L3 Technologies [LLL] on Tuesday protested a Transportation Security Administration award two weeks ago to Smiths Detection for $96.8 million for the first order of new checkpoint baggage scanners that the agency expects to begin installing at U.S. airports this summer.
Such a protest typically means that the awarding agency issues a stop work order to the awardee pending resolution of the matter. The reason for the protest is unclear.
TSA hadn’t responded to a Defense Daily query by press time and L3 said that “as a matter of policy” the company doesn’t comment on protests.
The Government Accountability will rule on the protest within 100 days unless the protest is withdrawn or TSA decides to reopen the competition.
Smiths Detection’s contract is for 300 of its HI-SCAN CTiX computed tomography (CT)-based scanners. In addition to L3, the company beat out bids from Analogic and a small company, Integrated Defense & Security Solutions (IDSS), which have also developed checkpoint CT scanners. Smiths Detection is part of Britain’s Smiths Group.
TSA Administrator David Pekoske told a House panel on Tuesday that Smiths Detection’s price for the contract was “substantially less” that the agency estimated, allowing it to buy 50 percent more systems than expected. Industry officials have complained that Smiths Detection bought the program, giving it a leg up on the next round of competition and a marketing boost internationally where TSA’s purchases of security technology are viewed as the gold standard.
Rep. John Katko (R-N.Y.), a member of the House Homeland Security Subcommittee on Transportation and Maritime Security, told Pekoske “that’s superb, that’s great news to hear that you’re actually saving the government money, so well done.”
Several members of the House Homeland Security Committee in late March immediately following the award to Smiths Detection complained in a bipartisan letter to Pekoske that the single award risks stifling further competition in the program. During the hearing, in response to questions from Rep. Bonnie Watson Coleman (D-N.J.) about the rationale for the single vendor award versus contracts to multiple vendors, Pekoske replied that the strategy is about keeping costs down for subsequent awards.
“That first contract, we thought it was important to go for a single award because we really wanted to establish the price for these systems,” Pekoske said. “We had a government cost estimate of what we thought the price would be and if you do an award process where there’s only one winner, we find that the participating vendors tend to sharpen the pencil a lot more on price. And that was in fact what we saw in this regard.”
The day after awarding the contract to Smiths Detection, Pekoske told reporters that the agency plans another round of competition that will result in new awards next year to one or more vendors. TSA is seeking $221 million in its fiscal year 2020 budget request for 320 additional checkpoint CT scanners.
Depending on bid prices, the FY ’20 purchase could entail the purchase of even more CT systems, Pekoske told Katko. The first 75 are expected to be installed before the end of FY ’19 in late September and the remaining 225 under the order with Smiths Detection should be deployed before the end of FY ’20, Pekoske said.
Ultimately, TSA wants to procure about 2,500 checkpoint CT systems, Pekoske said. That number is about 100 more than what he has previously said. There are currently about 2,400 aviation security screening lanes overall at U.S. airports. TSA currently uses Advanced Technology X-ray systems to screen carry-on bags, with Smiths Detection supplying most of them and the rest provided by the Rapiscan Systems division of OSI Systems [OSIS].
Pekoske also told reporters in March that it would take about eight years for TSA to fulfill its requirement of checkpoint CT systems. Katko said on Tuesday that that’s “unacceptable,” adding the scanners are needed “now.”
Pekoske said he believes the program “is off to a great start,” adding, “I share your concern that we want to put this capability out as quickly as we can.” TSA is working on a deployment plan for the CT systems, he said, and is looking at “probably stepping it up another level” after FY ’20 to buy more systems faster “and get that done quicker as you mentioned.”
Pekoske also told Watson Coleman that he “shares the concern that we also include small businesses” and the innovation they bring to TSA through acquisitions.
Future contracts for the checkpoint CT systems will cover “multiple years,” he said, and TSA will consider a small business set aside for the program going forward as it will consider “all of our contract options because we want to get the capability out as quickly as we can but we also want that innovation.”
The first 300 systems TSA is buying from Smiths are only required to meet the current detection standard. In the next round of competition, TSA is seeking a higher level of threat detection, called Accessible Property Screening Standard Level 0. Future plans call for even greater detection.
The CT technology is currently used by TSA to automatically screen checked bags for explosives. For the checkpoint deployments, the CT systems will still require operator decisions to pass a bag but because the technology provides a three-dimensional image of a bag’s contents that can be virtually rotated on the display screen, travelers won’t have to divest their laptops and personal electronic devices.
Eventually, TSA hopes that the technology will allow travelers to leave their liquids inside their bags.