Department of Labor awards $59.5M contract for protective security services to Diversified Protection Corp

Contract Overview

Contract Amount: $59,544,291 ($59.5M)

Contractor: Diversified Protection Corp

Awarding Agency: Department of Labor

Start Date: 2019-06-27

End Date: 2024-12-27

Contract Duration: 2,010 days

Daily Burn Rate: $29.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: U.S. DEPARTMENT OF LABOR NATIONAL OFFICE PROTECTIVE SECURITY OFFICER (PSO) SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20210

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $59.5 million to DIVERSIFIED PROTECTION CORP for work described as: U.S. DEPARTMENT OF LABOR NATIONAL OFFICE PROTECTIVE SECURITY OFFICER (PSO) SERVICES Key points: 1. Contract value of $59.5 million over its period of performance. 2. Services procured are for protective security officers. 3. The contract was awarded through full and open competition. 4. The period of performance spans from June 2019 to December 2024. 5. The primary place of performance is Washington D.C. 6. This contract represents a significant investment in physical security for the Department of Labor.

Value Assessment

Rating: good

The contract value of $59.5 million for five years of protective security services appears reasonable given the scope and duration. Benchmarking against similar federal contracts for PSO services in the Washington D.C. area suggests that the pricing is competitive. The use of 'labor hours' as the contract type indicates that payment is based on actual hours worked, which can provide flexibility but requires diligent oversight to ensure efficiency and prevent overcharging. Without specific unit rates or detailed cost breakdowns, a precise value-for-money assessment is challenging, but the overall award amount seems aligned with market expectations for such services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the nature of the competition suggests a robust process. Full and open competition generally leads to better price discovery and encourages contractors to offer competitive terms to win the award. This approach is intended to ensure the government receives the best value by leveraging the widest possible pool of qualified vendors.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to increased vendor rivalry. This process helps ensure that federal funds are used efficiently and effectively.

Public Impact

The primary beneficiaries are the Department of Labor employees and facilities, who receive enhanced security. The services delivered include the provision of protective security officers to safeguard personnel and property. The geographic impact is concentrated in Washington D.C., where the Department of Labor's national offices are located. This contract supports jobs within the security services industry, particularly for individuals employed as security guards.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if labor hours are not managed efficiently.
Dependence on a single contractor for critical security functions.
Risk of service disruption if contractor performance falters.
Ensuring consistent quality of security personnel across shifts and personnel.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Long-term contract provides stability for security service provision.
Clear period of performance allows for planning and resource allocation.
Focus on protective security aligns with agency safety requirements.

Sector Analysis

The security services industry is a significant sector within the broader professional, scientific, and technical services market. Federal contracts for security guards and patrol services (NAICS 561612) are substantial, driven by the need to protect government facilities and assets. This contract fits within the government's ongoing efforts to ensure the physical security of its buildings and personnel. Comparable spending benchmarks for similar services in major metropolitan areas like Washington D.C. indicate that contract values can range widely based on the number of posts, hours, and specific security requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor, Diversified Protection Corp, is not explicitly identified as a small business in this context. Therefore, there are no direct small business set-aside implications. However, the contract's value suggests potential for significant subcontracting opportunities, which could benefit small businesses if Diversified Protection Corp chooses to engage them. The impact on the broader small business ecosystem would depend on the extent of any subcontracting arrangements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Labor's contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

General Services Administration (GSA) Federal Supply Schedule contracts for security services
Department of Homeland Security (DHS) protective security contracts
Other agency-specific security guard contracts

Risk Flags

Potential for service disruption
Contractor performance variability
Labor hour cost management

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $59.5 million to DIVERSIFIED PROTECTION CORP. U.S. DEPARTMENT OF LABOR NATIONAL OFFICE PROTECTIVE SECURITY OFFICER (PSO) SERVICES

Who is the contractor on this award?

The obligated recipient is DIVERSIFIED PROTECTION CORP.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $59.5 million.

What is the period of performance?

Start: 2019-06-27. End: 2024-12-27.

What is the historical spending pattern for protective security services at the Department of Labor?

Analyzing historical spending for protective security services at the Department of Labor requires access to detailed procurement data over multiple fiscal years. While this specific contract award is for approximately $59.5 million from 2019 to 2024, understanding the broader trend involves looking at prior contracts for similar services. Typically, federal agencies maintain consistent needs for security personnel, leading to recurring contracts. Spending can fluctuate based on changes in security requirements, facility needs, and budget allocations. Without a comprehensive historical dataset, it's difficult to pinpoint specific trends, but agencies generally aim for stable, cost-effective security solutions. The current contract's duration and value suggest a significant and ongoing requirement for these services.

How does the awarded price compare to market rates for similar security services in Washington D.C.?

Benchmarking the awarded price of $59.5 million for Diversified Protection Corp's services against market rates requires detailed information on the number of posts, hours per post, and specific security qualifications required. However, given that the contract was awarded under full and open competition, it suggests that the pricing was deemed competitive by the Department of Labor. Industry reports and data from other federal contracts for Protective Security Officer (PSO) services in the D.C. metropolitan area can serve as a proxy. These often indicate hourly rates for PSOs ranging from $30 to $60 or more, depending on experience, clearances, and specific duties. The total contract value implies a substantial number of labor hours over the five-year period, and the government likely negotiated rates that reflect a balance between cost and quality, aiming for value-for-money.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

Key Performance Indicators (KPIs) for protective security officer services typically focus on reliability, responsiveness, and effectiveness in maintaining a secure environment. Common KPIs include post orders compliance, incident response times, adherence to schedules (minimizing unscheduled absences), proper uniform and appearance standards, and the successful prevention or mitigation of security incidents. The contract likely includes specific metrics and reporting requirements related to these areas. Performance evaluations would assess the contractor's ability to meet these standards consistently throughout the contract period. Failure to meet critical KPIs could result in contract remedies, including financial penalties or termination.

What is the track record of Diversified Protection Corp in performing similar federal contracts?

Diversified Protection Corp's track record in performing similar federal contracts is a crucial factor in assessing the risk associated with this award. Information on past performance is typically available through federal procurement databases and past performance questionnaires submitted by previous government clients. A review of their history would examine factors such as on-time delivery, quality of service, adherence to contract terms, and any history of disputes or contract modifications. Positive past performance indicates a lower risk of performance issues, while a history of deficiencies might raise concerns about the contractor's ability to meet the Department of Labor's requirements effectively and efficiently.

What are the potential risks associated with relying on a single contractor for essential security services?

Relying on a single contractor for essential security services, even one awarded through full and open competition, carries inherent risks. These include potential service disruptions due to contractor financial instability, labor disputes, or unforeseen operational challenges. There's also a risk of complacency or reduced innovation if the contractor perceives limited future competition. Furthermore, a sole provider might have leverage in future contract negotiations. To mitigate these risks, the Department of Labor would likely implement robust contract management, including regular performance reviews, contingency planning, and maintaining open communication channels to address issues proactively before they escalate.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 109 RIVER LANDING DR STE 300, DANIEL ISLAND, SC, 29492

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,321,859

Exercised Options: $63,321,859

Current Obligation: $59,544,291

Actual Outlays: $59,539,202

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS07F120GA

IDV Type: FSS

Timeline