DHS awarded $65M for electronic equipment maintenance, a sole-source contract with limited competition

Contract Overview

Contract Amount: $65,239,534 ($65.2M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2011-07-01

End Date: 2012-06-30

Contract Duration: 365 days

Daily Burn Rate: $178.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: L-3 COMMUNICATIONS HSTS04-11-R-CT3006 THE PURPOSE OF TASK ORDER #1 IS TO ACQUIRE PREVENTATIVE MAINTENANCE AND CORRECTIVE MAINTENANCE (PM/CM) SERVICES FOR EDS, PM/CM FOR UPS UNITS, AND PROGRAM MANAGEMENT SUPPORT, UNDER L-3'S ILS CONTRACT HSTS04-11-D-CT3083.

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $65.2 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: L-3 COMMUNICATIONS HSTS04-11-R-CT3006 THE PURPOSE OF TASK ORDER #1 IS TO ACQUIRE PREVENTATIVE MAINTENANCE AND CORRECTIVE MAINTENANCE (PM/CM) SERVICES FOR EDS, PM/CM FOR UPS UNITS, AND PROGRAM MANAGEMENT SUPPORT, UNDER L-3'S ILS CONTRACT HSTS04-11-D-CT3083. Key points: 1. The contract focuses on preventative and corrective maintenance for electronic systems, including UPS units. 2. Program management support is also included, indicating a comprehensive service requirement. 3. The award was made on a firm-fixed-price basis, which shifts some cost risk to the contractor. 4. The duration of the task order was one year, suggesting a need for ongoing, but not indefinite, support. 5. The contract was not competed, raising questions about potential cost savings through a competitive process. 6. The specific NAICS code (811219) points to a specialized repair and maintenance market.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the lack of publicly available comparable contract data for similar specialized maintenance services. The firm-fixed-price structure provides cost certainty for the government, but without competition, it's difficult to ascertain if the price reflects optimal market value. The total award amount of over $65 million for a one-year period for maintenance services suggests a significant operational requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This task order was not competed, indicating a sole-source award. The contract was issued under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract (HSTS04-11-D-CT3083) held by L-3 Communications. While IDIQ vehicles can facilitate faster procurement, the lack of specific competition for this task order means the government did not explore pricing from multiple vendors for these particular services.

Taxpayer Impact: The absence of competition for this significant award means taxpayers may not have benefited from potential cost reductions that could have arisen from a competitive bidding process.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving essential maintenance for its electronic systems. This ensures the operational readiness of critical equipment used in transportation security. The services support the ongoing functioning of security infrastructure, contributing to national security. The contract's impact is primarily on the operational efficiency of the TSA's technology assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a substantial award amount raises concerns about potential overpayment.
Sole-source awards can limit opportunities for innovative solutions from a wider range of vendors.
Reliance on a single contractor for critical maintenance could pose a risk if performance degrades.

Positive Signals

The firm-fixed-price contract structure provides budget certainty for the government.
Awarding under an existing IDIQ contract suggests a pre-established relationship and potentially streamlined administrative processes.
The contract specifies preventative maintenance, which is crucial for extending equipment life and reducing costly failures.

Sector Analysis

The electronic and precision equipment repair and maintenance sector is vital for ensuring the operational continuity of government technology assets. This contract falls under the broader category of specialized technical services. The market for such services can be competitive, but specific niche requirements, as potentially indicated here, might lead to fewer bidders or sole-source awards. The total spending in this sector by the government is substantial, supporting a wide array of equipment across various agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of subcontracting goals for small businesses (sb: false). Therefore, this award does not appear to directly benefit the small business ecosystem through set-asides or explicit subcontracting requirements. The prime contractor, Leidos Security Detection & Automation, Inc., is a large business, suggesting that the primary focus was on fulfilling the service requirement rather than promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. As a task order under an IDIQ, the oversight mechanisms would be tied to the parent contract's administration. Transparency is limited due to the sole-source nature of the award, making detailed public scrutiny of the procurement process difficult. There is no specific mention of an Inspector General review in the provided data, but IG oversight is a standard component of federal contract management.

Related Government Programs

Transportation Security Administration (TSA) Equipment Maintenance
Department of Homeland Security (DHS) IT and Equipment Services
Federal Electronic Equipment Repair Contracts
Preventative Maintenance Services Contracts
Corrective Maintenance Services Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Contract performance risk (unknown)

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $65.2 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. L-3 COMMUNICATIONS HSTS04-11-R-CT3006 THE PURPOSE OF TASK ORDER #1 IS TO ACQUIRE PREVENTATIVE MAINTENANCE AND CORRECTIVE MAINTENANCE (PM/CM) SERVICES FOR EDS, PM/CM FOR UPS UNITS, AND PROGRAM MANAGEMENT SUPPORT, UNDER L-3'S ILS CONTRACT HSTS04-11-D-CT3083.

