Homeland Security awards $12.16M for irradiation apparatus, with 3 bidders competing

Contract Overview

Contract Amount: $12,164,172 ($12.2M)

Contractor: Rapiscan Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2021-03-01

End Date: 2026-12-31

Contract Duration: 2,131 days

Daily Burn Rate: $5.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS DELIVERY ORDER IS ISSUED AGAINST THE INDEFINITE DELIVERY, INDEFINITE QUANTITY CONTRACT 70B03C21D00000004.THIS ORDER SATISFIES THE MINIMUM BUY REQUIREMENT- 1 MULTI ENERGY PORTAL.

Place of Performance

Location: SAN LUIS, YUMA County, ARIZONA, 85349

State: Arizona Government Spending

Plain-Language Summary

Department of Homeland Security obligated $12.2 million to RAPISCAN SYSTEMS INC for work described as: THIS DELIVERY ORDER IS ISSUED AGAINST THE INDEFINITE DELIVERY, INDEFINITE QUANTITY CONTRACT 70B03C21D00000004.THIS ORDER SATISFIES THE MINIMUM BUY REQUIREMENT- 1 MULTI ENERGY PORTAL. Key points: 1. The contract value represents a significant investment in specialized equipment for border security operations. 2. Competition dynamics suggest a healthy market for this type of technology, potentially driving competitive pricing. 3. The firm-fixed-price contract type shifts performance risk to the contractor. 4. The duration of the order extends over five years, indicating a long-term need for the equipment. 5. The contract is a delivery order against a larger IDIQ, suggesting it's part of a broader procurement strategy. 6. The equipment is manufactured in Arizona, potentially impacting local industry and workforce.

Value Assessment

Rating: good

The awarded amount of $12.16 million for irradiation apparatus appears reasonable given the specialized nature of the equipment and the five-year performance period. Benchmarking against similar contracts for advanced screening technology is challenging due to the niche market, but the presence of multiple bidders suggests the pricing is within a competitive range. The firm-fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders participating. The level of competition indicates that multiple vendors were capable of meeting the government's requirements for irradiation apparatus. This suggests a reasonably competitive market for this technology, which generally benefits price discovery and can lead to more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by allowing the government to select the best value from a range of qualified offerors, rather than being limited to a single source.

Public Impact

U.S. Customs and Border Protection benefits from enhanced screening capabilities at the border. The services delivered include the provision and potential maintenance of irradiation apparatus, crucial for detecting illicit materials. The geographic impact is primarily at U.S. borders, specifically in Arizona where the equipment is manufactured. Workforce implications may include specialized manufacturing jobs in Arizona and operational roles for CBP personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of technology over the five-year contract duration.
Dependence on a single manufacturer for specialized components could pose supply chain risks.
Ensuring adequate training for personnel operating and maintaining complex irradiation equipment.

Positive Signals

Firm-fixed-price contract limits cost overrun risks for the government.
Delivery order against an IDIQ provides flexibility for future needs within the same contract vehicle.
Competition among three bidders suggests a robust market and potential for innovation.

Sector Analysis

The contract falls within the Irradiation Apparatus Manufacturing sector, a niche within the broader industrial equipment market. This sector is characterized by high technological barriers to entry and specialized applications, often serving government and security-related industries. The market size for such specialized equipment is relatively small compared to general manufacturing, but critical for specific national security functions. This contract represents a significant procurement within this specialized area for the Department of Homeland Security.

Small Business Impact

The provided data indicates that small business participation was not a primary focus for this specific delivery order, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided details. This suggests that the primary contractor, Rapiscan Systems Inc., likely has the capacity to fulfill the requirement directly or through larger partners, with potential limited direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract is managed by the Department of Homeland Security, specifically U.S. Customs and Border Protection. As a delivery order against an IDIQ, oversight is likely integrated into the broader management of the parent contract. Accountability measures are embedded in the firm-fixed-price terms, requiring the contractor to deliver specified equipment. Transparency is facilitated by the contract's public availability, though specific performance metrics and operational details may be internal.

