DHS's $25.4M X-ray System Purchase: 257 Units for TSA, Awarded via Full and Open Competition

Contract Overview

Contract Amount: $25,353,017 ($25.4M)

Contractor: Rapiscan Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2010-09-15

End Date: 2013-04-30

Contract Duration: 958 days

Daily Burn Rate: $26.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PURCHASE 257 ADVANCED TECHNOLOGY 2 (AT-2) X-RAY SYSTEMS AND INSTALLATION AND ASSOCIATED ANCILLARY EQUIPMENT.

Place of Performance

Location: TORRANCE, LOS ANGELES County, CALIFORNIA, 90503

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.4 million to RAPISCAN SYSTEMS INC for work described as: PURCHASE 257 ADVANCED TECHNOLOGY 2 (AT-2) X-RAY SYSTEMS AND INSTALLATION AND ASSOCIATED ANCILLARY EQUIPMENT. Key points: 1. Value for money appears fair, with a per-unit cost of approximately $98,650 for advanced X-ray systems. 2. The contract was awarded through full and open competition, suggesting a competitive pricing environment. 3. Potential risks include the long delivery timeline (nearly 3 years) and the specific nature of advanced technology. 4. Performance context is limited without specific deployment or operational success metrics. 5. This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. 6. The sole awardee, Rapiscan Systems Inc., highlights the specialized nature of this procurement.

Value Assessment

Rating: fair

The total contract value of $25.4 million for 257 advanced X-ray systems and installation averages to approximately $98,650 per unit. This price point needs to be benchmarked against similar advanced security screening equipment procured by government agencies or in the commercial market. Without direct comparisons, it's difficult to definitively assess if this represents excellent value, but it falls within a plausible range for sophisticated technology.

Cost Per Unit: $98,650 per unit (estimated)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This typically fosters a competitive environment, driving down prices and encouraging innovation. The fact that there was a single award suggests that Rapiscan Systems Inc. was the most advantageous offer based on the evaluation criteria, but the level of initial bidder interest is not specified.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives the best possible pricing and quality through a robust bidding process, minimizing the risk of overpayment.

Public Impact

Passengers and cargo screened at airports served by the Transportation Security Administration (TSA) will benefit from enhanced security. The contract delivers 257 advanced technology X-ray systems, improving threat detection capabilities. The primary geographic impact is within the United States at TSA-operated screening checkpoints. Installation and associated ancillary equipment will be provided, ensuring operational readiness of the systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long delivery and installation period (958 days) could indicate potential delays or complex integration challenges.
Reliance on a single vendor for a significant quantity of advanced technology may pose supply chain risks.
The 'advanced technology' aspect implies a need for specialized maintenance and training, potentially increasing long-term costs.
The specific NAICS code (334511) suggests a niche market, potentially limiting future competition if technology evolves rapidly.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
The purchase of a substantial number of systems (257) indicates a significant investment in enhancing national security screening.
The firm fixed-price contract type provides cost certainty for the government, mitigating the risk of cost overruns.
The contract is for advanced technology, implying an upgrade to existing security infrastructure and improved detection capabilities.

Sector Analysis

This contract falls under the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems and instruments (NAICS 334511). This sector is characterized by high technological development and significant government procurement, particularly for defense and homeland security applications. The market for advanced X-ray and screening technology is specialized, with a few key players often dominating specific niches. Benchmarking spending would require comparing this unit cost to similar advanced imaging systems used in security contexts.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Rapiscan Systems Inc. engages them. Without further information on subcontracting plans, it's difficult to assess the broader impact on the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and specifically the Transportation Security Administration (TSA). As a delivery order under a larger contract vehicle, oversight mechanisms would likely involve contract specialists, program managers, and potentially the DHS Office of Inspector General (OIG) if performance issues or financial irregularities arise. Transparency is generally maintained through contract award databases, but detailed performance metrics and ongoing oversight activities are not publicly detailed.

Related Government Programs

TSA Security Equipment Procurement
DHS Advanced Technology Acquisitions
Homeland Security Screening Systems
Federal X-ray Machine Purchases

Risk Flags

Potential for delivery delays due to complexity or vendor capacity.
Risk of technology obsolescence during the long procurement and deployment cycle.
Uncertainty regarding long-term maintenance and sustainment costs for advanced systems.
Limited public information on specific performance metrics and operational success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.4 million to RAPISCAN SYSTEMS INC. PURCHASE 257 ADVANCED TECHNOLOGY 2 (AT-2) X-RAY SYSTEMS AND INSTALLATION AND ASSOCIATED ANCILLARY EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is RAPISCAN SYSTEMS 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 $25.4 million.

What is the period of performance?

Start: 2010-09-15. End: 2013-04-30.

What is the track record of Rapiscan Systems Inc. in fulfilling similar government contracts, particularly for advanced X-ray systems?

Rapiscan Systems Inc. has a history of providing security screening solutions, including X-ray systems, to various government agencies globally. Analyzing their past performance on similar contracts awarded by DHS, TSA, or other federal entities would be crucial. Key indicators to examine include on-time delivery rates, adherence to technical specifications, and any documented instances of contract disputes or performance failures. A review of contract databases and performance assessment reports (if available) would provide insight into their reliability and capability in delivering complex technological solutions within specified timelines and budgets.

How does the per-unit cost of $98,650 compare to similar advanced X-ray systems procured by other federal agencies or in the commercial market?

Benchmarking the per-unit cost of $98,650 requires comparing it against comparable advanced technology X-ray systems. This includes systems with similar detection capabilities, throughput, and technological sophistication. For instance, similar systems procured by the Department of Defense for checkpoint screening or by international allies for airport security could serve as benchmarks. Commercial market prices for high-end industrial or security X-ray equipment can also provide context, although government procurement often involves different pricing structures and volume discounts. A detailed analysis would involve identifying specific comparable systems and their acquisition costs over the past few years.

What are the primary risks associated with the long delivery and installation period of nearly three years for these advanced X-ray systems?

The extended delivery and installation timeline of 958 days (approximately 32 months) presents several risks. Firstly, it could indicate potential production bottlenecks or complex integration requirements for the 'advanced technology' systems, which might lead to further delays. Secondly, during this long period, the threat landscape or technological requirements could evolve, potentially making the procured systems less cutting-edge by the time they are fully operational. Thirdly, extended timelines increase the risk of cost escalation if not adequately managed under a firm fixed-price contract, and they delay the realization of security benefits. Finally, it raises questions about the initial planning and procurement process efficiency.

What specific performance metrics or operational success indicators are being used to evaluate the effectiveness of these AT-2 X-ray systems post-installation?

The provided data does not specify the performance metrics or operational success indicators for the AT-2 X-ray systems. Typically, for such security equipment, key performance indicators (KPIs) would include detection rates for specific threats (e.g., explosives, weapons), false alarm rates, system uptime and reliability, throughput capacity (items screened per hour), and user feedback on ease of operation and maintenance. Without these defined metrics, it is challenging to objectively assess whether the $25.4 million investment is delivering the expected improvements in security effectiveness and operational efficiency for the TSA.

How does the total spending on advanced X-ray systems by the TSA and DHS compare to previous fiscal years or other similar security equipment procurements?

To assess historical spending patterns, one would need to analyze TSA and DHS procurement data for advanced X-ray systems and comparable security equipment over multiple fiscal years. This analysis should identify trends in the volume of systems purchased, average unit costs, and the total investment in screening technology. Comparing this $25.4 million expenditure to previous procurements of similar systems (e.g., previous generations of X-ray machines or other advanced detection technologies like millimeter wave scanners) would reveal whether this represents an increase, decrease, or stable level of investment in security technology. Understanding these patterns provides context for the current procurement's scale and significance.

What are the potential long-term sustainment and maintenance costs associated with operating 257 advanced technology X-ray systems?

The long-term sustainment and maintenance costs for 257 advanced technology X-ray systems are a critical consideration beyond the initial acquisition price. These costs typically include service contracts, spare parts, software updates, specialized technician training, and potential upgrades. Given the 'advanced technology' nature, maintenance may require specialized personnel and proprietary parts, potentially leading to higher recurring expenses compared to less sophisticated equipment. A thorough analysis would involve examining the vendor's proposed sustainment plan, warranty provisions, and estimated costs for the expected operational lifespan of the systems (often 10-15 years).

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: OSI Systems Inc (UEI: 178295812)

Address: 2805 COLUMBIA ST, TORRANCE, CA, 90503

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,353,017

Exercised Options: $25,353,017

Current Obligation: $25,353,017

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: HSTS0410DCT2118

IDV Type: IDC

Timeline