DHS awards $27.7M for 27 EDS units, raising questions about limited competition and value

Contract Overview

Contract Amount: $27,705,000 ($27.7M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2014-01-16

End Date: 2015-01-15

Contract Duration: 364 days

Daily Burn Rate: $76.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DO 20 HSTS04-14-J-CT1049: PURCHASE 27 EDS UNITS AT A LIMITED RATE, AS AUTHORIZED BY THE DHS ARB.

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $27.7 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: DO 20 HSTS04-14-J-CT1049: PURCHASE 27 EDS UNITS AT A LIMITED RATE, AS AUTHORIZED BY THE DHS ARB. Key points: 1. The contract was awarded at a limited competition rate, potentially impacting price discovery. 2. The per-unit cost of approximately $1.02M for EDS units appears high compared to industry benchmarks. 3. The contract's duration of 364 days is relatively short for the acquisition of specialized equipment. 4. The award was a delivery order under a larger contract, suggesting a pre-existing relationship. 5. The specific application of the EDS units within Transportation Security Administration operations warrants further investigation. 6. The lack of small business subcontracting raises questions about broader economic impact.

Value Assessment

Rating: questionable

The awarded amount of $27.7 million for 27 EDS units results in a per-unit cost of approximately $1.02 million. This figure appears to be on the higher end when compared to publicly available data for similar Explosives Detection System (EDS) units, which can range significantly based on technology and capabilities. Without specific details on the model and features of these EDS units, a precise benchmark is difficult, but the cost warrants scrutiny for potential overpayment or a lack of competitive pressure driving down prices.

Cost Per Unit: Approximately $1.02 million per unit.

Competition Analysis

Competition Level: limited

The contract was awarded under a limited competition, as indicated by the data. This means that not all potential offerors were solicited, which can occur for various reasons, including specific technical requirements or existing contract vehicles. The limited nature of the competition raises concerns about whether the government received the best possible pricing and terms, as a broader solicitation typically fosters more robust price discovery and innovation among a wider pool of vendors.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers, as it reduces the pressure on contractors to offer their most competitive bids. This can result in less value for money spent by the government.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving 27 EDS units to enhance security screening capabilities. These EDS units are intended to improve the detection of explosives and other threats at transportation hubs. The geographic impact is likely concentrated at airports or other transportation facilities where the TSA operates. The acquisition of new equipment may necessitate training for TSA personnel, potentially impacting the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher per-unit cost for the EDS units.
The specific technical requirements that led to limited competition are not detailed, raising questions about necessity.
The contract does not appear to have included small business set-aside provisions, potentially limiting opportunities for smaller firms.
The short contract duration for equipment acquisition might indicate a need for further, potentially more expensive, follow-on contracts.

Positive Signals

The award was made to Leidos Security Detection & Automation, Inc., a known entity in the security technology sector.
The contract was a delivery order, suggesting it was part of an existing framework that may have undergone some level of vetting.
The contract utilized a Firm Fixed Price (FFP) type, which helps in budget predictability for the government.

Sector Analysis

The market for Explosives Detection Systems (EDS) is a critical segment within the broader security and defense industry. This sector is characterized by high technological barriers to entry and significant research and development investments. Government agencies, particularly those involved in transportation security like the TSA, are major customers. Spending in this area is driven by evolving threat landscapes and regulatory requirements. Comparable spending benchmarks are difficult to establish without precise unit specifications, but large-scale procurements of advanced screening technology often run into tens or hundreds of millions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the competition, even if limited, was open to all eligible large businesses. There is no explicit information regarding subcontracting plans for small businesses. Consequently, this procurement may not have directly benefited the small business ecosystem, and opportunities for small business participation in delivering these specialized EDS units appear to be minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's internal procurement and program management offices, as well as the Transportation Security Administration. The contract was a delivery order, suggesting it was issued under a pre-existing contract vehicle, which likely had its own oversight mechanisms. Transparency regarding the specific justifications for limited competition and the detailed technical specifications of the EDS units would be key to assessing accountability. Inspector General reviews could be initiated if specific concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Department of Homeland Security - Transportation Security Administration
Explosives Detection Systems (EDS)
Security Screening Equipment Procurement
Federal Supply Schedule (FSS) Contracts
Defense Logistics Agency (DLA) - if applicable for similar equipment

Risk Flags

Limited Competition
High Per-Unit Cost
Lack of Small Business Participation
Unspecified Technical Details

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $27.7 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. DO 20 HSTS04-14-J-CT1049: PURCHASE 27 EDS UNITS AT A LIMITED RATE, AS AUTHORIZED BY THE DHS ARB.

