DHS awards $68.5M for explosives detection system maintenance, a sole-source contract

Contract Overview

Contract Amount: $68,480,144 ($68.5M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2016-07-14

End Date: 2017-07-31

Contract Duration: 382 days

Daily Burn Rate: $179.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF THIS TO IS TO FUND YEAR 2 OF THE MORPHO DETECTION (MD) PERFORMANCE-BASED LOGISTICS (PBL) SUPPORT PROGRAM TO SUSTAIN GOVERNMENT-CERTIFIED EXPLOSIVES DETECTION SYSTEMS (EDS), AND ASSOCIATED PERIPHERAL EQUIPMENT DEPLOYED AND OPERATED BY THE TRANSPORTATION SECURITY ADMINISTRATION (TSA) FROM 8/1/2016 THROUGH 7/31/2017. THE PBL SUPPORT INCLUDES, BUT IS NOT LIMITED TO, PROGRAM MANAGEMENT, CORRECTIVE AND PREVENTIVE MAINTENANCE; MAINTENANCE PLANNING; SUPPLY SUPPORT; TOOLS, TEST EQUIPMENT AND CALIBRATION; PARTS AND PARTS OBSOLESCENCE; AND SUBCONTRACT AGREEMENTS. JUST A NOTE (FROM THE SUBMITTER VIA EMAIL), REFER TO THE FIRST TAB (PR YEAR 2) TO GET THE TOTAL SHOWN ABOVE. (FJA/20160216) POP THROUGH 07/31/2017

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $68.5 million to SMITHS DETECTION, INC for work described as: IGF::CT::IGF THIS TO IS TO FUND YEAR 2 OF THE MORPHO DETECTION (MD) PERFORMANCE-BASED LOGISTICS (PBL) SUPPORT PROGRAM TO SUSTAIN GOVERNMENT-CERTIFIED EXPLOSIVES DETECTION SYSTEMS (EDS), AND ASSOCIATED PERIPHERAL EQUIPMENT DEPLOYED AND OPERATED BY THE TRANSPORTATION SECURITY ADMI… Key points: 1. The contract focuses on performance-based logistics for explosives detection systems, ensuring operational readiness. 2. Maintenance includes program management, corrective and preventive actions, and supply chain support. 3. The contract duration is approximately one year, aligning with operational needs. 4. The sole-source nature raises questions about potential cost efficiencies and market alternatives. 5. This spending supports critical security infrastructure within the Transportation Security Administration (TSA). 6. The contract is for repair and maintenance of electronic equipment, a specialized service.

Value Assessment

Rating: fair

The contract value of $68.5 million for a one-year period for maintenance of specialized equipment appears substantial. Without comparable sole-source contracts or detailed cost breakdowns, it is difficult to definitively benchmark value for money. The performance-based logistics (PBL) approach suggests a focus on outcomes, which can be efficient if executed well, but the lack of competition limits price discovery and potential savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific vendor possesses unique capabilities, proprietary technology, or is the sole provider of necessary parts or services. The lack of competition means that pricing and terms were likely negotiated directly with the contractor, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as there was no market pressure to drive down prices. The government did not explore potentially more cost-effective solutions from other vendors.

Public Impact

Passengers and cargo screened at airports benefit from the reliable operation of explosives detection systems. The Transportation Security Administration (TSA) is the primary beneficiary, ensuring its security mission is supported. The contract supports maintenance operations primarily in California, where the contractor is located. The contract ensures the continued functionality of critical security equipment, indirectly supporting aviation and transportation security jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
Performance-based logistics can be complex to manage and ensure true value for money.
Reliance on a single provider for critical maintenance could pose supply chain risks.

Positive Signals

Performance-based logistics aims to ensure system availability and reduce downtime.
Contracting for maintenance of specialized equipment is necessary for operational continuity.
The contractor, Smiths Detection, is a known entity in the explosives detection market.

Sector Analysis

This contract falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' sector, specifically supporting security technology. The market for explosives detection systems (EDS) and their maintenance is specialized, often dominated by a few key manufacturers. Spending on such systems and their upkeep is crucial for national security and transportation safety, with government agencies like TSA being major clients. Benchmarking is difficult due to the specialized nature and sole-source award.

Small Business Impact

The provided data does not indicate any small business set-aside provisions or subcontracting plans. As a sole-source award to a specific large contractor, the direct impact on the small business ecosystem is likely minimal, unless the prime contractor engages small businesses for specific support roles not detailed here.

Oversight & Accountability

Oversight would typically be managed by the contracting officer's representative (COR) within the TSA, ensuring that the terms of the performance-based logistics contract are met. Transparency is limited due to the sole-source nature. Inspector General oversight would apply to ensure proper use of funds and contract compliance.

