Homeland Security's $73.2M contract for security system maintenance awarded to Smiths Detection, Inc. without competition

Contract Overview

Contract Amount: $73,241,227 ($73.2M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2012-07-01

End Date: 2013-06-30

Contract Duration: 364 days

Daily Burn Rate: $201.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DELIVERY ORDER HSTS04-12-J-CT3054 (DO 4) AGAINST CONTRACT HSTS04-11-D-CT3072 IS TO PURCHASE PROGRAM MANAGEMENT AND CORRECTIVE/PREVENTIVE MAINTENANCE SERVICES FOR OPTION PERIOD 1 FROM JULY 1, 2012 THROUGH JUNE 30, 2013.

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $73.2 million to SMITHS DETECTION, INC for work described as: DELIVERY ORDER HSTS04-12-J-CT3054 (DO 4) AGAINST CONTRACT HSTS04-11-D-CT3072 IS TO PURCHASE PROGRAM MANAGEMENT AND CORRECTIVE/PREVENTIVE MAINTENANCE SERVICES FOR OPTION PERIOD 1 FROM JULY 1, 2012 THROUGH JUNE 30, 2013. Key points: 1. The contract value represents a significant investment in maintaining critical security systems. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and lack of market pressure. 3. Performance risk is moderate given the firm-fixed-price structure, but continuity of service is paramount. 4. The contract duration of one year suggests a focus on immediate operational needs rather than long-term strategic planning. 5. This spending falls within the security systems services sector, essential for transportation security. 6. The absence of competition raises questions about the government's ability to secure the best possible value. 7. The contract's value is substantial, requiring careful oversight to ensure efficient use of taxpayer funds.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of program management and corrective/preventive maintenance for specialized security systems. Without competitive bids, it's difficult to ascertain if the $73.2 million represents a fair market price. The government may have paid a premium due to the lack of competition, potentially exceeding what could have been achieved through an open bidding process. Further analysis would require access to detailed cost breakdowns and comparisons with similar, competitively awarded contracts for comparable services.

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 typically occurs when only one vendor can provide the required goods or services, often due to proprietary technology, unique expertise, or urgent needs. The lack of competition means that Smiths Detection, Inc. did not face pressure from other bidders to offer lower prices or better terms. This can lead to higher costs for the government compared to a competitive procurement.

Taxpayer Impact: Taxpayers may have paid more for these services than if the contract had been competed. The absence of competitive pressure reduces the likelihood of price discovery and potentially leads to less favorable terms for the government.

Public Impact

The Transportation Security Administration (TSA) benefits directly through the continued operation and maintenance of its security systems. This contract ensures the availability of program management and corrective/preventive maintenance services for critical security infrastructure. The services are primarily delivered within California, impacting the security operations at facilities in that state. The contract supports the workforce employed by Smiths Detection, Inc. in providing these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for a sole-source award.
Potential for vendor lock-in if alternative solutions are not explored.
Contract duration of one year may not reflect long-term strategic needs or cost efficiencies.
Specific details on performance metrics and service level agreements are not readily available for assessment.

Positive Signals

Contract ensures continuity of essential security system maintenance and program management.
Firm-fixed-price contract provides cost certainty for the government once awarded.
Smiths Detection, Inc. is a known entity in the security systems market.
The contract addresses a clear operational need for the TSA.

Sector Analysis

The security systems services sector, particularly for transportation infrastructure, is critical for national security and public safety. This contract falls under the NAICS code 561621 (Security Systems Services, except Locksmiths). The market for such services is often characterized by specialized technology and expertise, which can sometimes lead to limited competition. Spending in this area is driven by the need to maintain and upgrade sophisticated screening and surveillance equipment at airports, ports, and other transportation hubs. Benchmarking is difficult without specific details on the systems being maintained.

Small Business Impact

This contract was not set aside for small businesses, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a single, likely large, contractor suggests that the primary focus was on securing specialized services rather than promoting small business participation. This approach may limit the opportunities for small businesses to enter or expand within this specific niche of security system maintenance.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security and the Transportation Security Administration. As a sole-source award, the justification and terms would be subject to review by contracting officers and potentially agency-level oversight bodies. Transparency regarding the specific performance metrics, service level agreements, and any associated Inspector General investigations would be crucial for assessing accountability. The firm-fixed-price nature provides some cost control, but ongoing monitoring of service delivery is essential.

