CBP's $24.2M X-Ray System Contract Awarded to Rapiscan Systems Inc. for Port Security

Contract Overview

Contract Amount: $24,207,500 ($24.2M)

Contractor: Rapiscan Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2010-09-24

End Date: 2013-04-30

Contract Duration: 949 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LARGE-SCALE NON-INTRUSIVE INSPECTION HIGH-ENERGY MOBILE X-RAY SYSTEM FOR SELECT PORTS OF ENTRY (POES) OF THE U.S. CUSTOMS AND BORDER PROTECTION (CBP).

Place of Performance

Location: APEX, WAKE County, NORTH CAROLINA, 27539

State: North Carolina Government Spending

Plain-Language Summary

Department of Homeland Security obligated $24.2 million to RAPISCAN SYSTEMS INC for work described as: LARGE-SCALE NON-INTRUSIVE INSPECTION HIGH-ENERGY MOBILE X-RAY SYSTEM FOR SELECT PORTS OF ENTRY (POES) OF THE U.S. CUSTOMS AND BORDER PROTECTION (CBP). Key points: 1. Value for money assessed through fixed-price contract and competition. 2. Competition dynamics indicate a full and open process. 3. Risk indicators include contract duration and fixed-price nature. 4. Performance context is port security and non-intrusive inspection. 5. Sector positioning within defense and security technology. 6. Contract awarded to a single vendor, Rapiscan Systems Inc.

Value Assessment

Rating: good

The contract value of $24.2 million for a high-energy mobile X-ray system appears reasonable given the specialized nature of the equipment and its application in border security. The firm fixed-price contract structure shifts risk to the contractor, which can be beneficial for the government in controlling costs. Benchmarking against similar large-scale inspection system procurements would provide a more precise value assessment, but the initial price seems aligned with the complexity and scale of the technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of four bids indicates a healthy level of interest and competition for this specialized equipment. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competitions.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by driving down prices through market forces. It also promotes innovation by allowing various companies to propose their best solutions.

Public Impact

Enhances U.S. Customs and Border Protection's (CBP) ability to inspect cargo and vehicles at ports of entry. Improves national security by detecting illicit materials and contraband. Benefits the efficiency of trade and travel by enabling faster, non-intrusive inspections. Supports the workforce at ports of entry by providing advanced inspection tools. Geographic impact is focused on select U.S. ports of entry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of 949 days (approx. 2.6 years) may lead to potential obsolescence of technology if not managed proactively.
Reliance on a single vendor for a critical security system could pose long-term supply chain risks.
Fixed-price contracts can sometimes lead to contractor pressure to cut corners on quality if not rigorously overseen.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process.
Award to Rapiscan Systems Inc., a known entity in the security screening market, implies a degree of established capability.

Sector Analysis

The procurement falls within the defense and security sector, specifically focusing on advanced inspection and screening technologies. The market for such systems is characterized by high barriers to entry due to technological complexity and stringent performance requirements. Comparable spending benchmarks would involve other large government procurements for similar security equipment, such as large-scale X-ray scanners for ports, airports, or critical infrastructure.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses and the prime contractor, Rapiscan Systems Inc., is a large entity. There is no explicit information on subcontracting plans for small businesses within this award. Further analysis would be needed to determine if any small business subcontracting opportunities were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Customs and Border Protection (CBP) contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified equipment meeting performance standards. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

CBP Non-Intrusive Inspection Technology
Department of Homeland Security Equipment Procurement
Radiation Detection and Imaging Systems
Port Security Technology
Mobile X-ray Systems

Risk Flags

Potential for technological obsolescence due to contract length.
Single vendor reliance for critical security equipment.
Need for robust performance monitoring and acceptance testing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $24.2 million to RAPISCAN SYSTEMS INC. LARGE-SCALE NON-INTRUSIVE INSPECTION HIGH-ENERGY MOBILE X-RAY SYSTEM FOR SELECT PORTS OF ENTRY (POES) OF THE U.S. CUSTOMS AND BORDER PROTECTION (CBP).

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 $24.2 million.

What is the period of performance?

Start: 2010-09-24. End: 2013-04-30.

What is the track record of Rapiscan Systems Inc. with similar government contracts, particularly for large-scale inspection systems?

Rapiscan Systems Inc. has a significant history of providing security screening solutions to government agencies worldwide, including the U.S. Department of Homeland Security (DHS) and Customs and Border Protection (CBP). They are known for their range of X-ray and other inspection technologies. Past contracts have included systems for cargo scanning, baggage screening, and vehicle inspection. While specific performance details on all past contracts are not always public, their continued presence in the market suggests a generally satisfactory track record. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, necessitating careful review of their contract history for any red flags related to delivery, reliability, or support.

How does the awarded price of $24.2 million compare to market rates for similar high-energy mobile X-ray systems?

Determining an exact market rate comparison for specialized, high-energy mobile X-ray systems is challenging due to the niche nature of the technology and varying configurations. However, the $24.2 million figure for a system intended for port-of-entry use, likely involving advanced imaging capabilities and ruggedized mobile platforms, appears to be within a plausible range for such sophisticated equipment. Factors influencing price include the energy output, imaging resolution, mobility features, software integration, and manufacturer's support package. Without specific technical specifications and a broader market survey of comparable systems procured by other agencies or large commercial entities, a precise benchmark is difficult. The firm fixed-price nature of this contract suggests the government sought cost certainty, and the competitive bidding process aimed to secure the best possible price under those conditions.

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

Key risks include technological obsolescence given the contract duration (949 days), potential performance issues with the specialized equipment, and contractor viability. Mitigation strategies are embedded within the contract structure. The firm fixed-price nature incentivizes the contractor to deliver within budget. Performance standards and acceptance testing protocols are crucial for ensuring the equipment meets CBP's operational needs. The competitive award process itself mitigates the risk of selecting an unqualified vendor. Long-term risks related to maintenance and support would be managed through separate service contracts or warranties, and CBP would likely have contingency plans for system failures or the need for upgrades.

What is the expected effectiveness of these mobile X-ray systems in enhancing port security and trade facilitation?

These high-energy mobile X-ray systems are expected to significantly enhance port security by providing CBP officers with a rapid, non-intrusive means to inspect large volumes of cargo and vehicles. Their mobility allows for flexible deployment at various points within a port, addressing threats such as smuggled weapons, explosives, narcotics, and illicit radioactive materials. By enabling faster screening of containers and trucks, these systems contribute to trade facilitation by reducing inspection bottlenecks and improving the flow of legitimate commerce. The effectiveness is measured by the system's ability to accurately detect anomalies, its operational uptime, and its integration into the overall CBP inspection workflow.

How has federal spending on non-intrusive inspection technology for border security evolved over time?

Federal spending on non-intrusive inspection (NII) technology for border security has seen a substantial and consistent increase, particularly since the events of September 11, 2001. Driven by national security imperatives and the need to manage increasing trade volumes, agencies like CBP have prioritized investments in advanced screening equipment. This includes a range of technologies such as X-ray scanners (mobile and fixed), radiation portal monitors, and automated license plate readers. Funding has been allocated through various appropriations, including those for DHS operations, procurement, and modernization initiatives. The trend reflects a strategic shift towards leveraging technology to enhance border security without unduly impeding the flow of legitimate trade and travel.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: OSI Systems Inc (UEI: 178295812)

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: $24,207,500

Exercised Options: $24,207,500

Current Obligation: $24,207,500

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline