DHS awarded $182M for CTX unit maintenance, a sole-source contract with limited competition

Contract Overview

Contract Amount: $182,068,423 ($182.1M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2009-03-11

End Date: 2011-06-30

Contract Duration: 841 days

Daily Burn Rate: $216.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GE HOMELAND PROTECTION, INC. HSTS04-05-D-DEP008 MODIFICATION: HSTS0408JCT3026 PREVENTATIVE AND CORRECTVIE MAINTENANCE FOR GE CTX DEPLOYED UNITS. SPECIFICALLY, CTX 2500, CTX 5500, CTX 9000, AND CTX 9400

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $182.1 million to SMITHS DETECTION, INC for work described as: GE HOMELAND PROTECTION, INC. HSTS04-05-D-DEP008 MODIFICATION: HSTS0408JCT3026 PREVENTATIVE AND CORRECTVIE MAINTENANCE FOR GE CTX DEPLOYED UNITS. SPECIFICALLY, CTX 2500, CTX 5500, CTX 9000, AND CTX 9400 Key points: 1. Contract value of $182M over its period of performance suggests significant investment in maintaining critical security infrastructure. 2. The sole-source nature of this award raises questions about potential price inflation and the absence of market-driven cost efficiencies. 3. Limited competition indicators suggest a potential risk of vendor lock-in and reduced incentive for cost optimization. 4. The contract's duration of 841 days points to a long-term need for specialized maintenance services. 5. The focus on specific GE CTX models indicates a specialized requirement within the Transportation Security Administration's (TSA) operational needs. 6. The absence of small business set-asides suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source maintenance agreements for similar specialized equipment. The significant dollar amount, coupled with the lack of competition, warrants scrutiny to ensure fair pricing. Without competitive bids, it's difficult to ascertain if the government received optimal value for the preventative and corrective maintenance services provided for the GE CTX units.

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 can provide the required goods or services, often due to proprietary technology or unique expertise. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The sole-source award means there was no opportunity to compare offers and secure the most cost-effective solution, potentially leading to higher overall expenditure.

Public Impact

The primary beneficiaries are the Transportation Security Administration (TSA) and the Department of Homeland Security (DHS), ensuring the continued operational readiness of critical security screening equipment. The contract delivers essential preventative and corrective maintenance services for GE CTX 2500, 5500, 9000, and 9400 units, vital for airport security. The geographic impact is likely nationwide, covering airports and other facilities where these CTX units are deployed by the TSA. The contract supports specialized technical roles for maintenance and repair personnel, contributing to the cybersecurity and physical security workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may indicate a lack of market availability or a strategic decision to rely on a single provider, which can be a risk.
Contract duration without clear performance metrics or re-competition points could lead to complacency from the vendor.

Positive Signals

Ensures continued operation of critical security screening equipment, a vital public safety function.
Addresses a specific, likely specialized, maintenance need for GE CTX units.
The contract provides a clear period of performance for essential services.

Sector Analysis

The security systems services sector, particularly for specialized screening equipment, is a niche but critical area within the broader government contracting landscape. Companies in this sector often possess unique technological expertise and proprietary knowledge. The market size for such specialized maintenance can be substantial, driven by the ongoing need to maintain high levels of security infrastructure across various federal agencies. This contract fits within the broader category of security and defense-related services, where long-term support agreements are common.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). The prime contractor, GE HOMELAND PROTECTION, INC. (or its successor/related entity), is likely a large business. This means that opportunities for small businesses would primarily be through subcontracting, if any were offered by the prime. Without specific subcontracting plans detailed, the direct impact on the small business ecosystem from this particular award is likely minimal.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security's contracting and program management offices. The Transportation Security Administration, as the primary user agency, would also play a role in monitoring performance. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

DHS Security Equipment Maintenance
TSA Screening Technology Support
Federal Aviation Administration (FAA) Security Infrastructure
Customs and Border Protection (CBP) Equipment Services
General Services Administration (GSA) Schedule Contracts for Security Equipment

Risk Flags

Sole-source award
Lack of competition
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $182.1 million to SMITHS DETECTION, INC. GE HOMELAND PROTECTION, INC. HSTS04-05-D-DEP008 MODIFICATION: HSTS0408JCT3026 PREVENTATIVE AND CORRECTVIE MAINTENANCE FOR GE CTX DEPLOYED UNITS. SPECIFICALLY, CTX 2500, CTX 5500, CTX 9000, AND CTX 9400

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 $182.1 million.

What is the period of performance?

Start: 2009-03-11. End: 2011-06-30.

What is the track record of GE HOMELAND PROTECTION, INC. (or its predecessor/successor) in fulfilling similar sole-source maintenance contracts for critical security equipment?

Assessing the track record of GE HOMELAND PROTECTION, INC. in fulfilling similar sole-source maintenance contracts requires a deeper dive into historical contract data and performance reviews. Without specific past performance reports or award details for comparable sole-source agreements, it's difficult to definitively gauge their reliability and efficiency in such scenarios. However, the fact that they were awarded this significant sole-source contract suggests a level of established capability and potentially a unique position in servicing GE CTX deployed units. Further investigation into any prior contract modifications, disputes, or positive performance feedback would be necessary for a comprehensive assessment of their track record in this specific context.

How does the awarded amount of $182 million compare to the estimated market value for similar preventative and corrective maintenance services for GE CTX units?

Determining the precise market value for this contract is challenging due to its sole-source nature and the specialized equipment involved. Without competitive bids, there's no direct market comparison. However, a rough estimate could be derived by analyzing the number of CTX units deployed, their complexity, and typical maintenance schedules. Industry benchmarks for maintaining sophisticated security screening equipment can range significantly based on service level agreements, parts availability, and technician expertise. Given the $182 million figure over approximately two years, this implies a substantial annual expenditure. A thorough market analysis would involve surveying other government agencies or private entities using similar equipment to understand their maintenance costs and contract terms, which could reveal if this award represents a fair market price or an inflated one due to the lack of competition.

What are the primary risks associated with awarding a sole-source contract of this magnitude for critical security equipment maintenance?

The primary risks associated with awarding a sole-source contract of this magnitude for critical security equipment maintenance include potential price gouging, lack of innovation, and vendor lock-in. Without competition, the contractor has less incentive to offer competitive pricing, potentially leading to higher costs for the government and taxpayers. The absence of multiple bidders can also stifle innovation, as the contractor may not feel pressured to improve services or adopt new technologies. Furthermore, a sole-source award can create vendor lock-in, making it difficult and costly to switch providers in the future, even if performance declines or better alternatives emerge. There's also a risk that the contractor might prioritize less critical tasks or delay essential repairs if they perceive the government has limited recourse.

What is the historical spending pattern for preventative and corrective maintenance of GE CTX units by the TSA or DHS?

Analyzing the historical spending patterns for preventative and corrective maintenance of GE CTX units by the TSA or DHS is crucial for understanding the context of this $182 million award. This contract, awarded in 2009 with an end date in 2011, represents a specific period of expenditure. To understand the broader pattern, one would need to examine spending on similar maintenance contracts for GE CTX units (and potentially other CTX models) in the years preceding and following this award. This would involve looking at previous contract vehicles, their values, durations, and whether they were also sole-source or competed. A trend analysis could reveal if spending has been consistently high, increasing, or decreasing, and whether this particular contract represents an anomaly or a continuation of established spending levels for this type of critical equipment maintenance.

Are there any performance metrics or service level agreements (SLAs) associated with this contract that can be used to evaluate the effectiveness of the maintenance services?

Evaluating the effectiveness of the maintenance services provided under this contract hinges on the presence and stringency of performance metrics and service level agreements (SLAs). While the provided data does not detail these specific clauses, typical government contracts for maintenance services include SLAs related to response times for corrective maintenance, equipment uptime guarantees, preventative maintenance schedules, and quality of repairs. The effectiveness of the $182 million award can be assessed by examining whether these metrics were met, any penalties incurred for non-performance, or bonuses awarded for exceptional service. Without access to the contract's full terms and conditions, including any performance reports or reviews, it is difficult to definitively assess the effectiveness of the maintenance provided.

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: $182,068,423

Exercised Options: $182,068,423

Current Obligation: $182,068,423

Parent Contract

Parent Award PIID: HSTS0405DDEP008

IDV Type: IDC

Timeline