Nearly seven months after taking delivery of a mobile X-ray system manufactured in the People's Republic of China, the Port of Los Angeles is on the verge of canceling the controversial contract.

The staff at the port has recommended that the Board of Harbor Commissioners find DULY Research, Inc., the California-based broker who represents the Chinese manufacturer, in default of the terms of the contract, when it next meets on Feb. 5.

"Cancellation of the purchase contract is recommended because after delivery of the mobile scanning unit to the Port of Los Angeles on July 8, 2008, field tests and other research revealed that the manufacturer and vendor failed to meet the requirements of the Purchase Contract," said a staff summary submitted to the board.

The contract created a stir in the media and on Capitol Hill because the manufacturer is Nuctech Company Limited, a Chinese company headquartered in Beijing, whose president happens to be the son of the President of the People's Republic of China.

Critics of the deal argued that procuring a Chinese-built X-ray scanning system could endanger U.S. national security, that it would outsource U.S. manufacturing jobs, and that it was possible that Nuctech had "reverse engineered" patented U.S. and European X-ray technologies. The fact that a large portion of the purchase price would be reimbursed with a port security grant from the U.S. Department of Homeland Security drew additional criticism.

The contract was originally signed between the Port of Los Angeles and DULY Research, of Rancho Palos Verdes, CA, on October 24, 2007, for a total price of $1,880,000, said the memo prepared by the port's homeland security division. Since that time, the Board agreed to certain "add-on" options – that were not described in the staff memo -- that raised the total cost of the deal to more than $2.4 million.

In recommending that the board declare DULY Research in default and cancel the entire contract, the homeland security division made no mention of any of the political controversy that swirled around the original contract.

The fact that the port had signed such a contract to purchase a Chinese-built X-ray system was first disclosed in a front-page article published in the October 2008 edition of GSN: Government Security News. Shortly thereafter, Lou Dobbs, a TV newsman on the CNN; Michael Savage, a conservative radio talk show host; and Rep. Dana Rohrabacher (R-CA), whose congressional district includes the Port of Los Angeles, all blasted the port's X-ray contract.

On Jan. 23, perhaps jumping the gun, Lou Dobbs reported that "the port of Los Angeles has apparently come to its senses on a very important issue."

The next day, in anticipation of the board's vote, Rep. Rohrabacher welcomed the Harbor Commissioners' upcoming move. "The decision to cancel this contract was the right decision and I would hope moving forward, the Ports are given direction by the federal government not to just accept the lowest bidder," said the congressman.

In fact, the board has not yet taken any official action to cancel the Chinese X-ray contract.

According to the staff memo, DULY Research and Nuctech have fallen short of the terms of their contract in several ways:

• The mobile scanning vehicle cannot be lawfully imported into the U.S. as a "conforming motor vehicle" and is not capable of being driven legally in California;

• The unit does not meet European Union standards regarding the control of fluorinated greenhouse gasses;

• DULY Research has not provided evidence of compliance with ISO 9001 quality standards;

• DULY Research has not provided system documentation or operational checklists in the English language;

• The generator for the X-ray unit failed during training due to a faulty solenoid;

• Two different perimeter monitoring radiation dosimeters failed;

• DULY Research has not provided documentation certifying the calibration of the radiation detectors, and;

• "During testing, the Mobile Scanning Unit consistently failed to operate as specified without the intervention and assistance of a DULY Research/Nuctech technician."

The complete article is available here