DHS awards $51M for border processing stations, raising questions on value and competition

Contract Overview

Contract Amount: $51,068,137 ($51.1M)

Contractor: Deployed Resources LLC

Awarding Agency: Department of Homeland Security

Start Date: 2022-12-21

End Date: 2024-12-09

Contract Duration: 719 days

Daily Burn Rate: $71.0K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PHONE BOOTHS / VIRTUAL PROCESSING STATIONS IN LAREDO (TX), DONNA (TX), YUMA (AZ), AND EL PASO (TX).

Place of Performance

Location: CANUTILLO, EL PASO County, TEXAS, 79835

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $51.1 million to DEPLOYED RESOURCES LLC for work described as: PHONE BOOTHS / VIRTUAL PROCESSING STATIONS IN LAREDO (TX), DONNA (TX), YUMA (AZ), AND EL PASO (TX). Key points: 1. The contract's value appears high relative to the scope of prefabricated structures. 2. Limited competition suggests potential for inflated pricing. 3. The duration of the contract (719 days) is substantial for this type of infrastructure. 4. Performance context is limited, with no clear metrics for success provided. 5. This contract falls within the broader 'Prefabricated Metal Building' manufacturing sector. 6. The use of a BPA call indicates a pre-negotiated agreement, potentially limiting price discovery. 7. The fixed-price nature of the contract shifts some risk to the government if costs escalate.

Value Assessment

Rating: questionable

The award of over $51 million for prefabricated metal buildings and components, primarily for phone booths and virtual processing stations, appears disproportionately high. While specific features and deployment complexities are not detailed, comparable projects for similar structures typically cost significantly less. The lack of detailed justification for the high price, especially given the relatively standard nature of the components, warrants further scrutiny to ensure taxpayer funds are being used efficiently. Benchmarking against similar government or commercial projects for modular or prefabricated structures would be necessary to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP (Simplified Acquisition Procedures), which typically involves fewer than three bidders. With only two bids received, the level of competition was inherently limited. This suggests that potential bidders may have been unaware of the opportunity, deterred by the requirements, or that the market for such specialized services under SAP is narrow. Limited competition can lead to higher prices as the government has less leverage to negotiate favorable terms.

Taxpayer Impact: Limited competition means taxpayers may have paid a premium, as the government had fewer options to drive down costs through a robust bidding process.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) personnel who will utilize the processing stations. The services delivered include the provision and deployment of physical infrastructure for border processing. The geographic impact is concentrated in Texas (Laredo, Donna, El Paso) and Arizona (Yuma). Workforce implications are likely minimal, primarily involving the manufacturing and installation of the structures, rather than significant new operational roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for prefabricated structures raises concerns about cost-effectiveness.
Limited competition suggests potential for price inflation and reduced value for money.
Lack of detailed performance metrics makes it difficult to assess the effectiveness of the deployed stations.
The use of SAP for a contract of this magnitude might indicate a missed opportunity for broader competition.
The specific need for 'phone booths' and 'virtual processing stations' could be further clarified to justify the investment.

Positive Signals

The contract is awarded to a single entity, potentially streamlining deployment and management.
The fixed-price contract type provides cost certainty for the government, assuming the contractor manages their own risks effectively.
The deployment locations are strategically important border areas, indicating a direct response to operational needs.
The contract falls under a BPA call, suggesting a pre-existing framework that may have expedited the acquisition process.

Sector Analysis

This contract falls within the Prefabricated Metal Building and Component Manufacturing sector (NAICS 332311). This industry encompasses the production of prefabricated metal buildings and their components. The market size for such components can be substantial, driven by construction needs across various sectors, including government, commercial, and residential. Comparable spending benchmarks for government-issued prefabricated structures vary widely based on size, complexity, and features, but a $51 million award for what are described as processing stations and phone booths appears to be on the higher end, especially if the components are relatively standard.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have a subcontracting plan requirement mentioned. The awardee, DEPLOYED RESOURCES LLC, is not explicitly identified as a small business in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, with no specific provisions to encourage small business participation or subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Customs and Border Protection (CBP), a component of the Department of Homeland Security (DHS). The contract's performance and adherence to terms would be monitored by contracting officers and program managers within CBP. Transparency regarding the specific details of the deployment and performance metrics may be limited due to operational security concerns inherent in border operations. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Border Infrastructure Projects
Customs and Border Protection Technology Procurement
Modular and Prefabricated Building Contracts
Department of Homeland Security Facilities

Risk Flags

High Value Award
Limited Competition
Lack of Detailed Scope
Potential for Cost Overruns
Unclear Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $51.1 million to DEPLOYED RESOURCES LLC. PHONE BOOTHS / VIRTUAL PROCESSING STATIONS IN LAREDO (TX), DONNA (TX), YUMA (AZ), AND EL PASO (TX).

