DHS awards $186M for multi-energy portals, with Rapiscan Systems Inc. securing the contract

Contract Overview

Contract Amount: $186,433,309 ($186.4M)

Contractor: Rapiscan Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2021-09-28

End Date: 2028-09-30

Contract Duration: 2,559 days

Daily Burn Rate: $72.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDER IS FOR MULTI - ENERGY PORTALS.

Place of Performance

Location: MISSION, HIDALGO County, TEXAS, 78572

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $186.4 million to RAPISCAN SYSTEMS INC for work described as: THIS DELIVERY ORDER IS FOR MULTI - ENERGY PORTALS. Key points: 1. The contract value of $186.4 million over its period of performance suggests a significant investment in security screening technology. 2. The firm fixed-price contract type indicates that the contractor bears the risk of cost overruns, which can be favorable for the government. 3. The duration of the delivery order (over 7 years) suggests a long-term need for these energy portals. 4. The award to Rapiscan Systems Inc. warrants a review of their past performance and pricing on similar contracts. 5. The 'Irradiation Apparatus Manufacturing' North American Industry Classification System (NAICS) code provides context for the specialized nature of the goods procured. 6. The contract is being performed in Texas, indicating a specific geographic focus for deployment or support.

Value Assessment

Rating: fair

Benchmarking the value of this $186.4 million contract for multi-energy portals is challenging without specific details on the number and capabilities of the portals. However, the firm fixed-price structure is generally a positive indicator for cost control. A comparison to similar procurements for advanced screening technology by agencies like CBP or other homeland security entities would be necessary to assess if the pricing is competitive. The long performance period also means the government is locking in pricing for an extended duration, which could be advantageous or disadvantageous depending on market trends.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 bidders suggests a moderate level of competition for this specialized equipment. While more bidders could potentially drive prices lower, a moderate number can still lead to competitive pricing if the requirements are clearly defined and the market has a reasonable number of capable suppliers.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, leading to potentially better value.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from enhanced capabilities to screen cargo and individuals at ports of entry. The services delivered include the provision of advanced multi-energy portal systems, likely for non-intrusive inspection. The geographic impact is concentrated in Texas, where the contract is being performed, potentially involving installation, maintenance, or operational support. Workforce implications may include specialized technical roles for installation, operation, and maintenance of the energy portal systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration (over 7 years) could lead to technological obsolescence if not managed proactively.
Reliance on a single contractor for a critical security function over an extended period may pose supply chain risks.
The specific capabilities and performance metrics of the 'multi-energy portals' are not detailed, making it difficult to assess their effectiveness.
Potential for cost increases if the firm fixed-price contract does not adequately account for inflation or unforeseen technical challenges.

Positive Signals

The award was made under full and open competition, suggesting a competitive process that likely yielded a reasonable price.
The firm fixed-price contract type shifts cost overrun risk to the contractor, which is favorable for the government.
The contract is for 'multi-energy portals,' indicating advanced technology procurement aimed at improving security screening.
The contractor, Rapiscan Systems Inc., is a known entity in the security screening market, suggesting some level of established expertise.

Sector Analysis

The procurement of multi-energy portals falls within the broader security and defense technology sector, specifically related to inspection and screening equipment. This market is characterized by high technological barriers to entry and significant government spending driven by national security needs. Comparable spending benchmarks would involve looking at other large-scale procurements for advanced X-ray, radiation, or other non-intrusive inspection systems by agencies like CBP, TSA, or international security organizations. The market size for such specialized equipment is substantial, driven by evolving threats and the need for efficient, effective screening solutions.

Small Business Impact

There is no indication in the provided data that this contract includes a small business set-aside. Given the specialized nature and significant value of multi-energy portals, it is likely that large, established defense contractors or specialized technology firms are the primary participants. Subcontracting opportunities for small businesses may exist in areas such as component manufacturing, logistics, or specialized support services, but these are not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security, specifically U.S. Customs and Border Protection. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified goods within the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS.gov. The Inspector General for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

CBP Cargo Screening
Non-Intrusive Inspection Systems
Radiation Detection Equipment
Advanced X-ray Scanners
Homeland Security Technology Procurements

Risk Flags

Long contract duration may lead to technological obsolescence.
Firm Fixed Price on a long-term, complex system requires careful monitoring for potential quality compromises.
Limited competition (3 bidders) may reduce price discovery compared to a larger pool.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $186.4 million to RAPISCAN SYSTEMS INC. THIS DELIVERY ORDER IS FOR MULTI - ENERGY PORTALS.

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 $186.4 million.

What is the period of performance?

