DHS awards $33.2M for security services in Puerto Rico and USVI, with 2 bidders competing

Contract Overview

Contract Amount: $33,256,260 ($33.3M)

Contractor: CDA Inc

Awarding Agency: Department of Homeland Security

Start Date: 2025-01-01

End Date: 2028-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $22.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TASK ORDER UNDER MULTIPLE AWARD CONTRACT 70RFP224DEC000009 FOR PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT PUERTO RICO AND THE U.S. VIRGIN ISLANDS.

Place of Performance

Location: SAN JUAN, SAN JUAN County, PUERTO RICO, 00907

Plain-Language Summary

Department of Homeland Security obligated $33.3 million to CDA INC for work described as: TASK ORDER UNDER MULTIPLE AWARD CONTRACT 70RFP224DEC000009 FOR PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT PUERTO RICO AND THE U.S. VIRGIN ISLANDS. Key points: 1. The contract value of $33.2 million over four years suggests a moderate annual spend for protective security services. 2. With two bidders, the competition level indicates a potentially constrained but not entirely limited market for these services. 3. The firm-fixed-price contract type shifts risk to the contractor, potentially leading to more predictable costs. 4. Services are concentrated in Puerto Rico and the U.S. Virgin Islands, indicating a specific geographic focus. 5. The North American Industry Classification System (NAICS) code 561612 points to a standard security guard and patrol service requirement.

Value Assessment

Rating: good

The contract's total value of $33.2 million over four years averages to approximately $8.3 million annually. Benchmarking this against similar large-scale protective security contracts requires access to proprietary databases. However, the presence of two bidders suggests a competitive environment that likely kept pricing within reasonable market parameters. The firm-fixed-price structure further supports value by ensuring cost certainty for the government.

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. Two bids were received, suggesting that while the competition was open, the number of capable and interested parties for this specific scope and geographic area was limited. This level of competition is generally sufficient to ensure some price discovery and contractor accountability.

Taxpayer Impact: A full and open competition, even with two bidders, is generally favorable for taxpayers as it encourages competitive pricing and allows for a broader pool of potential contractors to be considered, potentially leading to better value.

Public Impact

The Department of Homeland Security (DHS) will benefit from enhanced security coverage in Puerto Rico and the U.S. Virgin Islands. Protective Security Officer (PSO) services will be delivered, ensuring a physical security presence at various government facilities. The geographic impact is concentrated on the islands of Puerto Rico and the U.S. Virgin Islands, addressing specific regional security needs. The contract supports jobs for security personnel within these regions, contributing to the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) could potentially lead to higher prices than a more robust bidding process.
Geographic concentration might limit opportunities for contractors not already established in Puerto Rico or the U.S. Virgin Islands.
The firm-fixed-price nature requires careful contractor performance monitoring to ensure service quality is maintained.

Positive Signals

Full and open competition process allows for a fair evaluation of all eligible offerors.
Firm-fixed-price contract type transfers cost overrun risk to the contractor.
The contract duration of four years provides stability for both the agency and the contractor.

Sector Analysis

The security services sector is a significant component of the federal contracting landscape, encompassing a wide range of protective and investigative services. NAICS code 561612 specifically covers security guards and patrol services. Federal spending in this area is driven by the need to protect government assets, personnel, and facilities. While specific market size data for PSO services in Puerto Rico and the U.S. Virgin Islands is not readily available, the overall federal spending on security services is substantial, often involving multiple award contracts to ensure flexibility and rapid response capabilities.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. The prime contractor, CDA Inc., is likely a larger entity. There is no explicit mention of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem for this specific award appears minimal, though the prime contractor's own subcontracting practices would determine any indirect effects.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Homeland Security's Office of Procurement Operations, which awarded the task order. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver services at a set price. Transparency is facilitated through the federal procurement data system where contract awards are reported. Specific Inspector General jurisdiction would typically fall under DHS OIG, responsible for investigating fraud, waste, and abuse within the department.

Related Government Programs

Protective Security Officer Services
Department of Homeland Security Contracts
Security Guard Services
Federal Law Enforcement Support

Risk Flags

Limited competition
Geographic concentration
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $33.3 million to CDA INC. TASK ORDER UNDER MULTIPLE AWARD CONTRACT 70RFP224DEC000009 FOR PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT PUERTO RICO AND THE U.S. VIRGIN ISLANDS.

Who is the contractor on this award?

The obligated recipient is CDA INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $33.3 million.

What is the period of performance?

Start: 2025-01-01. End: 2028-12-31.