Who is the contractor on this award?

The obligated recipient is DEPLOYED RESOURCES LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $51.1 million.

What is the period of performance?

Start: 2022-12-21. End: 2024-12-09.

What specific features and functionalities differentiate these 'virtual processing stations' and 'phone booths' to justify the high cost?

The provided data lacks specific details on the features and functionalities that differentiate these 'virtual processing stations' and 'phone booths' to justify the substantial $51 million award. Typically, such stations might include integrated communication systems, biometric scanners, secure data ports, climate control, and robust security features. However, without a detailed breakdown of these components, their technological sophistication, and the specific operational requirements they are designed to meet at remote border locations, it is difficult to ascertain the value proposition. The term 'virtual processing station' could imply advanced technology integration, but the description as 'phone booths' suggests a simpler function. Further clarification from CBP on the technological specifications and the unique challenges these stations are intended to address would be necessary to fully understand the cost justification.

How does the $51 million contract value compare to similar prefabricated structure procurements by DHS or other agencies?

Comparing the $51 million contract value for prefabricated structures to similar procurements by DHS or other agencies is challenging without more granular data on the specific size, complexity, and features of the deployed units. However, general market rates for prefabricated metal buildings and modular structures suggest that this award is on the higher end, particularly if the units are primarily 'phone booths' and basic 'virtual processing stations.' For instance, large-scale modular building projects can run into tens of millions, but these often involve extensive facilities like barracks or administrative centers. Smaller, more standardized units typically cost significantly less per unit. The high total value may stem from the quantity of units, the specialized deployment requirements in remote border areas, or advanced technological integrations not fully detailed in the summary. A detailed cost-per-unit analysis against benchmark data would be crucial for a definitive comparison.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include cost overruns (despite being fixed-price, scope creep or unforeseen site conditions could impact the contractor's profitability and potentially lead to change orders), performance issues (delays in deployment, defects in the prefabricated structures, or failure to meet operational requirements), and limited competition leading to suboptimal pricing. Mitigation strategies likely involve rigorous contract oversight by CBP, including site inspections, quality assurance checks, and performance monitoring against defined milestones. The fixed-price nature inherently shifts some cost risk to the contractor. However, the limited competition aspect remains a potential risk for value for money, which might be mitigated through strong negotiation by the contracting officers and potentially by seeking competitive bids for future task orders if the BPA allows.

What is the track record of DEPLOYED RESOURCES LLC in fulfilling government contracts, particularly for similar infrastructure or border-related needs?

Information regarding the specific track record of DEPLOYED RESOURCES LLC in fulfilling government contracts, particularly for similar infrastructure or border-related needs, is not detailed in the provided data. To assess their capability and past performance, a review of their contract history with federal agencies, including past performance evaluations (e.g., CPARS reports), would be necessary. This would reveal their history of on-time delivery, quality of work, adherence to budget, and overall customer satisfaction. Without this information, it is difficult to gauge their reliability and experience in executing a contract of this magnitude and nature for U.S. Customs and Border Protection.

What are the historical spending patterns for prefabricated structures or border processing facilities by DHS?

Historical spending patterns for prefabricated structures or border processing facilities by DHS are not provided in the current data. To analyze this, one would need to examine past contract awards by CBP and other DHS components for similar types of infrastructure over several fiscal years. This analysis would involve identifying the frequency of such procurements, the average contract values, the types of contractors awarded these contracts, and the competition levels. Understanding historical spending can help contextualize the current $51 million award, revealing whether it represents an increase, decrease, or is consistent with previous investment levels in border infrastructure and processing capabilities.

Industry Classification

NAICS: Manufacturing › Architectural and Structural Metals Manufacturing › Prefabricated Metal Building and Component Manufacturing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 164 MCPIKE RD, ROME, NY, 13441

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $51,068,137

Exercised Options: $51,068,137

Current Obligation: $51,068,137

Actual Outlays: $51,068,137

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 70B01C21A00000012

IDV Type: BPA

Timeline