Related Government Programs

Homeland Security IDIQ Contracts
Customs and Border Protection Equipment Procurements
Irradiation and Detection Systems
National Security Technology Manufacturing

Risk Flags

Potential for technological obsolescence
Supply chain dependency for specialized components
Long-term maintenance and operational support needs
Ensuring adequate training for complex equipment

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $12.2 million to RAPISCAN SYSTEMS INC. THIS DELIVERY ORDER IS ISSUED AGAINST THE INDEFINITE DELIVERY, INDEFINITE QUANTITY CONTRACT 70B03C21D00000004.THIS ORDER SATISFIES THE MINIMUM BUY REQUIREMENT- 1 MULTI ENERGY PORTAL.

Who is the contractor on this award?

The obligated recipient is RAPISCAN SYSTEMS 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 $12.2 million.

What is the period of performance?

Start: 2021-03-01. End: 2026-12-31.

What is the track record of Rapiscan Systems Inc. with government contracts, particularly within DHS?

Rapiscan Systems Inc. has a significant history of contracting with various U.S. government agencies, including the Department of Homeland Security (DHS). Their contract portfolio often includes advanced security screening technologies, such as X-ray and radiation detection systems, which are critical for border security and law enforcement. Analyzing their past performance on similar contracts, including on-time delivery, quality of goods, and adherence to budget, would provide further insight into their reliability. Past performance reviews and any documented issues or commendations on previous DHS contracts would be crucial for a comprehensive assessment of their track record.

How does the $12.16 million cost compare to similar irradiation apparatus procurements by other federal agencies?

Benchmarking the $12.16 million cost requires identifying comparable procurements for irradiation apparatus, which can be challenging due to the specialized nature of the equipment. Factors such as technical specifications, quantity, manufacturer, and contract duration significantly influence pricing. A preliminary comparison suggests that this award is within a reasonable range for advanced security screening technology, especially considering the five-year performance period and the firm-fixed-price structure. However, a detailed analysis would involve comparing specific technical capabilities, unit costs, and total contract values of similar systems procured by agencies like the Department of Defense or the Department of Energy for their respective security and research needs.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential technological obsolescence over the five-year contract duration, as advancements in irradiation technology could outpace the procured systems. Performance risks, such as delays in delivery or equipment malfunctions, are mitigated by the firm-fixed-price contract type, which incentivizes the contractor to meet specifications and deadlines. Supply chain disruptions for specialized components could also pose a risk, though the presence of multiple bidders might suggest alternative sourcing options. The government's mitigation strategy likely involves robust contract management, performance monitoring, and potentially incorporating clauses for upgrades or maintenance support.

How effective is the competition level (3 bidders) in ensuring value for taxpayer money?

A competition level of three bidders is generally considered healthy and indicative of a reasonably competitive market for specialized equipment like irradiation apparatus. This number suggests that multiple capable vendors exist, allowing the government to solicit and evaluate diverse proposals. The competition likely drives price discovery, pushing offerors to provide competitive bids to secure the contract. While more bidders could theoretically lead to even lower prices, three participants often strike a balance between robust competition and the administrative burden of managing a larger solicitation process. The government's ability to select the 'best value' among these three is crucial for ensuring taxpayer value.

What is the historical spending trend for irradiation apparatus by DHS or similar agencies?

Historical spending on irradiation apparatus by DHS and related agencies has likely shown a steady or increasing trend, driven by evolving security threats and the need for advanced detection capabilities at ports of entry and critical infrastructure. Specific data on annual spending for this category would require a deeper dive into federal procurement databases. However, it's reasonable to infer that investments in such technologies are prioritized due to their critical role in national security. Fluctuations in spending may correlate with technological advancements, changes in threat assessments, and budget allocations within the Department of Homeland Security.

What are the implications of the 'Irradiation Apparatus Manufacturing' (NAICS 334517) classification for this contract?

The NAICS code 334517, 'Irradiation Apparatus Manufacturing,' specifically classifies the industry involved in producing equipment that uses ionizing radiation for various purposes, including sterilization, medical treatment, and industrial processing. For this contract, it signifies that the procured items are highly specialized manufactured goods. This classification helps in understanding the industrial sector involved, potential market size, and the types of companies that would typically bid on such requirements. It also aids in benchmarking against other procurements within this specific manufacturing niche.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: OSI Systems, Inc.

Address: 2805 COLUMBIA ST, TORRANCE, CA, 90503

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: $14,498,136

Exercised Options: $12,164,172

Current Obligation: $12,164,172

Actual Outlays: $11,112,170

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B03C21D00000003

IDV Type: IDC

Timeline