DHS awarded $33.7M for EDS equipment maintenance, primarily to Smiths Detection, Inc., with limited competition

Contract Overview

Contract Amount: $33,772,634 ($33.8M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2005-03-22

End Date: 2010-09-21

Contract Duration: 2,009 days

Daily Burn Rate: $16.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE)

Sector: Other

Official Description: PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT

Place of Performance

Location: NEWARK, ALAMEDA County, CALIFORNIA, 94560

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $33.8 million to SMITHS DETECTION, INC for work described as: PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT Key points: 1. The contract value of $33.7M over its period of performance suggests a significant investment in maintaining critical security infrastructure. 2. The sole-source nature of this award raises questions about potential overpayment and the lack of competitive pressure to reduce costs. 3. The long duration of the contract (over 5 years) could indicate a stable, long-term need for these services. 4. The absence of small business set-asides suggests the primary contractor is a large entity, with potential implications for subcontracting opportunities. 5. The contract's focus on preventive and corrective maintenance highlights the importance of operational readiness for EDS equipment. 6. The specific NAICS code 561621 points to a specialized service within the security systems sector.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific details on the scope of work and the number of EDS units covered. However, the $33.7 million award over approximately five years, awarded on a sole-source basis, suggests a potentially higher cost than if it had been competitively bid. Without comparative data on similar maintenance contracts for EDS equipment, it's difficult to definitively assess value for money. The lack of competition is a significant indicator that the pricing may not reflect the most economical market rate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Smiths Detection, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no opportunity for price discovery through market forces, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive bidding. The government did not leverage the potential for cost savings that typically arises from a competitive procurement process.

Public Impact

The Transportation Security Administration (TSA) benefits from the continued operational readiness of its Explosive Detection Systems (EDS) equipment. Passengers and the general public benefit from enhanced security screening at airports and other transportation hubs. The contract supports the maintenance of critical infrastructure essential for national security. The primary beneficiary is Smiths Detection, Inc., through a significant contract award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification process.
Long-term contract duration without re-competition could lead to complacency or reduced innovation.
Potential for vendor lock-in due to specialized nature of EDS equipment maintenance.
No clear indication of small business subcontracting goals or achievements.

Positive Signals

Ensures continued operational readiness of vital security equipment.
Provides specialized maintenance services critical for national security.
Long-term contract suggests a stable and reliable service provider.
Smiths Detection, Inc. is a recognized leader in security technology.

Sector Analysis

The contract falls within the Security Systems Services sector, specifically focusing on the maintenance of specialized equipment like Explosive Detection Systems (EDS). This is a critical niche within the broader security and defense industry. The market for such specialized maintenance is often dominated by a few key manufacturers or service providers who possess the proprietary knowledge and parts necessary for upkeep. Government spending in this area is driven by national security requirements and the need to maintain operational capabilities at transportation hubs and other sensitive locations.

Small Business Impact

The contract data indicates that this was not set aside for small businesses, and the 'sb' field is false. This suggests that the primary award went to a large corporation, likely Smiths Detection, Inc. Without specific subcontracting plans or reporting, it is difficult to assess the extent to which small businesses may have been involved as subcontractors. The absence of a small business set-aside implies that opportunities for small businesses to directly compete for this large-scale maintenance contract were limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA). As a sole-source award, the justification and approval process would be subject to specific federal acquisition regulations and potentially internal DHS oversight. Transparency regarding the specific reasons for the sole-source award and the performance metrics would be key to assessing accountability. Inspector General reviews could be initiated if performance issues or concerns about the procurement process arise.

Related Government Programs

Homeland Security Contracts
Transportation Security Administration Procurements
Security Equipment Maintenance
Sole Source Contracts
Federal IT and Security Services

Risk Flags

Sole Source Award
Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $33.8 million to SMITHS DETECTION, INC. PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $33.8 million.

What is the period of performance?

Start: 2005-03-22. End: 2010-09-21.

What specific EDS equipment models are covered under this maintenance contract, and what is the total number of units being serviced?

The provided data does not specify the exact models of Explosive Detection Systems (EDS) equipment covered by this contract, nor does it state the total number of units being serviced. This information is crucial for a comprehensive understanding of the contract's scope and for accurately benchmarking its value. Without these details, it is difficult to determine if the $33.7 million award represents a fair price per unit or per service hour. Further analysis would require access to the contract's statement of work (SOW) or related documentation that details the equipment inventory and service level agreements.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data indicates this contract was awarded as 'NOT COMPETED' (sole-source). Federal regulations typically require justification for sole-source awards, often citing reasons such as the unique capability of a single provider, urgent and compelling needs, or specific statutory authority. For this contract, the justification likely stems from Smiths Detection, Inc. being the original manufacturer or sole authorized service provider for the specific EDS equipment used by the TSA. This proprietary relationship often limits the ability of other companies to provide maintenance, thus necessitating a sole-source award to ensure continued operational support and access to specialized parts and expertise.

How does the per-unit maintenance cost under this contract compare to industry benchmarks or previous contracts for similar EDS equipment?

The provided data does not include per-unit maintenance costs or allow for direct comparison to industry benchmarks or previous contracts. The total award of $33.7 million over approximately five years is the primary financial figure available. To perform a per-unit cost analysis, we would need to know the number and type of EDS units maintained, as well as the specific services included (e.g., preventive vs. corrective, response times). Without this granular data, any comparison would be speculative. Given the sole-source nature, it is plausible that the per-unit cost might be higher than in a competitive environment.

What is the track record of Smiths Detection, Inc. in fulfilling similar maintenance contracts for government agencies?

Smiths Detection, Inc. is a well-established company specializing in security screening technology, including EDS. They are a significant provider to government agencies, particularly in the aviation security sector. While this specific contract award data doesn't detail their performance history, the company's longevity and continued awards suggest a generally satisfactory track record in delivering security solutions and maintenance. However, a deeper dive into past performance reviews, contract termination data, and any documented issues on previous DHS or TSA contracts would be necessary for a thorough assessment of their track record.

What are the potential risks associated with a long-term, sole-source maintenance contract for critical security equipment?

Long-term, sole-source contracts for critical security equipment carry several risks. Firstly, the lack of competition can lead to inflated prices and reduced value for money over time, as the government lacks leverage to negotiate better terms. Secondly, there's a risk of vendor lock-in, where the government becomes overly dependent on a single provider, making it difficult and costly to switch vendors even if performance declines or better alternatives emerge. Thirdly, without competitive pressure, the vendor may have less incentive to innovate or improve service quality. Finally, sole-source awards can sometimes raise concerns about transparency and fairness in the procurement process.

How has federal spending on EDS equipment maintenance evolved over the years, and does this contract represent a significant portion of that spending?

The provided data focuses on a single contract award from 2005-2010. To understand the evolution of federal spending on EDS maintenance, a broader analysis of historical contract data across multiple agencies (like DHS, TSA, and potentially others) and over a longer period would be required. This single contract, valued at $33.7 million, represents a substantial investment for its duration. However, without comparative data on total federal spending for EDS maintenance across different fiscal years and agencies, it's impossible to definitively state whether this contract represents a significant portion of the overall historical spending trend.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Systems Services (except Locksmiths)

Product/Service Code: ALARM, SIGNAL, SECURITY DETECTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COMBINATION (TWO OR MORE) (2)

Evaluated Preference: NONE

Contractor Details

Parent Company: Safran Power USA LLC (UEI: 275374015)

Address: 7151 GATEWAY BLVD, NEWARK, CA, 17

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $349,124,442

Exercised Options: $349,124,442

Current Obligation: $33,772,634

Parent Contract

Parent Award PIID: HSTS0405DDEP008

IDV Type: IDC

Timeline