Paragon Systems Inc. secured over $53.6M for security guard services from SSA over 9 years

Contract Overview

Contract Amount: $53,665,823 ($53.7M)

Contractor: Paragon Systems Inc

Awarding Agency: Social Security Administration

Start Date: 2002-12-15

End Date: 2011-12-16

Contract Duration: 3,288 days

Daily Burn Rate: $16.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NCC AND SECURITY WEST ARMED/UNARMED GUARD SERVICES

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Social Security Administration obligated $53.7 million to PARAGON SYSTEMS INC for work described as: NCC AND SECURITY WEST ARMED/UNARMED GUARD SERVICES Key points: 1. Value for money appears fair given the long duration and specialized nature of armed/unarmed guard services. 2. Competition dynamics were limited, with the contract awarded under 'not available for competition' status. 3. Risk indicators are moderate, stemming from the sole-source nature and potential for price creep over a long period. 4. Performance context is established over a significant contract term, suggesting a history of service delivery. 5. Sector positioning is within the security services industry, a critical component for government facility protection.

Value Assessment

Rating: fair

The contract's total value of $53.6M over 9 years averages approximately $5.96M annually. Benchmarking this against similar large-scale federal security contracts is challenging without more specific service details (e.g., number of guards, hours, specific security requirements). However, the duration suggests a stable, long-term need. The firm-fixed-price structure provides some cost certainty, but the lack of competition limits opportunities for aggressive price negotiation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' status, indicating a sole-source procurement. This means that only one vendor, Paragon Systems Inc., was solicited and awarded the contract. The lack of a competitive bidding process limits the government's ability to explore alternative solutions or secure potentially lower pricing through market competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

The Social Security Administration (SSA) benefits from continuous security presence at its facilities. Services delivered include armed and unarmed guard services, ensuring physical security and access control. Geographic impact is concentrated in Maryland, where the contract was primarily performed. Workforce implications include the employment of security personnel by Paragon Systems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Long contract duration (9 years) may lead to complacency or reduced incentive for innovation.
Lack of transparency in the 'not available for competition' justification could mask underlying issues.
Potential for scope creep over the extended period without competitive re-evaluation.

Positive Signals

Long-term contract suggests consistent service delivery and contractor reliability.
Firm-fixed-price contract provides budget predictability for the agency.
Established relationship over 9 years likely means a deep understanding of SSA's security needs.

Sector Analysis

The security services industry is a significant sector within the federal contracting landscape, encompassing a wide range of protective services. This contract falls under the Security Guards and Patrol Services NAICS code (561612). Federal spending in this area is substantial, driven by the need to protect government facilities, personnel, and assets. Comparable spending benchmarks would typically involve analyzing the cost per guard hour or cost per square foot protected across similar federal contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) indicator is also false. This suggests that small businesses were not specifically targeted for subcontracting opportunities under this award, potentially limiting their participation in this significant federal contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Social Security Administration's contracting officers and program managers. Given the long duration and sole-source nature, robust oversight is crucial to ensure performance standards are met and costs remain justified. Transparency is limited by the procurement method, but performance reviews and contract modifications would be subject to internal SSA review and potentially audits by the SSA Office of Inspector General.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
General Services Administration Schedules for Security Services
Department of Defense Guard Services

Risk Flags

Sole-source award
Long contract duration
Lack of small business subcontracting

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $53.7 million to PARAGON SYSTEMS INC. NCC AND SECURITY WEST ARMED/UNARMED GUARD SERVICES

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Social Security Administration (Social Security Administration).

What is the total obligated amount?

The obligated amount is $53.7 million.

What is the period of performance?

Start: 2002-12-15. End: 2011-12-16.

What specific security threats or requirements necessitated a sole-source award for Paragon Systems Inc.?

The provided data indicates the contract was awarded under 'not available for competition' (CT: NOT AVAILABLE FOR COMPETITION). This designation typically implies that only one source is capable of fulfilling the requirement, often due to unique capabilities, proprietary technology, or urgent needs where competition is impractical. For security services, this could stem from specific site requirements, existing security infrastructure integration, or a need for continuity of operations with a proven provider. Without further documentation from the agency (e.g., justification for other than full and open competition), the precise reasons remain speculative but point to a perceived lack of viable alternatives at the time of award.

How does the average annual spending of $5.96M compare to other large federal security contracts?

An average annual spending of approximately $5.96 million for security guard services is substantial but falls within the range of large federal contracts. For context, major federal agencies like the Department of Defense or the Department of Homeland Security often award contracts in the tens or hundreds of millions for comprehensive security solutions across multiple facilities. However, the specific comparison depends heavily on the scope of services (e.g., number of guards, armed vs. unarmed, hours of coverage, specific security technologies deployed) and geographic concentration. This contract's value is significant for a single agency's needs within a specific region (Maryland).

What are the potential risks associated with a 9-year sole-source contract for security services?

A 9-year sole-source contract for security services presents several risks. Firstly, the lack of competition means the government may not be achieving the best possible price, as there's no market pressure to drive down costs. Secondly, a long-term sole-source arrangement can reduce the contractor's incentive to innovate or improve service quality, as they face no threat of losing the business to a competitor. Thirdly, it limits the agency's flexibility to adapt to changing security needs or adopt new technologies that might be offered by other vendors. Finally, there's a risk of vendor lock-in, making it difficult and potentially costly to transition to a new provider if performance issues arise or market conditions change.

Has Paragon Systems Inc. had significant performance issues or contract disputes with the SSA or other federal agencies?

The provided data does not include specific details on performance issues or disputes for this contract. However, a 9-year contract duration (December 2002 to December 2011) suggests a level of sustained performance acceptable to the Social Security Administration. To assess potential issues, one would need to review contract performance reports, CPARS (Contractor Performance Assessment Reporting System) data, and any available Inspector General reports related to Paragon Systems Inc.'s contracts with the SSA or other federal entities. Without this deeper dive, it's assumed the contract was renewed based on satisfactory performance.

What is the typical duration for federal contracts of this nature (security guard services)?

Federal contracts for services like security guard services often have an initial base period of 1 year, with multiple option periods that can extend the total contract duration. While 9 years (including all options) is on the longer side, it's not unprecedented, especially for requirements deemed stable and where a long-term relationship is beneficial for operational continuity. Many agencies prefer shorter-term contracts (e.g., 1-5 years) to allow for more frequent re-competition and market testing. However, for specialized needs or where significant transition costs are involved, longer durations are sometimes justified, though they typically require stronger justifications for sole-source awards.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: SRS Critical Infrastructure Security LLC (UEI: 355790924)

Address: 3317 TRIANA BLVD., HUNTSVILLE, AL, 05

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $53,568,515

Exercised Options: $53,568,515

Current Obligation: $53,665,823

Timeline