TSA terminates Peraton's $578M logistics contract

The Transportation Security Administration has terminated a $578 million contract awarded to Peraton for logistics services to support security checkpoint equipment at U.S. airports, an agency spokesperson has confirmed to Washington Technology.

Peraton first announced the win in October and saw the award seemingly confirmed in January when incumbent Leidos withdrew its protests against TSA’s decision. The contract was terminated on May 31, according to information from the Federal Procurement Data System that tracks unclassified contracting obligations.

“TSA terminated the checkpoint screening equipment maintenance contract awarded to Peraton, which was to commence on June 1, 2018, in the best interest of the U.S. government. In the meantime, TSA has extended the incumbent vendor contract, Leidos, to ensure continued services and will issue a replacement contract as soon as practicable,” TSA Assistant Press Secretary Michelle Negron told WT in a statement.

Leidos has performed the work since 2013 under the current contract and received an extension on June 6 to continue through July 31, according to FPDS data. That was preceded by another extension on Jan. 20 to cover services through May 31. TSA could potentially have to issue another extension after July 31 in the event of any potential litigation.

The Washington Business Journal first reported details of the Peraton contract’s termination. TSA’s statement to WT did not detail why the agency terminated the contract.

A Peraton spokesperson told WT in a statement that TSA told them of the termination and are “currently engaged in a constructive dialogue with the TSA regarding the contract.” WT has reached out to Leidos for comment and will update this post when we hear back.

Formerly the Harris Corp. IT services business, Peraton launched under its current brand last year and has sought to position itself for opportunities in areas such as space, intelligence, cyber and signal intelligence, homeland security, defense and communications.

Private equity firm Veritas Capital acquired the business for $690 million in April of last year and subsequently hired longtime federal market veteran Stu Shea as CEO. Harris reported the business as having roughly $1.1 billion in annual revenue at the time.

The winner of the “Integrated Logistics Services” contract would also be responsible for testing, deployment, and maintenance of equipment that checks passengers and baggage for weapons and other possible security threats.

TSA uses the systems at 448 airports inside the U.S.