DHS awards $77.4M for High Energy Rail Systems, with 4 bidders competing

Contract Overview

Contract Amount: $77,434,829 ($77.4M)

Contractor: Smiths Detection Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2020-07-01

End Date: 2029-12-31

Contract Duration: 3,470 days

Daily Burn Rate: $22.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: HIGH ENERGY RAIL SYSTEMS

Place of Performance

Location: ALCOA, BLOUNT County, TENNESSEE, 37701

State: Tennessee Government Spending

Plain-Language Summary

Department of Homeland Security obligated $77.4 million to SMITHS DETECTION INC. for work described as: HIGH ENERGY RAIL SYSTEMS Key points: 1. Contract value of $77.4M over 5.5 years suggests a significant investment in specialized equipment. 2. The contract was awarded under full and open competition, indicating a robust bidding process. 3. With 4 bidders, the competition level appears adequate, potentially leading to reasonable pricing. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. The specialized nature of 'Irradiation Apparatus Manufacturing' suggests a niche market with limited suppliers. 6. Performance is tracked via delivery orders, allowing for phased execution and oversight.

Value Assessment

Rating: good

The total contract value of $77.4M over approximately 5.5 years averages to about $14M annually. Benchmarking this against similar specialized equipment procurements is challenging due to the niche nature of 'Irradiation Apparatus Manufacturing'. However, the presence of 4 bidders in a full and open competition suggests that the pricing is likely competitive and reflects market value for such advanced systems. The firm fixed-price structure further supports value for money by capping the government's financial exposure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Four bidders participated in the competition, indicating a healthy level of interest and a reasonable degree of market availability for this specialized technology. The multiple bids likely contributed to price discovery and ensured that the U.S. Customs and Border Protection received competitive offers.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices and encourages innovation among potential suppliers.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection, enhancing their operational capabilities. The contract will deliver specialized high energy rail systems, likely for security or inspection purposes. The geographic impact is national, supporting border security operations across the United States. Workforce implications may include specialized manufacturing and technical support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term reliance on a limited number of specialized suppliers.
Ensuring ongoing technological relevance and upgrade paths for the delivered systems.
The specialized nature of the equipment may require unique maintenance and training protocols.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Firm fixed-price contract type limits financial risk for the government.
Multiple bidders (4) suggest a reasonably competitive market for this technology.
Delivery order structure allows for phased implementation and performance monitoring.

Sector Analysis

The procurement falls within the 'Irradiation Apparatus Manufacturing' sector, a highly specialized area often linked to defense, security, and industrial processing. This niche market typically involves advanced technology and a limited number of manufacturers capable of producing such complex systems. Comparable spending benchmarks are difficult to establish without more specific details on the system's function, but procurements in advanced detection and inspection technologies can range from tens to hundreds of millions of dollars.

Small Business Impact

There is no indication of a small business set-aside for this contract, and the prime contractor, SMITHS DETECTION INC., is likely a large business. The contract value suggests that subcontracting opportunities for small businesses may exist, particularly in areas supporting manufacturing, logistics, or specialized components. However, the primary focus of this award is on the prime contractor's specialized capabilities.

Oversight & Accountability

Oversight for this contract will be managed by the U.S. Customs and Border Protection, likely through contract officers and technical representatives. The delivery order structure allows for phased oversight of performance, milestones, and deliverables. Transparency is facilitated by the contract award being publicly available. Specific Inspector General jurisdiction would depend on the agency's internal structure and the nature of any potential investigations.

Related Government Programs

Border Security Technology
Customs Enforcement Equipment
Radiation Detection Systems
Specialized Manufacturing Procurements

Risk Flags

Potential for technological obsolescence over the contract duration.
Reliance on specialized manufacturing capabilities may limit future sourcing options.
Long-term sustainment and maintenance planning required.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $77.4 million to SMITHS DETECTION INC.. HIGH ENERGY RAIL SYSTEMS

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 (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $77.4 million.

What is the period of performance?

Start: 2020-07-01. End: 2029-12-31.

What is the specific function and technological capability of the 'HIGH ENERGY RAIL SYSTEMS' being procured?

