More than a year after it though it would lose the contract, OSI Systems [OSIS] says it has begun the operations phase of a turnkey screening services contract for the Government of Albania that was announced in 2013 but then paused in August 2014 after the election of a new government put the contract in jeopardy.
OSI Systems says it expects sales from the multi-year contract to reach about $228 million. When awarded, the contract was for 15 years.
“We are excited to get started with the initial sites and support of the Government of Albania to address its need to secure its ports and land crossings, and enhance the government’s capability to interdict contraband and undeclared materials,” says Deepak Chopra, OSI Systems president and CEO. “We look forward to ramping up the program throughout fiscal 2016.”
OSI Systems is providing cargo and vehicle screening services at multiple sites throughout the country. As in Mexico and Puerto Rico where it also has turnkey services contracts in place, the company will provide a comprehensive X-Ray screening program, including staffing, training, systems integration, and operations and maintenance using its Rapiscan Systems division’s high-energy X-Ray screening equipment.
“With Albania now operational, along with the Puerto Rico and Mexico turnkey programs, we continue to innovate and differentiate ourselves in the turnkey solutions space where we expect to experience additional growth,” says Chopra.
Mr. Chopra concluded, “With Albania now operational, along with the Puerto Rico and Mexico turnkey programs, we continue to innovate and differentiate ourselves in the turnkey solutions space where we expect to experience additional growth.”
When the new Albania government halted work on the contract last year, OSI Systems was ahead of schedule and said at the time that work was progressing smoothly. At the time Chopra said his company wasn’t giving up on the contract but he also sounded doubtful about the program continuing.
The turnkey services contracts have been a boon to the company, producing recurring revenues to help smooth the typically lumpy sales profile associated with the equipment sales by Rapiscan.
Rapiscan gets CBP Task Order
Following its selection as one of four companies eligible to compete for work under a potential $293 million indefinite-delivery, indefinite-quantity contract with Customs and Border Protection (CBP) to provide large-scale medium-energy mobile X-Ray systems, OSI Systems says Rapiscan has received an initial $19 million delivery order to provide Eagle M25 Mobile CVI system. The delivery order is for 14 systems with options for three more.
The Eagle M25 is Rapiscan’s newest Mobile Detection System.
Rapiscan is competing with American Science and Engineering [ASEI], Leidos [LDOS] and Smiths Detection for task orders under the ID/IQ contract. All four companies received an initial order for one of their respective medium-energy mobile inspection systems. Rapiscan’s order for one M25 was valued at $2.9 million.
If CBP exercises options for maintenance beyond the guaranteed one year, the value of Rapiscan’s initial orders is worth about $38 million, Steven McHugh, vice president of North America for Rapiscan tells HSR at the recent Association of the U.S. Army conference in Washington, D.C.
Rapiscan also recently received a $1.8 million task order from CBP under the Small Non-Intrusive Inspection program to provide its 627DV X-Ray system for baggage and parcel inspection. The task order is the second on the program—the first having gone to Astrophysics, Inc.—which was awarded last year. Smiths Detection is also eligible for task order under the Small NII procurement.