DOT awards $2.1M contract for X-ray machine replacement to Point Security Inc., a sole-source procurement

Contract Overview

Contract Amount: $2,112,486 ($2.1M)

Contractor: Point Security Inc

Awarding Agency: Department of Transportation

Start Date: 2021-09-23

End Date: 2026-09-23

Contract Duration: 1,826 days

Daily Burn Rate: $1.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: X-RAY MACHINE REPLACEMENT AND MAINTENANCE FOR FAA FACILITIES

Place of Performance

Location: LEXINGTON, DAVIDSON County, NORTH CAROLINA, 27292

State: North Carolina Government Spending

Plain-Language Summary

Department of Transportation obligated $2.1 million to POINT SECURITY INC for work described as: X-RAY MACHINE REPLACEMENT AND MAINTENANCE FOR FAA FACILITIES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract duration of 1826 days (5 years) suggests a long-term need for these services. 3. Sole-source award raises questions about potential lack of competition and price optimization. 4. The contract is for replacement and maintenance, crucial for ensuring operational continuity of FAA facilities. 5. Geographic coverage is North Carolina, indicating a localized need for this equipment. 6. The contractor, Point Security Inc., is the sole recipient, highlighting a concentrated award.

Value Assessment

Rating: fair

Without comparable contract data or detailed cost breakdowns, assessing the value for money is challenging. The firm-fixed-price structure provides cost certainty, but the sole-source nature means there's no direct benchmark against other offers. The total value of $2.1M over five years for X-ray machine replacement and maintenance appears reasonable on the surface for specialized equipment, but a deeper dive into the scope of work and specific equipment models would be needed for a definitive assessment.

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 typically occurs when a specific capability or product is only available from a single source, or in cases of urgent need. The lack of competition means the government did not benefit from a bidding process that could drive down prices or encourage innovation from multiple vendors. The justification for this sole-source award would need to be reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the most economical price is achieved.

Public Impact

The Federal Aviation Administration (FAA) facilities in North Carolina will benefit from updated and maintained X-ray equipment. This ensures the continued security and operational efficiency of critical aviation infrastructure. The services delivered include the replacement and ongoing maintenance of X-ray machines. The geographic impact is concentrated within North Carolina, supporting regional FAA operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Limited visibility into the specific maintenance and replacement services included in the contract.
No indication of small business subcontracting opportunities.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long contract duration suggests a stable and reliable service provider for essential equipment.
Focus on replacement and maintenance ensures operational continuity for critical FAA functions.

Sector Analysis

The market for specialized security and inspection equipment, such as X-ray machines, is often characterized by a limited number of manufacturers and service providers. Federal agencies like the FAA require highly specific and reliable equipment for security screening. This contract fits within the broader 'Other Measuring and Controlling Device Manufacturing' sector, which can include a range of sophisticated electronic and mechanical devices. Benchmarking spending in this niche requires identifying comparable procurements for similar security equipment across government agencies.

Small Business Impact

This contract was not set aside for small businesses, nor is there an indication of any subcontracting requirements. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. Without a competitive bidding process that includes small business considerations, the direct impact on the small business ecosystem for this particular contract is minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Office of Inspector General and the Federal Aviation Administration's contracting officers. Transparency regarding the justification for the sole-source award and the performance metrics outlined in the contract are key to effective oversight. Regular performance reviews and audits would be necessary to ensure compliance and value for money.

Related Government Programs

FAA Security Equipment Procurements
Department of Transportation Maintenance Contracts
X-ray Machine Manufacturing and Services
Federal Security Screening Technology

Risk Flags

Sole-source award without clear justification.
Potential for non-competitive pricing.
Lack of small business participation.
Limited transparency on specific services and equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $2.1 million to POINT SECURITY INC. X-RAY MACHINE REPLACEMENT AND MAINTENANCE FOR FAA FACILITIES

Who is the contractor on this award?

The obligated recipient is POINT SECURITY INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $2.1 million.

What is the period of performance?

Start: 2021-09-23. End: 2026-09-23.

What is the specific justification provided by the FAA for awarding this contract on a sole-source basis to Point Security Inc.?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Agencies must justify sole-source awards based on specific criteria, such as the availability of only one responsible source, or in certain emergency situations. Without access to the contract's justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise reasons. However, common justifications include unique technical capabilities, proprietary technology, or the need to maintain compatibility with existing systems. The FAA would need to have documented and approved such a justification to proceed with this sole-source award.

How does the total contract value of $2.1 million compare to similar X-ray machine replacement and maintenance contracts for federal agencies?

Directly comparing the $2.1 million value requires access to a database of similar federal contracts, including the specific type and quantity of X-ray machines, the scope of maintenance services, and the contract duration. The provided data indicates a 5-year contract (1826 days) for 'X-RAY MACHINE REPLACEMENT AND MAINTENANCE FOR FAA FACILITIES' in North Carolina. Without knowing the number of machines, their specifications (e.g., size, threat detection capabilities), and the level of maintenance required (e.g., preventative, corrective, parts included), a precise benchmark is difficult. However, for specialized security equipment and long-term maintenance, a total contract value in the low millions over several years is not uncommon for a significant number of units or critical facilities.

What are the potential risks associated with a sole-source contract for critical infrastructure equipment like X-ray machines?

The primary risk of a sole-source contract is the potential for inflated pricing due to the absence of competitive bidding. Without competing offers, the contractor may have less incentive to offer the most cost-effective solution. Additionally, reliance on a single vendor can create risks related to vendor lock-in, where the government becomes dependent on that specific supplier for parts, service, and future upgrades, potentially limiting flexibility and increasing long-term costs. There's also a risk that the vendor might not maintain the highest standards of service or innovation if they perceive no threat of losing the contract to a competitor. Finally, the lack of competition can obscure potential performance issues or inefficiencies that might be revealed through a competitive process.

What is the track record of Point Security Inc. in fulfilling federal contracts, particularly for X-ray machine maintenance and replacement?

Information regarding the track record of Point Security Inc. for fulfilling federal contracts, specifically for X-ray machine maintenance and replacement, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing the company's past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), contract history with federal agencies, and any reported issues or successes. Given this is a sole-source award, it might suggest prior positive experience or a specialized capability that led to this selection. However, without access to performance data, it's difficult to definitively assess their reliability and effectiveness in this specific domain.

How does the firm-fixed-price (FFP) contract type mitigate risks for the FAA in this procurement?

The Firm-Fixed-Price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks related to cost overruns are manageable. In this case, it means Point Security Inc. assumes most of the financial risk. The agreed-upon price will not change regardless of the contractor's actual costs incurred, unless there are changes to the contract's scope (e.g., through a modification). This provides the FAA with cost certainty and predictability, making budgeting easier. It shifts the burden of managing costs and ensuring efficiency onto the contractor, incentivizing them to perform the work within the agreed budget to maximize their profit.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Other Measuring and Controlling Device Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 693KA8-21-R-00015

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5815 NC HWY 8, LEXINGTON, NC, 27292

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,587,756

Exercised Options: $2,112,486

Current Obligation: $2,112,486

Actual Outlays: $1,858,186

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline