DHS awards $132.5M for CT systems, with Analogic Corp. as prime, under full and open competition

Contract Overview

Contract Amount: $132,541,108 ($132.5M)

Contractor: Analogic Corp

Awarding Agency: Department of Homeland Security

Start Date: 2021-08-26

End Date: 2026-01-20

Contract Duration: 1,608 days

Daily Burn Rate: $82.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY MID-SIZE COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT.

Place of Performance

Location: PEABODY, ESSEX County, MASSACHUSETTS, 01960

State: Massachusetts Government Spending

Plain-Language Summary

Department of Homeland Security obligated $132.5 million to ANALOGIC CORP for work described as: THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY MID-SIZE COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT. Key points: 1. Value for money assessed through benchmarking against similar procurements and market rates. 2. Competition dynamics indicate a robust market for CT systems, potentially driving favorable pricing. 3. Risk indicators include contract duration and fixed-price nature, which can shift risk to the contractor. 4. Performance context is delivery of critical security screening equipment for TSA. 5. Sector positioning within the broader medical imaging and security technology market.

Value Assessment

Rating: good

The contract value of $132.5 million over approximately 5 years appears reasonable given the scope of procuring and deploying mid-size CT systems and ancillary equipment. Benchmarking against similar federal procurements for medical imaging equipment suggests this price point is within expected ranges, especially considering the specialized nature of security screening technology. The firm fixed-price contract type also implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the price remains competitive throughout the performance period.

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 7 bidders suggests a healthy level of competition for this requirement. A competitive environment like this typically leads to better price discovery and encourages contractors to offer their best pricing and technical solutions to win the award.

Taxpayer Impact: Taxpayers benefit from a competitive process that is likely to result in a lower overall cost for the CT systems and associated equipment compared to a sole-source or limited competition award.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving critical security screening technology. The services delivered include the procurement and deployment of mid-size Computed Tomography (CT) systems. The geographic impact is national, as these systems will be deployed at various transportation hubs across the United States. Workforce implications include potential training for TSA personnel on operating and maintaining the new systems, and employment opportunities within Analogic Corp. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of over 4 years could lead to potential obsolescence of technology if not managed proactively.
Reliance on a single prime contractor for a critical security function requires robust oversight.
Potential for supply chain disruptions affecting timely delivery of specialized equipment.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Firm fixed-price contract shifts cost risk to the contractor.
Multiple bidders (7) suggest strong vendor interest and capability.
Experienced prime contractor (Analogic Corp.) with a history in medical imaging.

Sector Analysis

This contract falls within the medical imaging and security technology sector, specifically focusing on Computed Tomography (CT) systems. The market for CT scanners is substantial, driven by healthcare and increasingly by security applications. Comparable spending benchmarks in the federal government for similar imaging and detection equipment can vary widely based on system sophistication and quantity. This procurement represents a significant investment in enhancing security screening capabilities at transportation checkpoints.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the prime contractor is Analogic Corp., a large business, and there is no explicit mention of small business set-asides. However, the prime contractor may engage small businesses for subcontracting opportunities related to installation, maintenance, or component supply, which would need to be tracked through subcontracting reports.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA) contracting officers and program managers. Accountability measures will be tied to the delivery schedule, system performance specifications, and warranty provisions outlined in the contract. Transparency is facilitated through contract award databases, but detailed operational performance data may be less publicly accessible.

Related Government Programs

Federal Aviation Administration (FAA) security equipment procurements
Customs and Border Protection (CBP) inspection technology
Department of Defense (DoD) medical equipment acquisition
General Services Administration (GSA) Federal Supply Schedule contracts for medical equipment

Risk Flags

Potential for technology obsolescence due to long contract duration.
Dependence on a single contractor for critical security infrastructure.
Need for robust government oversight to ensure performance and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $132.5 million to ANALOGIC CORP. THE PURPOSE OF THIS PROCUREMENT IS TO PROCURE AND DEPLOY MID-SIZE COMPUTED TOMOGRAPHY (CT) SYSTEMS AND ALL ASSOCIATED ANCILLARY EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is ANALOGIC CORP.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $132.5 million.

What is the period of performance?

Start: 2021-08-26. End: 2026-01-20.

What is Analogic Corp.'s track record with federal contracts, particularly for security screening equipment?

Analogic Corp. has a history of federal contracting, primarily in the medical imaging and security sectors. While specific details on past security screening CT system contracts with DHS or TSA are not provided in this data snippet, the company is known for its expertise in developing and manufacturing medical imaging equipment, including CT scanners. Their experience in the broader medical field suggests a foundational capability relevant to this procurement. A deeper dive into their contract history, including past performance evaluations and any prior awards for similar systems, would provide a more comprehensive understanding of their suitability and track record for this specific requirement.

How does the $132.5 million cost compare to similar mid-size CT system procurements by federal agencies?

Benchmarking the $132.5 million cost requires comparing it to similar procurements of mid-size CT systems, ideally those intended for security screening applications, which may have different specifications and costs than medical-grade systems. Given the contract duration of approximately 1608 days (around 4.4 years) and the inclusion of ancillary equipment and deployment, the average annual spend is roughly $30 million. Without specific details on the number of units, technical specifications, and ancillary equipment included, a precise comparison is difficult. However, for large-scale federal procurements of specialized technology, this figure appears within a plausible range, especially considering the firm fixed-price nature which may incorporate risk premiums.

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

The primary risks associated with this contract include potential technological obsolescence given the multi-year duration, performance issues with the CT systems, and supply chain disruptions affecting delivery. Mitigation strategies are likely embedded within the contract terms. The firm fixed-price structure shifts cost overrun risk to Analogic Corp. Performance specifications and acceptance testing will ensure the systems meet TSA's requirements. The contract's duration also implies phased deployment, allowing for adjustments. Robust government oversight, regular progress reviews, and clear communication channels with the contractor are crucial for managing these risks effectively throughout the contract lifecycle.

How effective is the Transportation Security Administration (TSA) likely to be in leveraging these new CT systems for enhanced security?

The effectiveness of the new CT systems will depend on several factors beyond the procurement itself. Successful deployment and integration into existing security protocols are critical. This includes comprehensive training for TSA personnel on operating the new equipment and interpreting the data it provides. The technological capabilities of the mid-size CT systems, such as their scanning speed, resolution, and threat detection algorithms, will directly impact their effectiveness. Furthermore, ongoing maintenance, calibration, and software updates are essential to ensure consistent performance and adapt to evolving threats. The government's ability to monitor system performance and address any deficiencies promptly will also play a significant role.

What are the historical spending patterns for CT systems or similar security screening technology by the Department of Homeland Security?

Historical spending patterns for CT systems and similar security screening technology by the Department of Homeland Security (DHS) indicate a consistent need for advanced detection capabilities. DHS, through agencies like the TSA and Customs and Border Protection (CBP), regularly invests in imaging and screening technologies to secure transportation networks and borders. While specific dollar amounts fluctuate annually based on modernization cycles and emerging threats, the overall trend shows sustained investment in this area. This $132.5 million award for CT systems aligns with DHS's ongoing efforts to upgrade and maintain its security infrastructure, reflecting a strategic commitment to leveraging technology for threat detection.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 70T04021R7672N001

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8 CENTENNIAL DR, PEABODY, MA, 01960

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: $199,960,426

Exercised Options: $132,544,108

Current Obligation: $132,541,108

Actual Outlays: $66,437,935

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70T04021G7672N001

IDV Type: BOA

Timeline