Rapiscan Up for Airport Screening Contract Despite Past Controversies

Parent company has ties to the Obama administration

• August 13, 2013 5:00 am


A technology company with ties to the White House is said to be in the running for a federal airport x-ray screener contract despite allegations that the company misled the federal government on a contract for controversial full-body scanners that was terminated by the TSA in January.

Rapiscan was accused of falsifying testing data for technology that was supposed to block its full-body scanners from recording nude images of passengers. The company has vehemently denied the allegations and said the government controlled the test.

"According to information received by the [House Homeland Security Subcommittee on Transportation Security], it appears that the manufacturer may have attempted to defraud the government by knowingly manipulating an operational test," then-chairman of the subcommittee Rep. Mike Rogers (R-Ala.) wrote in a 2012 letter to the TSA.

The TSA ended its contract with Rapiscan in January, saying the company was not able to complete privacy-protecting software within the imposed deadline.

The Department of Homeland Security also took early steps to block the company from competing for future federal contracts, issuing a "Notice of Proposed Debarment" for Rapiscan in the spring.

Industry observers say Rapiscan is one of the few companies in the running for a multi-million-dollar TSA contract for "X-ray systems for screening passenger carry-on baggage to be used in our Nation’s airports."

A Rapiscan executive told the Washington Free Beacon he was unable to confirm the company was competing for the contract when reached by phone on Monday. 

"As I am sure you understand, we limit what we disclose regarding potential sales opportunities," Andrew Goldsmith, vice president for global marketing of Rapiscan, said. "However, I can tell you that Rapiscan is eligible to compete for the opportunity you mentioned and we look forward to growing our business with the U.S. government.

Rapiscan’s parent company OSI Systems Inc. is led by Deepak Chopra, not to be confused with the celebrity New Age guru of the same name. Chopra, OSI Systems executive vice president Alan Edrick, and Rapiscan president Ajay Mehra each contributed $2,300 to President Obama’s 2008 campaign, according to campaign finance records.

Chopra accompanied Obama on a trip to India in 2010 to promote U.S.-India business partnerships, according to a press release on the OSI Systems website.

After the DHS Notice of Proposed Debarment, Rapiscan was briefly placed on the government’s excluded parties list, preventing it from competing for contracts, from May 17 to June 21 of this year.

The list includes companies that are "ineligible [to compete for contracts] based upon adequate evidence of conduct indicating a lack of business honesty or integrity, or a lack of business integrity, or regulation, statute, executive order or other legal authority," pending an investigation.

Companies placed on the excluded parties list can be debarred unless the notice is withdrawn by the DHS or the company and the federal government enter into an "administrative compliance agreement."

OSI announced that Rapiscan had completed an administrative compliance agreement in June.

"We appreciated the opportunity to meet with DHS and we are pleased to reach this outcome on an important issue for our organization. We take pride in our role as a U.S. Government vendor and this agreement allows us to continue to serve DHS, including TSA, and other U.S. Government agencies as a leading security solutions provider."

The TSA did not respond to questions about the details of the mediation agreement or Rapiscan’s potential bid as of press time.

Published under: Obama Administration, TSA