DHS awards $37.7M for X-ray machine leases, highlighting potential for cost savings in equipment rental

Contract Overview

Contract Amount: $37,706 ($37.7K)

Contractor: Smiths Detection Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2025-01-01

End Date: 2029-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $21/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: X-RAY MACHINE LEASES AT DC0207

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20032

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37,705.68 to SMITHS DETECTION INC. for work described as: X-RAY MACHINE LEASES AT DC0207 Key points: 1. Leasing X-ray machines offers flexibility and avoids large capital outlays, potentially improving value for money. 2. The contract was awarded under full and open competition, suggesting a competitive market for these services. 3. Lease duration of five years indicates a long-term need for this equipment. 4. The firm-fixed-price contract type provides cost certainty for the agency. 5. The contract is for equipment rental, which can be more cost-effective than purchasing for certain operational needs. 6. The geographic location of the District of Columbia may influence pricing due to local market conditions.

Value Assessment

Rating: good

The contract value of $37.7 million over five years for X-ray machine leases appears reasonable given the duration and the nature of the equipment. Benchmarking against similar federal or state contracts for specialized equipment leases would provide a more precise value assessment. The firm-fixed-price structure helps manage cost predictability. Without specific per-unit cost data or detailed comparisons, it's difficult to definitively state if this represents the absolute best value, but it falls within a generally acceptable range for specialized equipment leasing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple vendors were likely invited to bid. This process generally leads to a more competitive environment, encouraging vendors to offer their best pricing and terms to secure the award. The number of bidders is not specified, but the method of competition suggests a healthy market for X-ray machine leasing services.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, ensuring that the government secures services at a competitive rate and avoids overpayment.

Public Impact

The Department of Homeland Security (DHS) will benefit from access to essential X-ray screening equipment. This contract ensures the continued operation of security screening processes, likely at various DHS facilities. The services delivered are critical for maintaining security and safety standards. The primary geographic impact is within the District of Columbia, where the leased equipment will be deployed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for escalating maintenance or service costs over the five-year lease term.
Risk of technological obsolescence if newer, more advanced X-ray technology becomes available during the lease period.
Dependence on a single contractor for essential equipment maintenance and operation.

Positive Signals

Leasing provides flexibility to upgrade equipment at the end of the term, avoiding long-term ownership risks.
Firm-fixed-price contract offers budget certainty for DHS.
Full and open competition suggests a competitive market, likely leading to favorable pricing.

Sector Analysis

The market for commercial and industrial machinery and equipment rental and leasing is diverse, encompassing a wide range of specialized equipment. Within this sector, X-ray machines are critical for security screening in various government and private applications. The spending benchmark for such specialized equipment leases can vary significantly based on technology, capacity, and lease duration. This contract fits within the broader category of government procurement for essential operational assets, where leasing is often considered as an alternative to outright purchase.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. Large businesses are likely the primary awardees for this type of specialized equipment leasing.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified equipment and services. Transparency is generally maintained through federal procurement databases where contract awards are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

DHS Security Equipment Leases
Federal Equipment Rental Contracts
Commercial and Industrial Machinery Leases
Government Security Screening Technology

Risk Flags

Potential for high long-term costs associated with leasing specialized equipment.
Risk of technological obsolescence impacting equipment effectiveness over the lease term.
Dependence on contractor for maintenance and operational readiness of critical security equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37,705.68 to SMITHS DETECTION INC.. X-RAY MACHINE LEASES AT DC0207

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 (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $37,705.68.

What is the period of performance?

Start: 2025-01-01. End: 2029-12-31.

What is the historical spending pattern for X-ray machine leases by the Department of Homeland Security?

Analyzing historical spending for X-ray machine leases by DHS requires access to detailed procurement data over multiple fiscal years. Without specific historical data, it's challenging to establish a precise pattern. However, federal agencies often lease specialized equipment like X-ray machines to maintain operational readiness without incurring the high upfront capital costs of purchasing. Trends may show an increase in leasing due to budget constraints or a preference for technological upgrades. The current $37.7 million award over five years suggests a significant, ongoing need for such equipment within DHS operations, particularly in high-security environments like those found in the District of Columbia.

How does the per-unit cost of these leased X-ray machines compare to market rates for similar equipment?

Determining the exact per-unit cost requires knowing the number of X-ray machines leased under this contract. The total contract value is $37.7 million over five years, averaging approximately $7.54 million per year. If, for example, 100 machines were leased, the average annual cost per machine would be around $75,400, or roughly $206 per day. Market rates for high-end security X-ray machines can range significantly, from tens of thousands to over a hundred thousand dollars annually for lease and maintenance, depending on the model and capabilities. Without the specific quantity and model details, a precise comparison is difficult, but the average annual cost per machine appears to be within a plausible range for sophisticated security equipment.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance under this lease agreement?

Key performance indicators for an X-ray machine lease contract typically focus on equipment availability, uptime, maintenance response times, and adherence to service level agreements (SLAs). For instance, a KPI might be ensuring 98% equipment uptime, meaning the machines are operational and available for use. Another KPI could be a maximum response time of 4 hours for critical maintenance issues. The contract likely specifies penalties for failing to meet these KPIs and may include provisions for equipment replacement if uptime falls below a certain threshold. DHS would monitor these metrics regularly to ensure the contractor is meeting its obligations.

What is the potential risk of technological obsolescence for X-ray machines leased over a five-year period?

The risk of technological obsolescence for X-ray machines leased over a five-year period is moderate. While X-ray technology evolves, significant leaps that render current high-end machines completely obsolete within five years are less common than in fields like computing. However, advancements in imaging resolution, detection capabilities (e.g., for explosives or specific materials), and speed can occur. The primary mitigation for DHS is the lease structure itself; at the end of the five-year term, they have the option to renegotiate for newer technology or different equipment, rather than being locked into owning potentially outdated assets. The firm-fixed-price nature of the lease also means DHS is paying for current technology at a set price, not investing in future, unproven advancements.

How does the competition level (full and open) influence the pricing and terms offered by potential bidders?

A 'full and open competition' environment typically encourages bidders to offer their most competitive pricing and favorable terms to win the contract. Knowing that multiple vendors are vying for the same business incentivizes them to reduce profit margins, offer better service level agreements, or include additional value-added services. This competitive pressure helps ensure that the government is not overpaying for the leased X-ray machines. The specific number of bidders would further refine this analysis; a higher number of bidders generally leads to more intense price competition.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Other Commercial and Industrial Machinery and Equipment Rental and Leasing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $94,264

Exercised Options: $37,706

Current Obligation: $37,706

Actual Outlays: $10,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFP321DEH000001

IDV Type: IDC

Timeline