DHS Awards $159M for Enterprise Facial License O&M to NEC National Security Systems
Contract Overview
Contract Amount: $15,900,000 ($15.9M)
Contractor: NEC National Security Systems, Inc
Awarding Agency: Department of Homeland Security
Start Date: 2024-09-30
End Date: 2027-09-29
Contract Duration: 1,094 days
Daily Burn Rate: $14.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ENTERPRISE FACIAL LICENSE O&M
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209
State: Virginia Government Spending
Plain-Language Summary
Department of Homeland Security obligated $15.9 million to NEC NATIONAL SECURITY SYSTEMS, INC for work described as: ENTERPRISE FACIAL LICENSE O&M Key points: 1. Significant contract value for ongoing operations and maintenance. 2. Sole-source award raises questions about competition and potential price discovery. 3. Focus on computing infrastructure and data processing services. 4. Long-term contract duration (nearly 3 years) indicates sustained need.
Value Assessment
Rating: questionable
The contract value of $159 million for a 3-year period suggests a substantial investment. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar enterprise facial recognition O&M services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there was no opportunity for vendors to bid against each other.
Taxpayer Impact: The lack of competition for a $159 million contract could lead to suboptimal pricing, potentially increasing the financial burden on taxpayers.
Public Impact
Facial recognition technology has significant privacy implications for the public. The use of this technology by DHS raises questions about its scope and oversight. O&M costs suggest ongoing investment in and reliance on this system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Privacy concerns associated with facial recognition
Positive Signals
- Clear contract award for essential services
- Defined end date for service provision
Sector Analysis
This contract falls under Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services. Spending in this sector is substantial across government, with O&M costs often representing a significant portion of the total lifecycle cost for complex IT systems.
Small Business Impact
The contract was awarded to NEC National Security Systems, Inc. There is no indication of small business participation in this sole-source award, suggesting limited opportunities for small businesses in this specific procurement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the government received fair value. Oversight should focus on the justification for the sole-source award and the ongoing performance monitoring of the contractor.
Related Government Programs
- Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
- Department of Homeland Security Contracting
- Office of Procurement Operations Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of bids.
- Privacy implications of facial recognition technology.
- Dependency on a single vendor for critical infrastructure.
- Need for robust oversight on contract performance and justification.
Tags
computing-infrastructure-providers-data-, department-of-homeland-security, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $15.9 million to NEC NATIONAL SECURITY SYSTEMS, INC. ENTERPRISE FACIAL LICENSE O&M
Who is the contractor on this award?
The obligated recipient is NEC NATIONAL SECURITY SYSTEMS, INC.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (Office of Procurement Operations).
What is the total obligated amount?
The obligated amount is $15.9 million.
What is the period of performance?
Start: 2024-09-30. End: 2027-09-29.
What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one vendor can meet. Agencies must document these reasons thoroughly. To ensure fair pricing, the government might conduct market research, obtain cost breakdowns, or negotiate aggressively, but the absence of competition inherently limits the ability to validate price against market alternatives.
What are the potential risks associated with the long-term maintenance and operation of an enterprise facial recognition system?
Risks include data breaches of sensitive biometric information, system vulnerabilities to cyberattacks, potential for algorithmic bias leading to misidentification, and the erosion of public trust due to privacy concerns. Continuous updates are needed to address evolving threats and maintain accuracy, which can be costly and complex.
How does the ongoing O&M spending on this system align with DHS's overall mission and technological modernization goals?
Ongoing O&M spending indicates a continued reliance on this specific technology. It's crucial to assess if this investment supports DHS's strategic objectives and if the system remains effective and efficient compared to newer or alternative solutions. Without competitive analysis, it's hard to confirm if this is the most cost-effective path forward.
Industry Classification
NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 70RDA124R00000007
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1820 FORT MYER DR STE 400, ARLINGTON, VA, 22209
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $23,850,000
Exercised Options: $15,900,000
Current Obligation: $15,900,000
Actual Outlays: $7,950,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2024-09-30
Current End Date: 2027-09-29
Potential End Date: 2027-09-29 00:00:00
Last Modified: 2025-09-03
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