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 $27.7 million.

What is the period of performance?

Start: 2014-01-16. End: 2015-01-15.

What specific model of EDS units were procured, and what are their technical capabilities?

The provided data does not specify the exact model of the 27 EDS units procured by the Department of Homeland Security (DHS) for the Transportation Security Administration (TSA). The North American Industry Classification System (NAICS) code 334517, 'Irradiation Apparatus Manufacturing,' offers a broad classification but does not pinpoint the specific technology. To fully assess the value and appropriateness of the $27.7 million award, understanding the technical specifications, such as detection sensitivity, throughput rate, imaging technology (e.g., CT, dual-energy X-ray), and integration capabilities with existing security infrastructure, is crucial. Without this information, it is challenging to definitively benchmark the per-unit cost of approximately $1.02 million against comparable systems in the market.

What was the justification for awarding this contract under limited competition?

The data indicates the contract was awarded at a 'limited rate' and specifies 'limited competition.' The precise justification for this limited competition is not detailed in the provided information. Typically, limited competition is permissible under Federal Acquisition Regulation (FAR) Part 6 when only one responsible source is available, or under specific exceptions like urgency or when the acquisition is a follow-on to a prior contract where competition was previously met. For this DHS contract, the reason could stem from unique technological requirements, proprietary systems, or the need for rapid deployment under specific circumstances authorized by the DHS Acquisition Review Board (ARB). A thorough review of the Justification for Other Than Full and Open Competition (JOFOC) would be necessary to understand the rationale.

How does the per-unit cost of $1.02 million compare to similar EDS procurements by government agencies?

The per-unit cost of approximately $1.02 million for the 27 EDS units is a significant figure that warrants comparison with other government procurements. While exact comparisons are challenging without knowing the specific model and capabilities, historical data from agencies like the TSA, Federal Aviation Administration (FAA), and Department of Defense (DoD) reveal a wide range for EDS systems. Advanced, high-throughput CT-based EDS units can indeed cost upwards of $1 million per system, especially when factoring in installation, training, and initial support. However, less advanced or lower-throughput systems can be considerably less expensive. The 'limited competition' aspect of this award suggests that a robust price comparison might not have been fully realized, potentially leading to a cost that is higher than what could have been achieved through full and open competition.

What is the track record of Leidos Security Detection & Automation, Inc. in providing similar security equipment to the government?

Leidos Security Detection & Automation, Inc. (and its predecessors/related entities) has a substantial track record in providing security and detection solutions to government agencies, including the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA). They are known for developing and supplying various screening technologies, including EDS. Their experience often involves large-scale contracts for advanced security equipment. While this specific award was a delivery order, Leidos has likely been a significant player in the broader EDS market, participating in numerous competitive solicitations and fulfilling complex requirements. Their established presence suggests a capacity to deliver, but the specifics of past performance on similar EDS contracts, including adherence to schedule and budget, would be key to a comprehensive assessment.

What are the potential risks associated with acquiring EDS units under limited competition?

Acquiring Explosives Detection Systems (EDS) under limited competition presents several potential risks. Firstly, there is the risk of paying a higher price than necessary due to the lack of robust market competition, which can lead to suboptimal value for taxpayer money. Secondly, limited competition might restrict the government's access to the most innovative or suitable technologies available, as only a select few vendors are considered. Thirdly, it could foster a perception of favoritism or a lack of transparency in the procurement process. Finally, over-reliance on a limited number of suppliers could create future dependency and potentially weaken the government's negotiating position in subsequent procurements or sustainment activities.

What is the historical spending pattern for EDS units by the TSA or DHS?

Historical spending patterns for EDS units by the TSA and DHS are characterized by significant, multi-year investments driven by evolving security mandates and technological advancements. The TSA, in particular, has undertaken major programs to upgrade its EDS fleet, often involving large-scale procurements of hundreds or even thousands of units. These procurements are typically conducted through full and open competition, although specific technology refreshes or specialized needs might lead to limited competition for certain systems. Spending can fluctuate based on budget allocations, threat assessments, and the lifecycle of existing equipment. Analyzing past contract awards, including the number of bidders, contract values, and per-unit costs for different EDS generations, would provide a clearer picture of historical spending trends and value achieved.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus 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: L3 Technologies, Inc. (UEI: 008898884)

Address: 10E COMMERCE WAY, WOBURN, MA, 01801

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: $27,705,000

Exercised Options: $27,705,000

Current Obligation: $27,705,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSTS0412DCT1200

IDV Type: IDC

Timeline