China syndromeAirport scanner vendor failed to disclose use of Chinese components

Published 10 December 2013

Recently TSA cancelled a $60 million contract with Rapiscan Systems, a manufacturer of anatomically revealing airport security scanners, after Rapiscan was found to be using unapproved Chinese components in its scanners – and failing to disclose this fact to TSA. Rapiscan, in bidding on the contract, submitted a list of U.S.-made components used in the scanners to the agency, as required by law. After the company received an approval of that list – and the $60 million contract – it ordered the same components from a Chinese company — the Shanghai Advanced Non-Destructive Testing – instructing the Chinese company to label the Chinese-made components with the same part numbers as the originally approved, U.S.-made components, apparently in an effort to make it more difficult for TSA inspectors to notice the illegal switch. Members of the House Homeland Security Committee, charging that the use of Chinese components made the machines susceptible to sabotage, disruption, or spying, want to know whether TSA was aware of Rapiscan’s shenanigans.

Members of the House Homeland Security Committee have expressed concerns about the Transportation Security Administration’s purchase of 250 baggage-screening systems containing Chinese-manufactured parts – parts which could facilitate spying or sabotage.

The vendor, Rapiscan Systems, is known for supplying the TSA with the now-banned body scanners which revealed passengers in nude form. Rapiscan is a major TSA and defense department supplier. NextGov reports that the U.S. Army secured a $42,024 deal on 27 September 2013 with Rapiscan for two baggage and parcel X-ray machines. On the same day, Rapiscan secured a $217,200 deal for undescribed “hazard-detecting instrument” technology with the Defense Logistics Agency. Most recently, the TSA withdrew a $60 million order with Rapiscan for an additional 550 X-ray inspection machines, after the TSA discovered the machines contained unapproved and untested components.

The House committee has asked TSA administrator John Pistole and acting Homeland Security Department secretary Rand Beers to submit by Friday, 13 December 2013, documents detailing system risks. In a 6 December 2013 letter written to Pistole and Beers, the committee’s Republican and Democratic leaders wrote, “Questions remain about how the situation will be rectified and the potential for unmitigated threats posed by the failure to remove the machinery. It is our understanding that these new components — inappropriately labeled with the same part number as the originally approved component — were entirely manufactured and assembled in the People’s Republic of China.”

Committee members have requested the TSA to submit all documents related to risk assessments of the baggage scanners’ “potential for sabotage or espionage attempts.” The request includes a parts list and description of the parts outsourced to China. Lawmakers also request a TSA 20 November 2013 “show cause notice” sent to Rapiscan asserting that the company violated contractual obligations.

Rapiscan claims the TSA knew the baggage scanners would contain Chinese parts before placing the order. “Rapiscan proposed to TSA that it was our intention to use X-ray generators manufactured in China, and TSA awarded the delivery order to Rapiscan,” Brad Buswell, president of Rapiscan aviation products, said in a statement. “The referenced component is the X-ray generator, a simple electrical item with no moving parts or software.”

Buswell described the part as “effectively, an X-ray light bulb.” On the topic of outsourcing security components to China-based company, Shanghai Advanced Non-Destructive Testing, Buswell noted that the same vendor sells generators to Rapiscan’s competitors. Buswell believes that Rapiscan lost the order because the firm had failed to inform the TSA before using an upgraded component. “While the component change was vetted by internal quality assurance, Rapiscan did not meet the contractual requirement of notifying TSA in advance,” Buswell said.

In line with the federal acquisition regulations, TSA has terminated an order with Rapiscan for X-ray equipment used for screening carry-on baggage, due to a violation of contractual requirements,” TSA officials said in a written statement. “TSA has strict requirements that all vendors must meet for security effectiveness and efficiency.”

The questions raised by the House Homeland Security Committee come at a time when federal security and defense agencies are concerned about security within their supply chain. A 2012 Senate Armed Services Committee two-year investigation identified more than one million suspect electronic parts, mostly from China, in U.S. military technologies.