DHS awarded $71.4M contract for security systems services, primarily to one vendor

Contract Overview

Contract Amount: $71,392,660 ($71.4M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2013-07-01

End Date: 2014-06-30

Contract Duration: 364 days

Daily Burn Rate: $196.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MDI DO #10 - ILS PM/CM OY2 "IGF::CT::IGF"

Place of Performance

Location: HERNDON, LOUDOUN County, VIRGINIA, 20598

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $71.4 million to SMITHS DETECTION, INC for work described as: MDI DO #10 - ILS PM/CM OY2 "IGF::CT::IGF" Key points: 1. The contract value represents a significant investment in security systems maintenance and support. 2. Limited competition suggests potential for higher costs and reduced innovation. 3. The contract's duration and fixed-price nature indicate a predictable cost structure. 4. Performance context is crucial to assess if the services met security objectives. 5. This contract falls within the broader security and surveillance technology sector.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific service details and comparable contracts. However, a $71.4 million award for a single year of security systems services is substantial. The fixed-price contract type provides cost certainty, but the lack of competition raises concerns about whether the government achieved the best possible value. Further analysis would require comparing the scope of services and pricing against similar contracts awarded by DHS or other agencies for comparable security systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits competition and may result in higher prices than if multiple vendors had bid. The lack of a competitive process prevents price discovery and may indicate a reliance on a specific vendor's capabilities or a failure to adequately explore the market.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing. The absence of competition limits opportunities for cost savings and potentially leads to overpayment for services.

Public Impact

The Transportation Security Administration (TSA) benefits from this contract through the maintenance and support of critical security systems. Services delivered likely include the upkeep, repair, and potentially upgrades of security screening equipment and related infrastructure. The geographic impact is primarily within the United States, supporting TSA operations at various transportation hubs. Workforce implications could involve specialized technicians and support staff employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition may stifle innovation and reduce vendor accountability.
Contract value is high, necessitating close scrutiny of performance and deliverables.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Contract awarded to a known entity (Smiths Detection) may imply prior satisfactory performance.
Specific NAICS code (561621) indicates a focus on specialized security systems services.

Sector Analysis

The security systems services sector encompasses a wide range of products and services, including alarm systems, surveillance equipment, and access control. This contract, focused on security systems services (NAICS 561621), falls within the broader security and defense technology market. The total federal spending in this category can be substantial, with agencies like Homeland Security being major purchasers. Comparable spending benchmarks would involve looking at other large contracts for security system maintenance and support across federal agencies.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides or subcontracting requirements. This suggests that small businesses were not specifically targeted for this award, and their participation is unlikely unless they are direct subcontractors to the prime vendor. The lack of a small business focus in this large sole-source award could limit opportunities within the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. The Inspector General for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Homeland Security - Security Equipment Procurement
Transportation Security Administration - Technology and Infrastructure
Federal Contracts for Security Systems Maintenance
Sole-Source Contract Awards Analysis

Risk Flags

Sole-source award
High contract value
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $71.4 million to SMITHS DETECTION, INC. MDI DO #10 - ILS PM/CM OY2 "IGF::CT::IGF"

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 $71.4 million.

What is the period of performance?

Start: 2013-07-01. End: 2014-06-30.

What is the track record of Smiths Detection, Inc. with federal contracts, particularly with DHS?

Smiths Detection, Inc. has a significant history of contracting with the U.S. federal government, particularly within the Department of Homeland Security (DHS) and its various components like the Transportation Security Administration (TSA). Their awards often relate to security screening technology, including baggage scanners, explosive detection systems, and related services. Analyzing their past performance on similar contracts, including any reported issues, contract modifications, or performance evaluations, would provide crucial context for assessing the value and risk associated with this $71.4 million award. A review of their contract history can reveal patterns in pricing, delivery, and adherence to contract terms, helping to determine if they are a reliable and cost-effective provider for essential security systems services.

How does the $71.4 million contract value compare to similar security systems services contracts awarded by DHS or other agencies?

Comparing the $71.4 million contract value requires identifying similar contracts for security systems services (NAICS 561621) awarded by DHS or other federal agencies over comparable periods. Without specific details on the scope of services (e.g., maintenance, repair, software support, specific equipment types), a direct comparison is difficult. However, a $71.4 million award for a single year (July 2013 - June 2014) is substantial. If similar contracts for comparable services were awarded through competitive processes at significantly lower prices, it would indicate potential overpayment or lack of value in this sole-source award. Conversely, if other large, sole-source contracts for similar critical security infrastructure exist, it might suggest market limitations or unique requirements driving the cost.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($71.4 million) include inflated pricing due to the lack of competition, potential for complacency from the contractor regarding service quality and innovation, and a reduced ability for the government to leverage market dynamics for better terms. Taxpayers may bear a higher cost than necessary. Furthermore, reliance on a single vendor can create vulnerabilities if that vendor experiences financial difficulties, operational disruptions, or fails to meet performance expectations. The government also loses the opportunity to foster competition and potentially discover more cost-effective solutions or emerging technologies from a wider pool of vendors.

How effective are the oversight mechanisms for sole-source contracts within DHS?

Oversight mechanisms for sole-source contracts within DHS are designed to mitigate the inherent risks of non-competitive awards. These typically involve rigorous justification and approval processes for sole-source justifications, requiring agencies to demonstrate why competition is not feasible. Contract performance is monitored through contract officers' representatives (CORs) and program managers who track deliverables, milestones, and adherence to service level agreements. Financial oversight is provided by contracting officers and potentially the DHS Office of Inspector General (OIG), which can audit contract spending and performance. Transparency can be a challenge, but reporting requirements and regular performance reviews are key oversight tools.

What is the historical spending pattern for security systems services by the TSA?

Historical spending patterns for security systems services by the TSA reveal a consistent need for maintenance, support, and upgrades of sophisticated security equipment. Over the years, the TSA has allocated significant funds to ensure the operational readiness of baggage scanners, passenger screening systems, and other critical security technologies. Spending in this area is often driven by evolving threats, technological advancements, and regulatory requirements. Analyzing TSA's budget allocations and contract awards for security systems services over multiple fiscal years would show trends in investment, identify key contractors, and highlight the agency's ongoing commitment to maintaining a robust security infrastructure.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › EQUIPMENT AND MATERIALS TESTING

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: $71,392,660

Exercised Options: $71,392,660

Current Obligation: $71,392,660

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HSTS0411DCT3072

IDV Type: IDC

Timeline