Related Government Programs

Department of Homeland Security - Security Equipment Procurement
Transportation Security Administration - Airport Security Technology
Federal Contracts for Security Systems Maintenance
Sole-Source Procurements in Critical Infrastructure

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $73.2 million to SMITHS DETECTION, INC. DELIVERY ORDER HSTS04-12-J-CT3054 (DO 4) AGAINST CONTRACT HSTS04-11-D-CT3072 IS TO PURCHASE PROGRAM MANAGEMENT AND CORRECTIVE/PREVENTIVE MAINTENANCE SERVICES FOR OPTION PERIOD 1 FROM JULY 1, 2012 THROUGH JUNE 30, 2013.

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 $73.2 million.

What is the period of performance?

Start: 2012-07-01. End: 2013-06-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' implying a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, urgent and compelling needs, or other factors that preclude full and open competition. Without further documentation from the agency (e.g., a Justification and Approval document), the precise reason remains unknown. This lack of competition raises concerns about whether the government explored all viable options to secure the best value.

How does the $73.2 million contract value compare to similar services procured competitively?

Direct comparison of the $73.2 million contract value to similar services procured competitively is difficult without more specific information about the exact nature of the 'program management and corrective/preventive maintenance services for OPTION PERIOD 1' and the specific security systems involved. The sole-source nature of this award inherently prevents a direct price-to-price comparison with competitively bid contracts. However, it is generally understood that sole-source contracts often carry a premium compared to those awarded under full and open competition due to the absence of market-driven price pressures. To perform a robust comparison, one would need to identify contracts for similar maintenance and management of comparable security systems, ideally awarded competitively, and analyze their pricing structures and scope of work.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. For a contract of this value and nature, involving program management and maintenance of critical security systems, robust KPIs and SLAs are essential for ensuring effective service delivery and accountability. These would typically include metrics related to system uptime, response times for maintenance requests, resolution times for issues, quality of service, and adherence to schedules. The absence of this information in the summary data makes it challenging to assess the contractor's performance and the overall value derived from the contract.

What is the track record of Smiths Detection, Inc. with similar government contracts?

Smiths Detection, Inc. is a known entity in the security technology sector and has a history of providing security solutions to government agencies. While the provided data focuses on a single delivery order, Smiths Detection has likely held other contracts with the Department of Homeland Security and other federal agencies for similar equipment and services. A comprehensive assessment of their track record would involve reviewing past performance evaluations, contract history, and any documented issues or successes on previous government engagements. Their established presence suggests a level of experience, but each contract requires independent performance evaluation.

What is the historical spending trend for this type of service within the TSA or DHS?

The provided data only includes information for one delivery order (DO 4) against a specific contract (HSTS04-11-D-CT3072) for a one-year period (July 1, 2012 - June 30, 2013). This single data point is insufficient to establish any meaningful historical spending trend for program management and corrective/preventive maintenance services within the TSA or DHS. To analyze historical spending, one would need access to a broader dataset encompassing multiple years, various contracts, and potentially different types of security systems or services procured by these agencies. Without this broader context, it's impossible to determine if spending has increased, decreased, or remained stable over time.

What are the potential risks associated with relying on a single vendor for critical security system maintenance?

Relying on a single vendor, especially in a sole-source situation, presents several risks. Firstly, there's a risk of price escalation over time, as the vendor faces no competitive pressure to keep prices down. Secondly, there's a dependency risk; if the vendor experiences financial difficulties, operational issues, or decides to discontinue the service, the government could face significant disruption in critical security operations. Thirdly, there's a risk of complacency, where the vendor may not be as motivated to innovate or provide the highest level of service compared to a competitive environment. Finally, without competition, the government may not be aware of or have access to potentially better or more cost-effective solutions available from other vendors.

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: ONLY ONE SOURCE

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

Financial Breakdown

Contract Ceiling: $73,241,227

Exercised Options: $73,241,227

Current Obligation: $73,241,227

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSTS0411DCT3072

IDV Type: IDC

Timeline