OSI Systems Inc. (OSIS) announced that its Security division, Rapiscan Systems, has been notified that the Department of Homeland Security or DHS issued a Notice of Proposed Debarment in connection with a Show Cause letter from the Transportation Security Administration or "TSA" received by Rapiscan in November 2012.
The Show Cause Letter related to the Rapiscan Advanced Imaging Technology system and associated Automated Target Recognition software.
The company said that the notice marks the initial phase of the formal proceedings and will allow Rapiscan, for the first time since the show Cause letter was issued, to provide information and communicate directly with DHS officials.
OSI Systems CEO, Deepak Chopra, said, "Although we have not yet received the actual notice, it would be the first written correspondence from DHS regarding the Show Cause letter. We continue to believe that, with respect to all issues raised in the Show Cause letter, we have complied with all obligations and served as a responsible vendor to the TSA. We look forward to having the opportunity to present our views to DHS and working with the agency to achieve a mutually satisfactory outcome."
Upon receipt of the Notice, under DHS procedures, the company is entitled to demonstrate its compliance with its obligations. Following such procedures, one of three outcomes is possible: DHS could withdraw the proposed Notice; Rapiscan and DHS could enter into an administrative compliance agreement or debarment.
As per federal guidelines, there are restrictions on Rapiscan's ability to seek and/or accept additional federal government contracts or subcontracts. However, the company said it will continue to fully honor and deliver on its ongoing government contracts.
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