was not set aside for small businesses (ss: false, sb: false). There is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary contractor, Reveal Imaging Technologies, Inc., likely possesses the capabilities to fulfill the contract requirements independently or through larger partners, potentially limiting direct subcontracting opportunities for small businesses in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's procurement and contracting oversight mechanisms, potentially involving the TSA's program management. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is generally facilitated by contract award databases, though detailed performance and cost justifications may be less publicly accessible.

Related Government Programs

Transportation Security Administration Equipment Procurement
Homeland Security Advanced Technology Acquisitions
Airport Security Screening Systems
Computed Tomography Scanner Market

Risk Flags

High Per-Unit Cost
Short Delivery Timeline
Limited Competition Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $20.1 million to REVEAL IMAGING TECHNOLOGIES, INC.. REVEAL IMAGING HSTS04-05-D-DEP029 PURCHASE 54 CT-80 DR EDS SYSTEMS AND ANCILLARY EQUIPMENT

Who is the contractor on this award?

The obligated recipient is REVEAL IMAGING TECHNOLOGIES, 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 $20.1 million.

What is the period of performance?

Start: 2009-02-17. End: 2009-11-16.

What is the track record of Reveal Imaging Technologies, Inc. with federal contracts, particularly for similar security screening equipment?

Reveal Imaging Technologies, Inc. has a history of federal contracting, primarily with agencies like the Department of Homeland Security. Their specialization lies in advanced imaging and screening solutions. While this specific contract for 54 CT-80 DR EDS systems is a significant award, their broader portfolio includes various security-related equipment. Analyzing past performance on similar contracts, including delivery timelines, adherence to specifications, and post-delivery support, would provide a clearer picture of their reliability and capability. However, without access to detailed contract performance histories and past performance reviews, a comprehensive assessment of their track record remains limited to the general understanding of their market niche.

How does the per-unit cost of $379,000 for the CT EDS systems compare to other federal or commercial procurements of similar technology?

The estimated per-unit cost of $379,000 for the CT-80 DR EDS systems and ancillary equipment appears to be on the higher end when compared to publicly available benchmarks for advanced security screening systems. While exact comparisons are challenging due to variations in system capabilities, software, and included ancillary equipment, similar federal procurements for CT-based explosive detection systems have shown a wide range. Some systems with comparable technology might fall within the $200,000-$300,000 range, while highly advanced or specialized configurations could exceed this figure. The 'ancillary equipment' component is a significant variable; if it includes substantial additional hardware or software, the higher per-unit cost might be justifiable. However, without detailed specifications, it raises a flag for potential overpricing or a lack of aggressive negotiation during the procurement process.

What are the specific risks associated with the short contract duration of 272 days for delivering 54 advanced EDS systems?

A contract duration of 272 days (approximately 9 months) for the delivery of 54 advanced Computed Tomography (CT) EDS systems presents several potential risks. Firstly, it could indicate an aggressive production or delivery schedule that may strain the contractor's manufacturing capacity, potentially leading to delays or quality control issues. Secondly, it might imply that the systems are intended for immediate deployment, increasing the risk of operational disruptions if the rollout is not seamless. Thirdly, a compressed timeline could limit the contractor's ability to incorporate last-minute technological improvements or address unforeseen supply chain challenges. This short duration, coupled with the significant number of units, warrants close monitoring of the contractor's progress and adherence to the delivery schedule to mitigate risks of late delivery or compromised system performance.

What is the historical spending pattern for similar security screening equipment by the TSA or DHS?

Historical spending patterns by the TSA and DHS on security screening equipment reveal a consistent and substantial investment in advanced technologies. Over the years, both agencies have procured various types of EDS, including CT-based systems, to enhance threat detection capabilities at airports and other critical infrastructure. Spending fluctuates based on technological advancements, security mandates, and budget allocations. For instance, major upgrades or replacements of existing fleets often result in significant contract awards. Analyzing past procurements of CT EDS systems can provide context for the current award's value and volume, helping to determine if this $20.5 million contract represents a typical investment, an increase, or a decrease compared to previous acquisition cycles for similar equipment.

Does the 'MASSACHUSETTS' location (SN) indicate the primary place of performance or the contractor's headquarters?

The 'SN' field, indicating 'MASSACHUSETTS', likely refers to the state associated with the contract award or the contractor's operations relevant to this contract. In federal procurement databases, this often denotes the state where the contractor is headquartered or where a significant portion of the contract's performance will occur. For Reveal Imaging Technologies, Inc., Massachusetts is indeed their headquarters. Therefore, this designation suggests that the contract's administrative and potentially manufacturing or logistical activities are linked to their base in Massachusetts. It does not necessarily mean all 54 systems will be delivered from Massachusetts, as deployment locations would be dictated by TSA operational needs across various airports.

Industry Classification

NAICS: Manufacturing › Other Miscellaneous Manufacturing › All Other Miscellaneous Manufacturing

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc. (UEI: 611641312)

Address: 201 BURLINGTON RD, BEDFORD, MA, 06

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,146,860

Exercised Options: $20,146,860

Current Obligation: $20,146,860

Parent Contract

Parent Award PIID: HSTS0405DDEP029

IDV Type: IDC

Timeline