The provided data indicates the contract is for 'HIGH ENERGY RAIL SYSTEMS' under the North American Industry Classification System (NAICS) code 334517, which pertains to 'Irradiation Apparatus Manufacturing'. While the exact function isn't detailed, this classification suggests the systems likely involve the generation or application of high-energy radiation, potentially for security screening, cargo inspection, or industrial processing. These systems could utilize technologies like linear accelerators or other particle beam devices to detect threats, analyze materials, or modify substances. The 'rail systems' aspect might refer to the method of transport for the radiation source, the target, or the item being processed, implying a need for precise movement and integration within a larger facility.

How does the awarded price of $77.4M compare to similar procurements for advanced security or inspection systems?

Direct comparison of the $77.4M award for 'HIGH ENERGY RAIL SYSTEMS' to similar procurements is challenging without knowing the precise technical specifications and intended use. However, procurements for advanced security and inspection technologies, such as large-scale cargo scanners or sophisticated threat detection systems, often fall within this range or higher. For instance, major airport security upgrades or border surveillance technology contracts can easily reach tens or hundreds of millions of dollars. The fact that this is a firm fixed-price contract awarded under full and open competition with four bidders suggests that the pricing is likely competitive within the specialized market for irradiation apparatus.

What are the key performance indicators (KPIs) and delivery milestones associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or delivery milestones for this contract. However, given that it is a delivery order contract with a firm fixed-price structure, performance is typically measured against the successful delivery of specified equipment and services according to a defined schedule. Milestones would likely be tied to the completion of design, manufacturing, testing, delivery, installation, and acceptance of the 'HIGH ENERGY RAIL SYSTEMS'. The U.S. Customs and Border Protection would establish specific acceptance criteria and performance standards that the contractor must meet for each delivery order to ensure the systems function as intended for their operational needs.

What is the track record of SMITHS DETECTION INC. in delivering complex irradiation apparatus or similar high-technology systems to government agencies?

Smiths Detection Inc. is a well-established company specializing in security and detection technologies, including systems for threat identification and screening. They have a significant track record of supplying advanced equipment to government agencies worldwide, including various U.S. federal agencies involved in homeland security and defense. Their portfolio often includes X-ray scanners, chemical and biological detectors, and other sophisticated screening solutions. While specific details on their past performance with 'HIGH ENERGY RAIL SYSTEMS' are not provided here, their general expertise in complex, high-technology security systems suggests a capable contractor for this type of procurement. Government contract databases would offer more granular performance history.

What are the potential risks associated with the long performance period (ending 2029) for these specialized systems?

The long performance period, extending to December 31, 2029, presents several potential risks. Technological obsolescence is a primary concern; advanced systems can become outdated relatively quickly in rapidly evolving fields. There's also a risk of contractor performance degradation over time, especially if incentives are not structured to maintain high quality throughout the contract duration. Maintenance and sustainment costs could escalate, and ensuring the availability of spare parts and specialized technical support over nearly a decade can be challenging. Furthermore, changes in government requirements or budget priorities could impact the need for or scope of these systems, although the firm fixed-price nature mitigates direct cost increases for the government if requirements remain stable.

How does the competition level (4 bidders) impact the overall value and risk for the government in this procurement?

A competition level of four bidders under a full and open solicitation is generally considered healthy and indicative of a reasonably competitive market for specialized equipment. This level of competition typically provides the government with multiple viable options, fostering price discovery and encouraging bidders to offer their best terms and pricing to secure the contract. It reduces the risk of awarding the contract to a single source with potentially inflated prices or limited innovation. While more bidders could theoretically drive prices lower, four participants suggest that the market is not overly concentrated, balancing competitive pressure with the availability of qualified suppliers for this niche technology. This scenario generally enhances the value for money and reduces the risk of overpayment or inadequate technical solutions.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2202 LAKESIDE BLVD, EDGEWOOD, MD, 21040

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $77,434,829

Exercised Options: $77,434,829

Current Obligation: $77,434,829

Actual Outlays: $22,931,511

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B03C20D00000014

IDV Type: IDC

Timeline