OSI Systems [OSIS] says that it believes the Transportation Security Administration (TSA) recently terminated its contract for airport checkpoint X-Ray systems due to the use of an X-Ray generator that had not been pre-approved by the agency.
The company says said that its proposal for the $67 million Advanced Technology-2 (AT-2) X-Ray system contract that it won in September includes the use of the upgraded component, which is made by China’s Shanghai Advanced Non-Destructive Testing
(SANDT). However, the company says that while it vetted the X-Ray generator internally, it did not obtain TSA approval as required under the contract.
Once OSI Systems discovered its error, the company says it reported the fact to TSA along with a plan for corrective action. OSI Systems also says that SANDT supplies X-Ray generators to other companies that make X-Ray security systems, including its competitors.
Congressional Concerns
TSA earlier this month terminated the $67 million order to Rapiscan for 550 AT-2 systems. The contract rescission led the leadership of the House Homeland Security Committee to launch their investigation into the matter.
Rep. Michael McCaul (R-Texas), chairman of the committee, and Rep. Bennie Thompson (D-Miss.), sent then Acting Homeland Security Secretary Rand Beers and TSA Administrator John Pistole a letter dated Dec. 6 saying the TSA has deployed 250 of Rapiscan’s AT-2 systems that have the “unapproved, untested” Chinese components.
The congressmen want any documents from TSA that show the risk for sabotage or espionage attempts of AT-2 machines.
“It is our understanding that TSA is utilizing experts at Johns Hopkins University to assist in determining whether the systems are at risk for sabotage or espionage,” write McCaul and Thompson.
The congressmen are also seeking a number of other documents related to the matter, including an engineering change proposal sent by Rapiscan to TSA on Oct. 24 and a show cause notice sent by TSA to Rapiscan a month later stating that the company was not in compliance with its contractual obligations. They also want follow up correspondence between the agency and the company and list of the parts sourced from China in the AT-2 system supplied by Rapiscan.
Given their concerns, McCaul and Thompson want DHS to debar Rapiscan from federal contracts.
“In light of this matter, we have serious concerns as to the quality controls in place for TSA security screening technology,” write McCaul and Thompson.”Specifically, questions remain about how the situation will be rectified and the potential for unmitigated threats posed by the failure to remove this machinery.”
TSA Familiar with Chinese Component
TSA is familiar with the SANDT generators, OSI System says.
“According to TSA’s own preliminary test results, the SANDT manufactured generator shows comparable detection capability and false alarm rates,” OSI Systems says.
OSI Systems CEO Deepak Chopra says that the SANDT generator uses the “same key subcomponents as the TSA-approved generator, but adds some incremental design improvements for the purposes of enhancing reliability.” He notes that the generator’s only output is X-Rays.
At the time TSA terminated OSI Systems’ contract for default, the award was under protest by Smiths Detection, a division of Britain’s Smiths Group that had lost the bid. OSI Systems’ Rapiscan Systems division and Smiths Detection supply most of the existing AT X-Ray systems to TSA for screening of carry-on bags at airport checkpoints in the United States.
In a written statement, TSA said, “Through active contract management, and in line with the Federal Acquisition Regulations, TSA has terminated an order for X-Ray equipment used for screening carry-on baggage, due to a violation of contractual requirements.” The statement also said that “TSA has strict requirements that all vendors must meet for security effectiveness and efficiency.”