Start: 2021-09-28. End: 2028-09-30.

What is the specific technical capability and performance standard of the 'multi-energy portals' being procured?

The provided data does not specify the exact technical capabilities or performance standards of the 'multi-energy portals.' However, the term 'multi-energy' typically refers to systems that utilize different energy levels (e.g., low and high energy X-rays) to penetrate objects and differentiate between materials based on their density and atomic number. This allows for more effective detection of contraband, explosives, and other illicit items. For U.S. Customs and Border Protection, these portals are likely intended for non-intrusive inspection of cargo and vehicles at ports of entry, aiming to enhance security and facilitate trade by improving detection rates and inspection efficiency. Detailed specifications would normally be found in the original solicitation documents.

How does the $186.4 million contract value compare to historical spending on similar security screening technologies by DHS or CBP?

Comparing the $186.4 million contract value requires an understanding of the scope and duration. This delivery order spans over seven years, suggesting a substantial investment in acquiring and potentially maintaining a fleet of multi-energy portals. Historical spending on similar large-scale procurements for advanced inspection systems by DHS and CBP can vary significantly based on technological advancements, threat landscapes, and agency priorities. For instance, major procurements for cargo scanning systems have historically run into hundreds of millions of dollars over several years. To provide a precise comparison, one would need to analyze specific past contracts for comparable technologies (e.g., advanced X-ray, gamma-ray, or other non-intrusive inspection systems) awarded by CBP or other relevant agencies, considering the number of units, their capabilities, and the contract duration. Without such detailed comparative data, it's difficult to definitively state if $186.4 million represents a high, low, or average investment.

What is Rapiscan Systems Inc.'s track record with DHS and other federal agencies for delivering similar security screening equipment?

Rapiscan Systems Inc. is a known provider of security screening solutions, including X-ray inspection systems, for various government agencies. Their track record with the Department of Homeland Security (DHS) and specifically U.S. Customs and Border Protection (CBP) would likely include previous awards for inspection equipment. A thorough review would involve examining past contract performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and the overall history of successful delivery of similar technologies. Agencies typically award significant contracts to companies with a demonstrated ability to meet stringent technical requirements, delivery schedules, and performance standards. Information on Rapiscan's specific past performance on DHS contracts would be available through federal procurement databases and performance reporting systems.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

While firm fixed-price (FFP) contracts are generally favored for cost control as they shift risk to the contractor, a contract of this magnitude ($186.4 million) and duration (over 7 years) presents specific risks. One primary risk is that the contractor may face unforeseen cost increases due to inflation, material price volatility, or technological advancements that necessitate upgrades not fully anticipated in the original pricing. If the FFP terms are too rigid, the contractor might be incentivized to cut corners on quality or service to maintain profitability, potentially impacting the effectiveness of the security portals. Furthermore, over a long period, the technology itself could become outdated, requiring costly modifications or replacements outside the scope of the original contract. Ensuring robust contract management and clear performance metrics is crucial to mitigate these risks and ensure the government receives the intended value throughout the contract's life.

How does the competition level (3 bidders) impact the potential value for taxpayers on this contract?

A competition level with 3 bidders suggests a moderate degree of market interest and capability for this specialized procurement. While more bidders could theoretically lead to lower prices, three capable bidders often provide sufficient competitive pressure to ensure reasonable pricing and encourage innovation. If these three bidders were all highly qualified and actively competed, taxpayers likely benefited from a price that reflects market conditions for advanced security screening technology. However, if the market for such specialized 'multi-energy portals' is inherently limited to only a few major players, the competition might be less intense than in broader markets. Analyzing the specific capabilities and pricing strategies of each of the three bidders would be necessary to fully assess the value realized by taxpayers.

What are the implications of the contract being performed in Texas (ST: TX, SN: TEXAS)?

The indication that the contract is performed in Texas (ST: TX, SN: TEXAS) suggests that the primary location for the manufacturing, assembly, installation, or ongoing support of these multi-energy portals is within the state. This could mean that Rapiscan Systems Inc. has significant operations or facilities in Texas, or that the initial deployment and setup of the equipment will occur there. For taxpayers, this might imply economic benefits within Texas through job creation and business activity related to the contract. It also means that oversight and performance monitoring might be more directly focused on activities within that geographic region. The specific nature of the 'performance' (e.g., manufacturing vs. installation vs. maintenance) would further clarify the impact.

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: $186,433,309

Exercised Options: $186,433,309

Current Obligation: $186,433,309

Actual Outlays: $132,644,057

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70B03C21D00000003

IDV Type: IDC

Timeline