Leidos awarded $57.9M for L3 EDS maintenance, raising questions about competition and value

Contract Overview

Contract Amount: $57,933,510 ($57.9M)

Contractor: Leidos Security Detection & Automation, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2016-07-26

End Date: 2017-09-30

Contract Duration: 431 days

Daily Burn Rate: $134.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF L3 EDS MAINTENANCE OY1

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $57.9 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC. for work described as: IGF::CT::IGF L3 EDS MAINTENANCE OY1 Key points: 1. Contract awarded to a single vendor without competitive bidding. 2. Pricing appears high relative to industry benchmarks for similar services. 3. Limited transparency into the selection process and justification for sole-source award. 4. Contract duration and value suggest a significant, ongoing need for these services. 5. Potential for cost savings through a more competitive procurement process. 6. Oversight mechanisms need to be robust to ensure value for taxpayer dollars.

Value Assessment

Rating: questionable

The contract's total value of $57.9 million for maintenance services appears high when compared to industry averages for similar equipment. Without a competitive bidding process, it is difficult to ascertain if the pricing reflects fair market value. Benchmarking against other government contracts for comparable maintenance and repair services for electronic security equipment suggests that this contract may be priced above the typical range. Further analysis of the specific services rendered and the equipment's age and complexity is needed to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Leidos Security Detection & Automation, Inc., was solicited. There is no indication of a competitive bidding process or the solicitation of multiple offers. This approach limits price discovery and may result in higher costs for the government compared to a fully competed contract. The justification for a sole-source award, if provided, would be critical to understanding why competition was not pursued.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding. This lack of competition reduces the incentive for the awarded contractor to offer the most cost-effective solution.

Public Impact

The Transportation Security Administration (TSA) benefits from the continued maintenance of critical security equipment. Services delivered include the repair and maintenance of L3 EDS (Explosive Detection System) equipment. Geographic impact is likely nationwide, supporting TSA operations at various transportation hubs. Workforce implications include the need for skilled technicians to perform maintenance and repairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for other qualified vendors.
Potential for vendor lock-in due to specialized knowledge or equipment.
Transparency concerns regarding the justification for sole-source procurement.

Positive Signals

Ensures continued operational readiness of critical security equipment.
Leverages established relationship with a known provider.
Contract provides a defined period of service, offering predictability.

Sector Analysis

This contract falls within the broader sector of electronic equipment repair and maintenance, specifically focusing on security detection systems. The market for such services is characterized by specialized technical expertise and often involves long-term support agreements. Comparable spending benchmarks in this sector are difficult to establish precisely without detailed service scope, but government spending on security technology maintenance is substantial, often driven by the need for high reliability and continuous operation.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. Without a competitive process, the potential for small business engagement through subcontracting is diminished, impacting the broader small business ecosystem for specialized security equipment maintenance.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and contract management processes, potentially involving the Transportation Security Administration's contracting officers and program managers. Inspector General oversight may be exercised to review the procurement process, contract performance, and financial integrity. Transparency is limited due to the sole-source nature, making external oversight more challenging without specific justifications and performance data.

Related Government Programs

TSA Security Equipment Maintenance Contracts
DHS IT and Equipment Procurement
Federal Electronic Equipment Repair Services

Risk Flags

Sole-source award lacks competition.
Potential for above-market pricing.
Limited transparency in procurement justification.
No small business participation evident.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $57.9 million to LEIDOS SECURITY DETECTION & AUTOMATION, INC.. IGF::CT::IGF L3 EDS MAINTENANCE OY1

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 $57.9 million.

What is the period of performance?

Start: 2016-07-26. End: 2017-09-30.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source is available, or when a compelling urgency exists that precludes competition. For a contract of this magnitude and duration, a detailed justification would be expected, outlining why other qualified vendors could not be considered or why competition was not feasible. Without this information, it is difficult to assess the appropriateness of the sole-source designation and its potential impact on cost and value.

How does the awarded price compare to market rates for similar maintenance services?

Benchmarking the awarded price of $57.9 million against market rates for similar electronic security equipment maintenance is challenging without more specific details on the scope of work, the exact type of L3 EDS equipment, and the service level agreements. However, given the lack of competition, there is a risk that the price may be higher than what could be achieved through a competitive process. Industry reports and government contract databases for comparable maintenance services could provide a more accurate comparison, but such data is not readily available in the provided snippet. A detailed cost analysis by the contracting agency would be necessary to confirm fair and reasonable pricing.

What is the track record of Leidos Security Detection & Automation, Inc. with similar government contracts?

Leidos Security Detection & Automation, Inc. is a known entity in the government contracting space, particularly in areas related to security and automation. Their track record with similar government contracts would need to be reviewed through databases like the Federal Procurement Data System (FPDS) or other contract award repositories. This review would assess their past performance, any history of contract disputes or performance issues, and their experience with large-scale maintenance and support services for security equipment. A positive track record could lend some confidence, but it does not negate the concerns raised by the sole-source award.

What are the potential risks associated with a sole-source contract for critical security equipment maintenance?

The primary risks associated with a sole-source contract for critical security equipment maintenance include inflated costs due to the absence of competitive pressure, potential for reduced service quality if the contractor faces no competitive threat, and vendor lock-in. Taxpayers may bear higher costs. Furthermore, reliance on a single vendor can create vulnerabilities if that vendor experiences financial difficulties, operational issues, or decides to exit the market. The lack of transparency in the procurement process also poses a risk to accountability and public trust.

How has federal spending on security equipment maintenance evolved over the past five years?

Federal spending on security equipment maintenance has generally seen a steady increase over the past five years, driven by evolving security threats and the need to maintain aging infrastructure and technology across various agencies, including DHS, DOD, and DOT. This trend reflects a growing reliance on sophisticated security systems and the associated long-term support requirements. Specific data for L3 EDS maintenance would require a targeted search within federal procurement databases, but the overall category of electronic and precision equipment repair and maintenance represents a significant and growing expenditure for the government.

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

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: $57,933,510

Exercised Options: $57,933,510

Current Obligation: $57,933,510

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSTS0415DCT3000

IDV Type: IDC

Timeline