What is the historical spending pattern for Protective Security Officer (PSO) services by the Department of Homeland Security in Puerto Rico and the U.S. Virgin Islands?

Analyzing historical spending requires access to detailed federal procurement databases beyond the provided summary. However, the award of a new 4-year, $33.2 million contract suggests a sustained need for PSO services in these regions. Previous contracts for similar services would likely have been awarded to ensure continuous security operations. The total value of this new award, averaging over $8 million annually, indicates a significant and ongoing requirement. Without specific historical data, it's difficult to determine if this represents an increase, decrease, or stable level of spending compared to prior periods. Factors such as changes in security threats, facility requirements, and agency priorities would influence historical spending levels.

How does the per-hour cost of Protective Security Officers under this contract compare to industry benchmarks for similar services in Puerto Rico and the U.S. Virgin Islands?

The provided data does not include the number of hours or the specific hourly rates for the Protective Security Officers (PSOs). To perform a per-hour cost comparison, we would need to divide the total contract value ($33,256,260.02) by the total estimated hours or the total duration in hours. Assuming a standard 40-hour work week over the 4-year period (approximately 8,320 hours per PSO position, or significantly more if multiple PSOs are employed), and considering the contract duration of 1460 days (4 years), we could estimate an average annual cost per position. However, without knowing the exact number of PSOs required or their specific hours, a precise per-hour benchmark is not feasible. Industry benchmarks for security guards can vary widely based on experience, certifications, and location, but typically range from $20-$50+ per hour for unarmed guards, and higher for armed or specialized personnel.

What is the track record of CDA Inc. in performing similar federal security contracts, particularly those involving significant value or geographic scope?

CDA Inc. has a track record of performing federal contracts, including security services. To assess their performance on similar contracts, a review of their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would be necessary. This would reveal their history regarding cost, schedule, technical performance, and management. The fact that they were awarded this task order under a multiple-award contract suggests they met the initial qualifications. However, the specific scope and value of this $33.2 million, 4-year contract for PSO services in Puerto Rico and the U.S. Virgin Islands requires detailed examination of their prior experience in large-scale, geographically dispersed security operations to fully gauge their capability and reliability.

What are the potential risks associated with relying on only two bidders for essential security services in these territories?

Relying on only two bidders for essential security services presents several potential risks. Firstly, it reduces the government's leverage in price negotiations, potentially leading to higher costs than if there were more competition. Secondly, it increases the risk of service disruption if one of the contractors experiences financial difficulties, operational issues, or decides to exit the market. This could leave the agency with limited options for continuity of services. Thirdly, a lack of robust competition might reduce the incentive for contractors to innovate or exceed performance expectations, as their market position is less threatened. Finally, it could indicate barriers to entry for other potential providers, possibly due to specialized requirements or established relationships.

How does the firm-fixed-price (FFP) contract type influence the management of this security services contract for DHS?

The Firm-Fixed-Price (FFP) contract type places the primary responsibility for managing costs and potential overruns on the contractor, CDA Inc. This is generally advantageous for the government (DHS) as it provides cost certainty and predictability. DHS knows the total amount it will pay, barring any contract modifications or disputes. For CDA Inc., it means they must accurately estimate all costs associated with providing PSO services, including labor, benefits, training, equipment, and overhead, and build in a contingency for unforeseen issues. The risk for CDA Inc. is that if their costs exceed their fixed price, their profit margin will decrease or they could incur a loss. Conversely, if they manage their costs efficiently, their profit margin could be higher. This structure incentivizes the contractor to be highly efficient and cost-conscious in their operations.

What are the implications of the geographic focus on Puerto Rico and the U.S. Virgin Islands for service delivery and contractor operations?

The geographic focus on Puerto Rico and the U.S. Virgin Islands has several implications. For service delivery, it means the contractor must establish a robust operational presence and logistical network across these islands to ensure consistent coverage and rapid response. This may involve hiring and training local personnel, managing transportation between islands, and understanding local regulations and cultural nuances. For contractor operations, it could present challenges related to remote management, supply chain logistics, and potentially higher operational costs due to the island locations. However, it also allows the contractor to specialize and build expertise in serving these specific regions, potentially leading to more effective and tailored security solutions for DHS facilities located there.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70RFP124QE2000004

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 185 ADMIRAL COCHRANE DR STE 220, ANNAPOLIS, MD, 21401

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

Financial Breakdown

Contract Ceiling: $82,769,400

Exercised Options: $33,256,260

Current Obligation: $33,256,260

Actual Outlays: $11,924,852

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFP224DEC000009

IDV Type: IDC

Timeline