DHS awards $12M contract for Illinois security services to Paragon Systems Inc

Contract Overview

Contract Amount: $12,019,516 ($12.0M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2025-07-01

End Date: 2025-11-30

Contract Duration: 152 days

Daily Burn Rate: $79.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT THE STATE OF ILLINOIS

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60612

State: Illinois Government Spending

Plain-Language Summary

Department of Homeland Security obligated $12.0 million to PARAGON SYSTEMS INC for work described as: ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT THE STATE OF ILLINOIS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration is 152 days, indicating a short-term need for services. 3. The fixed-price contract type aims to control costs by establishing a set price. 4. The North American Industry Classification System (NAICS) code 561612 points to security guard services. 5. The award amount of $12,019,516.26 for a 152-day period warrants a review of per-diem costs. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

The contract value of approximately $12 million for a 152-day period for security services in Illinois appears substantial. Without comparable contract data for similar services in the same region and timeframe, it is difficult to definitively benchmark the value. However, the fixed-price nature of the contract suggests an attempt to manage cost certainty. Further analysis would require comparing the per-unit cost of services (e.g., per guard per hour) against industry standards and other government contracts for similar protective services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This typically suggests a robust bidding process where multiple companies had the opportunity to compete for the contract. The number of bidders is not specified, but the open competition is generally a positive sign for price discovery and potentially achieving a fair market price.

Taxpayer Impact: A full and open competition process is intended to ensure that taxpayer dollars are used efficiently by fostering a competitive environment that drives down prices.

Public Impact

The primary beneficiaries are the Department of Homeland Security (DHS) and its facilities or operations within the state of Illinois, which will receive protective security services. The services delivered include armed protective security officer (PSO) functions, ensuring physical security and safety. The geographic impact is focused on the state of Illinois. The contract supports the security workforce by providing employment opportunities for security personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed price does not adequately account for unforeseen operational challenges or increased labor costs during the contract period.
The short duration of the contract (152 days) may lead to higher per-unit costs compared to longer-term agreements due to mobilization and demobilization expenses.
Dependence on a single contractor for critical security services raises concerns about continuity of operations if the contractor faces performance issues or financial instability.

Positive Signals

Awarded through full and open competition, which generally promotes competitive pricing and a wider pool of qualified vendors.
The firm fixed-price contract type provides cost certainty for the government, limiting the risk of cost overruns.
The contractor, Paragon Systems Inc., is likely experienced in providing security services, given the nature of the award.

Sector Analysis

The security services sector is a significant component of government contracting, encompassing a wide range of protective and investigative services. NAICS code 561612 specifically covers security guards and patrol services. Government spending in this area is driven by the need to protect federal facilities, personnel, and assets. Benchmarks for this sector often involve comparing hourly rates for security personnel, supervisory costs, and overhead. The market is generally competitive, with numerous established providers.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, Paragon Systems Inc., may choose to subcontract portions of the work to small businesses as part of their overall business strategy, though this is not a requirement of this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting officer and contract specialists. Performance monitoring would likely involve regular reporting from the contractor and site visits to ensure services are delivered as specified. Accountability measures are inherent in the firm fixed-price contract, where payment is contingent on satisfactory performance. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
State-Specific Security Guard Contracts
Armed Security Personnel Contracts

Risk Flags

Short contract duration may lead to higher per-unit costs.
Potential for contractor to reduce service quality to maintain profit margins under fixed-price.
Dependence on contractor for critical security functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $12.0 million to PARAGON SYSTEMS INC. ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES THROUGHOUT THE STATE OF ILLINOIS

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS 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 $12.0 million.

What is the period of performance?

Start: 2025-07-01. End: 2025-11-30.

What is the historical spending pattern of the Department of Homeland Security on security guard services in Illinois?

Analyzing historical spending for security guard services by DHS in Illinois requires access to detailed federal procurement data. Typically, agencies like DHS award numerous contracts for security services across various states and over different time periods. To assess historical patterns, one would look at the total dollar amount spent annually on NAICS code 561612 (Security Guards and Patrol Services) within Illinois, identify the primary contractors, and note the average contract duration and value. This analysis would reveal trends in spending, identify key players in the Illinois security market for DHS, and highlight any significant increases or decreases in demand for these services. Without specific historical data for this contract or category, it's challenging to provide precise figures, but such analysis is crucial for understanding budget allocation and contractor reliance.

How does the per-diem cost of this contract compare to similar security service contracts awarded by DHS in other states?

To compare the per-diem cost, we first calculate the daily cost of this contract: $12,019,516.26 / 152 days = $78,944.19 per day. This daily cost encompasses all services provided by the security personnel. A comprehensive comparison would involve identifying other DHS contracts for armed protective security services awarded within a similar timeframe (e.g., last 1-2 years) in different states, noting their total contract value, duration, and the number of personnel or hours contracted. The goal is to normalize the data by calculating a 'per-guard-per-hour' or 'per-guard-per-day' rate. If this contract's calculated daily rate, when normalized for personnel or hours, is significantly higher than the average or median rates of comparable contracts, it could indicate potential overpricing or a higher cost of service delivery in Illinois. Conversely, a lower rate might suggest favorable pricing or a more efficient service model.

What is Paragon Systems Inc.'s track record with the Department of Homeland Security and other federal agencies for providing security services?

Paragon Systems Inc. has a significant history of contracting with federal agencies, including the Department of Homeland Security (DHS), for protective security services. A review of public federal procurement databases (like USASpending.gov) would reveal the extent of their awards, the types of services rendered, and their performance history. Key aspects to examine include the number and value of past contracts, any instances of contract terminations, performance evaluations (if publicly available), and any significant disputes or litigation. A strong track record with multiple agencies, particularly DHS, suggests established capabilities and familiarity with federal requirements. Conversely, a history of poor performance, frequent contract modifications due to issues, or significant penalties could raise concerns about their ability to successfully execute this current contract.

What are the specific risks associated with a short-duration (152-day) contract for armed protective security services?

Short-duration contracts for armed protective security services present several risks. Firstly, the mobilization and demobilization costs for personnel and equipment can be disproportionately high, potentially leading to a higher per-unit cost compared to longer-term contracts. Secondly, there's a risk of reduced contractor investment in training and retention, as the contractor may not see long-term value in extensive development for a temporary engagement. This could lead to less experienced personnel on site. Thirdly, continuity of service can be a concern; if the need extends beyond the initial period, a new procurement process would be required, potentially leading to a gap in security coverage. Finally, for the government, managing multiple short-term contracts can be administratively burdensome compared to overseeing a single, longer-term agreement.

How does the firm fixed-price contract type influence the risk allocation between the government and Paragon Systems Inc. for this security contract?

A firm fixed-price (FFP) contract type places the majority of the cost risk on the contractor, Paragon Systems Inc. Under an FFP agreement, the contractor is obligated to perform the specified services for the agreed-upon price, regardless of their actual costs incurred. If Paragon's costs for labor, equipment, or other operational expenses exceed their initial estimates, their profit margin will decrease, or they could incur a loss. Conversely, if they manage their costs efficiently and complete the work for less than the fixed price, their profit will increase. This contract type incentivizes the contractor to control costs and operate efficiently. For the government, the primary risk is that the contractor may cut corners on quality or service to maintain profitability if their cost estimates were inaccurate, although performance standards and oversight are in place to mitigate this.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Securitas AB

Address: 13900 LINCOLN PARK DR STE 300, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $12,019,516

Exercised Options: $12,019,516

Current Obligation: $12,019,516

Actual Outlays: $4,074,002

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFP418DE5000001

IDV Type: IDC

Timeline