Related Government Programs

Transportation Security Administration (TSA) Operations
Explosives Detection Systems Maintenance
Homeland Security Technology Procurement
Performance-Based Logistics Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Reliance on single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $68.5 million to SMITHS DETECTION, INC. IGF::CT::IGF THIS TO IS TO FUND YEAR 2 OF THE MORPHO DETECTION (MD) PERFORMANCE-BASED LOGISTICS (PBL) SUPPORT PROGRAM TO SUSTAIN GOVERNMENT-CERTIFIED EXPLOSIVES DETECTION SYSTEMS (EDS), AND ASSOCIATED PERIPHERAL EQUIPMENT DEPLOYED AND OPERATED BY THE TRANSPORTATION SECURITY ADMINISTRATION (TSA) FROM 8/1/2016 THROUGH 7/31/2017. THE PBL SUPPORT INCLUDES, BUT IS NOT LIMITED TO, PROGRAM MANAGEMENT, CORRECTIVE AND PREVENTIVE MAINTENANCE; MAINTENANCE PLANNING; SUPPLY SUPPORT; TOOLS, TEST EQUIPMENT AN

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 $68.5 million.

What is the period of performance?

Start: 2016-07-14. End: 2017-07-31.

What is the historical spending trend for this specific explosives detection system maintenance program?

The provided data indicates this is for Year 2 of the Morpho Detection (MD) Performance-Based Logistics (PBL) Support Program. While the specific dollar amount for Year 2 is $68.5 million, historical data for Year 1 or previous contracts for similar systems is not included in this snippet. To assess spending trends, one would need to examine prior contract awards for this program or comparable EDS maintenance contracts awarded by the TSA or other agencies. A trend analysis would reveal if spending is increasing, decreasing, or remaining stable over time, which could inform future budget planning and identify potential cost efficiencies or escalating maintenance needs.

How does the per-unit cost of maintaining these explosives detection systems compare to industry benchmarks?

Determining a precise per-unit cost for maintaining these explosives detection systems is challenging with the provided data. The total contract value is $68.5 million for a one-year period, supporting systems deployed by the TSA. However, the number of systems covered, their specific models, and the exact scope of 'performance-based logistics' (which can include various levels of service, parts, and management) are not detailed. Without knowing the total number of systems under contract or a breakdown of costs per service component, a direct per-unit comparison to industry benchmarks is not feasible. Typically, such benchmarks would be derived from aggregated data on maintenance costs for similar EDS equipment across different agencies or private sector entities.

What are the specific performance metrics and key performance indicators (KPIs) tied to this performance-based logistics contract?

The provided data mentions 'performance-based logistics (PBL) support' but does not specify the exact performance metrics or Key Performance Indicators (KPIs) established for this contract. In a PBL arrangement, KPIs are crucial for measuring the contractor's success in delivering desired outcomes, such as system uptime, response times for maintenance, parts availability, and overall operational readiness of the explosives detection systems (EDS). Without access to the contract's statement of work or performance work statement, it's impossible to detail these specific metrics. Effective PBL contracts clearly define these KPIs and link them to payment or incentive structures to ensure the government receives tangible value.

What is the track record of Smiths Detection, Inc. in fulfilling similar performance-based logistics contracts for government agencies?

Smiths Detection, Inc. is a recognized provider of security screening technology, including explosives detection systems. They have a history of supplying equipment and support services to government agencies, including the TSA. While this specific data snippet doesn't detail their performance on this particular PBL contract (as it's for Year 2), their broader track record would involve assessing past contracts for similar services. This would include evaluating their ability to meet delivery schedules, maintain system performance, manage supply chains effectively, and adhere to budget constraints on previous government contracts. A comprehensive assessment would require reviewing past performance evaluations and contract histories.

Are there any identified risks associated with the sole-source nature of this contract, beyond potential cost implications?

Yes, beyond potential cost implications, the sole-source nature of this contract presents several risks. Firstly, there's a risk of vendor lock-in, where the government becomes heavily reliant on Smiths Detection, making it difficult and costly to switch providers in the future, even if better alternatives emerge. Secondly, without competition, there might be reduced incentive for the contractor to proactively innovate or offer service improvements beyond the minimum contractual requirements. Thirdly, if Smiths Detection faces financial difficulties or operational disruptions, the government has limited immediate recourse to alternative suppliers for critical maintenance, potentially impacting national security operations. Finally, the lack of transparency inherent in sole-source awards can sometimes mask inefficiencies or suboptimal practices.

What is the potential impact of this contract on the overall security posture and operational efficiency of the TSA?

This contract is directly linked to the operational efficiency and security posture of the TSA. By ensuring the maintenance and readiness of explosives detection systems (EDS), it directly supports the TSA's primary mission of preventing acts of terrorism and ensuring safety in transportation. Reliable EDS performance is critical for effective screening of passengers and baggage. The performance-based logistics (PBL) approach aims to guarantee a certain level of system availability and rapid response to maintenance needs, thereby minimizing disruptions to screening operations and maintaining a robust security barrier. A failure in these systems could lead to significant security vulnerabilities and operational delays.

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: Safran Power USA LLC (UEI: 275374015)

Address: 7151 GATEWAY BLVD, NEWARK, CA, 94560

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: $68,480,144

Exercised Options: $68,480,144

Current Obligation: $68,480,144

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSTS0415DCT3002

IDV Type: IDC

Timeline