DHS awarded $28.4M for equipment maintenance, but competition was limited, raising value concerns

Contract Overview

Contract Amount: $28,409,157 ($28.4M)

Contractor: Smiths Detection, Inc

Awarding Agency: Department of Homeland Security

Start Date: 2005-09-22

End Date: 2010-09-21

Contract Duration: 1,825 days

Daily Burn Rate: $15.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: ORDER DEPENDENT (IDV ONLY)

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 $28.4 million to SMITHS DETECTION, INC for work described as: PREVENTIVE AND CORRECTIVE MAINTENANCE TO EDS EQUIPMENT Key points: 1. The contract value of $28.4 million over five years for preventive and corrective maintenance of EDS equipment appears high. 2. Limited competition for this contract may have led to suboptimal pricing and reduced value for taxpayers. 3. The lack of a competitive bidding process increases the risk of inflated costs and potentially lower service quality. 4. This contract falls within the Security Systems Services sector, which requires specialized expertise. 5. The extended duration of the contract (5 years) warrants close monitoring of performance and cost-effectiveness.

Value Assessment

Rating: questionable

The total award of $28.4 million for five years of maintenance services for EDS equipment suggests a significant annual cost. Without comparable contract data or detailed service breakdowns, it is difficult to definitively benchmark the value. However, given the lack of competition, there is a strong possibility that the pricing is not as competitive as it could be, potentially leading to a lower value for money compared to a fully competed contract. The per-unit cost is not readily available for direct comparison.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Smiths Detection, Inc., was considered. This severely limits the opportunity for price discovery and competition. Without multiple bids, the government cannot be assured it is receiving the most cost-effective solution. The rationale for a sole-source award, if any, is not provided, but it typically implies a unique capability or urgent need that cannot be met by other sources.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as the absence of competition removes the incentive for the contractor to offer the lowest possible price.

Public Impact

The Transportation Security Administration (TSA) benefits from this contract through the maintenance of Explosive Detection Systems (EDS). This ensures the operational readiness of critical security equipment at airports and other transportation hubs. The services delivered are essential for maintaining national security and public safety in transportation. The contract's impact is primarily national, supporting the security infrastructure across the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award raises concerns about price reasonableness and value for money.
Potential for complacency in service quality due to absence of competitive pressure.
Extended contract duration without re-competition limits future cost-saving opportunities.

Positive Signals

Ensures continued operational capability of essential security equipment.
Provides specialized maintenance services critical for national security.
Contract awarded to a known entity, potentially reducing initial onboarding risks.

Sector Analysis

This contract falls under the Security Systems Services (except Locksmiths) industry, specifically NAICS code 561621. This sector involves the provision of security system services, including installation, maintenance, and repair. The market for such services is often characterized by specialized technical expertise and proprietary technologies, which can sometimes lead to limited competition. The total federal spending in this category can be substantial, supporting critical infrastructure and national security functions across various agencies.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors or through subcontracting were likely minimal. This contract does not appear to actively contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security and the Transportation Security Administration. Specific oversight mechanisms, such as performance reviews, audits, and inspector general investigations, would be crucial given the sole-source nature and significant value. Transparency regarding the justification for the sole-source award and ongoing performance metrics would be key accountability measures.

Related Government Programs

Homeland Security Contracts
Transportation Security Administration Contracts
Equipment Maintenance Services
Security Systems Services

Risk Flags

Sole-source award
Potential for overpricing
Lack of transparency in justification
Limited oversight visibility without performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $28.4 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 $28.4 million.

What is the period of performance?

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

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded to 'SMITHS DETECTION, INC.' on a sole-source basis. Without further documentation or context from the awarding agency (Department of Homeland Security, Transportation Security Administration), the specific justification remains unknown. Typically, sole-source awards are justified by factors such as the existence of only one responsible source capable of providing the required service, urgent and compelling circumstances, or when the service is a follow-on to a previously competed contract where only one contractor can provide the necessary compatibility or integration. The lack of competition here raises concerns about whether these criteria were met or if alternative competitive strategies were overlooked.

How does the annual cost of this contract compare to industry benchmarks for similar EDS equipment maintenance?

The total contract value is $28.4 million over 1825 days (5 years), equating to approximately $5.68 million per year. Benchmarking this against industry standards for Preventive and Corrective Maintenance (PCM) of Explosive Detection Systems (EDS) is challenging without specific details on the type and quantity of EDS equipment covered, the scope of services (e.g., response times, parts included), and the geographic coverage. However, given the sole-source nature, it is plausible that this annual cost is higher than what might be achieved through a competitive bidding process. Industry reports or government cost-analysis data for similar, competed contracts would be necessary for a robust comparison.

What are the performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not include specific performance metrics or Service Level Agreements (SLAs) for this contract. For a contract of this value and duration, focused on critical security equipment maintenance, robust SLAs are essential to ensure timely and effective service delivery. These would typically include response times for corrective maintenance, uptime guarantees for the EDS equipment, preventive maintenance schedules, and quality standards for repairs. The absence of this information in the summary data makes it difficult to assess the contractor's performance obligations and the government's ability to hold them accountable.

Has Smiths Detection, Inc. had previous performance issues with similar contracts for the TSA or DHS?

Assessing the past performance of Smiths Detection, Inc. on similar contracts requires access to contract performance databases, past performance reviews, and potentially Inspector General reports. The provided data does not contain this information. However, for any sole-source award, especially one of this magnitude, a thorough review of the contractor's track record, including any past issues with cost overruns, schedule delays, or quality deficiencies, would be a critical part of the justification and ongoing oversight process. Agencies often maintain internal records of contractor performance.

What is the historical spending trend for EDS equipment maintenance by the TSA?

The provided data only details this specific $28.4 million contract awarded in 2005 and ending in 2010. To understand historical spending trends for EDS equipment maintenance by the TSA, one would need to analyze spending data over a longer period, looking at multiple contracts, including those awarded competitively and non-competitively. This would involve examining annual obligations, contract types, and the number of contractors involved. Such an analysis could reveal whether spending has been increasing, decreasing, or remaining stable, and whether the TSA has historically relied on sole-source providers or actively sought competition.

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: ORDER DEPENDENT (IDV ONLY) (1)

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: $375,705,568

Exercised Options: $63,070,682

Current Obligation: $28,409,157

Parent Contract

Parent Award PIID: HSTS0405DDEP008

IDV Type: IDC

Timeline