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 $65.2 million.

What is the period of performance?

Start: 2011-07-01. End: 2012-06-30.

What is the track record of L-3 Communications (now part of L3Harris Technologies) in performing similar maintenance services for federal agencies?

L-3 Communications, and subsequently L3Harris Technologies, has a long history of providing complex technical services and equipment to the federal government, including maintenance and support. Their portfolio often includes defense, aerospace, and security-related technologies. While specific performance metrics for this particular task order are not detailed in the provided data, the company's general experience suggests a capability to handle such requirements. However, a deeper dive into past performance reviews, contract termination data, and customer satisfaction surveys for similar contracts would be necessary for a comprehensive assessment of their track record on this specific type of service.

How does the $65 million award compare to other federal spending on electronic equipment maintenance in recent years?

Comparing this $65 million award requires context regarding the scope and duration. For a single year of preventative and corrective maintenance, plus program management, for specialized electronic systems, this figure is substantial. Federal spending on maintenance and repair services is vast, encompassing numerous categories and agencies. For instance, the General Services Administration (GSA) manages numerous facilities maintenance contracts, and the Department of Defense (DoD) has extensive spending on equipment upkeep. Without knowing the exact nature of the 'EDS' and 'UPS' units and the scale of the program management, a direct comparison is difficult. However, awards in the tens of millions for specialized, single-year maintenance contracts are not uncommon for critical government infrastructure.

What are the primary risks associated with a sole-source award for critical maintenance services?

The primary risks associated with a sole-source award for critical maintenance services include a lack of price competition, potentially leading to higher costs for taxpayers. There's also a reduced incentive for the contractor to innovate or improve service quality beyond the contract minimums, as there is no immediate threat of losing the business to a competitor. Furthermore, over-reliance on a single provider can create vulnerabilities if the contractor experiences financial difficulties, operational issues, or decides to exit the market. This can lead to service disruptions and difficulties in transitioning to a new provider, especially if specialized knowledge or equipment is involved.

How effective is preventative maintenance (PM) in extending the life and reliability of electronic equipment like UPS units?

Preventative maintenance (PM) is highly effective in extending the life and reliability of electronic equipment, including Uninterruptible Power Supply (UPS) units. Regular PM involves scheduled inspections, cleaning, testing, and replacement of worn components (like batteries, fans, and capacitors) before they fail. This proactive approach helps identify potential issues early, preventing minor problems from escalating into major failures that could lead to equipment downtime, data loss, or damage to connected devices. For UPS systems, which are critical for maintaining power during outages, PM ensures they are ready to perform when needed, thereby safeguarding sensitive electronic operations and reducing the overall cost of ownership through fewer emergency repairs and extended equipment lifespan.

What are the historical spending patterns for electronic equipment maintenance by the TSA or DHS?

Historical spending patterns for electronic equipment maintenance by the TSA or DHS are generally characterized by significant and consistent investment due to the critical nature of their security operations. Both agencies rely heavily on a wide array of electronic systems, from baggage screening equipment to communication networks and surveillance technology. Spending often involves a mix of large, multi-year contracts for major systems and smaller, task-order-based agreements for maintenance and repair. The TSA, in particular, has substantial needs related to its core mission of aviation security, which requires continuous upkeep of sophisticated screening devices. DHS, as a broader entity, oversees spending across various components, including cybersecurity, border security, and emergency management, all of which involve significant electronic infrastructure requiring maintenance.

Could this type of maintenance service have been procured through a competitive process, and what might have been the benefits?

It is plausible that this type of maintenance service could have been procured through a competitive process. While specialized requirements can sometimes justify sole-source awards, the description of 'preventative maintenance and corrective maintenance (PM/CM) services for EDS, PM/CM for UPS units, and program management support' suggests services that multiple qualified vendors might offer. A competitive bidding process could have potentially yielded lower prices due to market forces, encouraged innovation in service delivery, and provided greater transparency. The benefits to taxpayers could include cost savings, improved service quality through vendor competition, and a broader understanding of market rates for such services.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $65,239,534

Exercised Options: $65,239,534

Current Obligation: $65,239,534

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSTS0411DCT3083

IDV Type: IDC

Timeline