DHS awards $71.6M contract for security guards in Alaska, raising value-for-money questions

Contract Overview

Contract Amount: $71,571,581 ($71.6M)

Contractor: Paragon Professional Services LLC

Awarding Agency: Department of Homeland Security

Start Date: 2024-09-30

End Date: 2025-09-29

Contract Duration: 364 days

Daily Burn Rate: $196.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EL PASO SPC GUARD SERVICES CONTRACT

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Homeland Security obligated $71.6 million to PARAGON PROFESSIONAL SERVICES LLC for work described as: EL PASO SPC GUARD SERVICES CONTRACT Key points: 1. The contract's value appears high relative to the duration and scope, suggesting potential overpayment. 2. Limited competition raises concerns about price discovery and potential for inflated costs. 3. The firm-fixed-price structure offers some cost certainty but may not incentivize efficiency. 4. Performance context is limited due to the 'NOT AVAILABLE FOR COMPETITION' award type. 5. The contract falls within the security services sector, a common area for federal spending. 6. The lack of small business set-aside or subcontracting requirements is noted.

Value Assessment

Rating: questionable

The awarded amount of $71.6 million for a one-year contract for security guards in Alaska seems disproportionately high. Benchmarking against similar contracts for security services, especially those with a firm-fixed-price structure, is crucial. Without more detailed service requirements or performance metrics, it is difficult to definitively assess value, but the per-diem cost implied by this award is likely elevated compared to market rates for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This severely limits the opportunity for competitive bidding, which is essential for ensuring the government receives the best possible pricing and service. The absence of multiple bidders means that price discovery is not driven by market forces, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards prevent taxpayers from benefiting from competitive pricing, as the government does not have multiple offers to choose from. This can result in paying a premium for goods or services.

Public Impact

The primary beneficiaries are the U.S. Immigration and Customs Enforcement (ICE) and potentially other Department of Homeland Security (DHS) components operating in Alaska. The contract delivers essential security guard and patrol services to protect federal facilities and personnel. The geographic impact is concentrated within Alaska, where the services are to be performed. The contract supports the workforce employed by PARAGON PROFESSIONAL SERVICES LLC, providing jobs in the security sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a single year raises concerns about cost-effectiveness.
Sole-source award limits competition, potentially inflating prices.
Lack of transparency in the justification for sole-source award.
Firm-fixed-price contract may not incentivize optimal performance or cost savings.
No indication of small business participation or subcontracting goals.

Positive Signals

Contract provides essential security services for a critical government agency.
Firm-fixed-price contract offers budget predictability for the agency.
The contractor, PARAGON PROFESSIONAL SERVICES LLC, is awarded the contract.

Sector Analysis

The security services industry is a significant component of the federal contracting landscape, encompassing a wide range of services from physical guarding to cybersecurity. Federal spending in this sector is consistently high, driven by the need to protect government assets and personnel. This contract for security guards and patrol services falls under the North American Industry Classification System (NAICS) code 561612. Comparable spending benchmarks for similar security contracts can vary widely based on location, scope, and duration, but the scale of this award warrants scrutiny.

Small Business Impact

This contract does not appear to include any specific provisions for small business set-asides or subcontracting goals. The award to PARAGON PROFESSIONAL SERVICES LLC, a single entity, suggests that opportunities for small businesses to participate in this specific contract are limited. This could mean a missed opportunity to foster small business growth within the federal contracting ecosystem for security services in Alaska.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Immigration and Customs Enforcement (ICE) contracting officers and program managers. Transparency regarding the justification for the sole-source award and the performance metrics will be key indicators of effective oversight. The Department of Homeland Security's Office of Inspector General (OIG) may also conduct audits or investigations into contract spending and performance if concerns arise.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
Alaska Federal Security Contracts
Guard Services Contracts

Risk Flags

Sole-source award raises concerns about competition and pricing.
High contract value for a one-year duration requires scrutiny.
Lack of transparency regarding justification for sole-source award.
Potential for inflated costs due to limited market pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $71.6 million to PARAGON PROFESSIONAL SERVICES LLC. EL PASO SPC GUARD SERVICES CONTRACT

Who is the contractor on this award?

The obligated recipient is PARAGON PROFESSIONAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $71.6 million.

What is the period of performance?

Start: 2024-09-30. End: 2025-09-29.

What is the specific justification provided by DHS for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source procurements. Typically, such justifications are based on factors like urgent and compelling needs, unique capabilities of a specific contractor, or the unavailability of other sources. Without access to the official justification document (e.g., a Justification and Approval - J&A), the precise reasons remain unknown. However, common rationales include situations where only one contractor possesses the necessary security clearances, specialized equipment, or geographic presence to meet immediate operational requirements, especially in remote locations like Alaska. The lack of competition inherently raises concerns about whether these justifications were thoroughly vetted and if alternative solutions were adequately explored.

How does the awarded amount compare to historical spending on similar security guard services by ICE or DHS in Alaska?

Historical spending data for similar security guard services by ICE or DHS in Alaska is not provided in the initial data. However, a contract value of $71.6 million for a single year of security guard services is substantial. To perform a meaningful comparison, one would need to analyze past contracts for security services in Alaska, considering factors such as the number of guards required, hours of service, specific security levels, and contract duration. Benchmarking against contracts awarded through full and open competition for similar services in comparable geographic regions would also be informative. The current data suggests a potentially high cost per guard per day, which warrants further investigation into historical spending patterns and market rates.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. These are critical components that define the expected quality and standards of service delivery for security guards and patrol services. Typically, KPIs might include response times to incidents, adherence to post orders, guard attentiveness, incident reporting accuracy, and personnel reliability. SLAs would outline the consequences of failing to meet these standards, such as performance deductions or contract termination clauses. The absence of this information in the summary data makes it difficult to assess how the contractor's performance will be measured and managed, which is a crucial aspect of contract oversight.

What is the estimated cost per guard per day or per hour, and how does this benchmark against industry standards?

To estimate the cost per guard per day, we would need to know the number of guards and the total hours of service covered by the $71.6 million contract. Assuming a standard 24/7 operation for 365 days with a hypothetical number of guards, the cost could be calculated. For instance, if the contract covers 100 guards working 12-hour shifts, that's 2400 guard-hours per day. Over 365 days, that's 876,000 guard-hours. Dividing the total contract value ($71,571,580.90) by the total hours ($876,000) yields an approximate hourly rate of $81.70. This rate would need to be benchmarked against industry standards for security guards in Alaska, considering factors like prevailing wages, benefits, overhead, and profit margins. Without knowing the exact number of guards and hours, this calculation is speculative, but the overall contract value suggests a potentially high per-unit cost.

Are there any provisions for contract termination for convenience or for default, and what are the implications?

The provided data does not specify the contract termination clauses. However, federal contracts typically include provisions for termination for convenience (allowing the government to terminate the contract for its own convenience, usually with compensation to the contractor) and termination for default (allowing the government to terminate due to the contractor's failure to perform). The presence and specific terms of these clauses are important for risk management. Termination for convenience offers flexibility to the government if needs change, while termination for default protects against contractor underperformance. The implications depend on the specific wording, but both are standard risk mitigation tools in federal contracting.

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

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3301 C ST, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $71,571,581

Exercised Options: $71,571,581

Current Obligation: $71,571,581

Actual Outlays: $56,405,446

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70CDCR22D00000012

IDV Type: IDC

Timeline