Homeland Security contract for protective services in Los Angeles awarded to Paragon Systems Inc. for over $39 million

Contract Overview

Contract Amount: $39,393,409 ($39.4M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2019-10-28

End Date: 2020-09-30

Contract Duration: 338 days

Daily Burn Rate: $116.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES FOR LOS ANGELES CALIFORNIA

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90012

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $39.4 million to PARAGON SYSTEMS INC for work described as: ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES FOR LOS ANGELES CALIFORNIA Key points: 1. The contract value of over $39 million represents a significant investment in protective services for a major metropolitan area. 2. The award to a single contractor, Paragon Systems Inc., warrants an examination of competition dynamics and potential for price optimization. 3. The fixed-firm price contract structure suggests a defined scope and budget, but requires careful monitoring for scope creep or cost overruns. 4. The duration of the contract (338 days) indicates a need for ongoing, consistent service delivery. 5. The North American Industry Classification System (NAICS) code 561612 points to a specialized service sector focused on security and patrol. 6. The contract's geographic focus on Los Angeles highlights the concentration of federal protective service needs in key urban centers.

Value Assessment

Rating: fair

The total award of $39,393,409.27 for approximately one year of service appears substantial. Benchmarking against similar contracts for protective security services in large metropolitan areas would be necessary to definitively assess value for money. Without comparative data on per-guard costs or service levels, it is difficult to ascertain if this pricing is competitive. The firm-fixed-price nature suggests a defined cost, but the overall expenditure warrants scrutiny to ensure efficiency and prevent potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach is generally favorable for price discovery and ensuring a competitive market. The number of bidders and the specific evaluation criteria would provide further insight into the robustness of the competition. A competitive process should theoretically lead to a more favorable price for the government.

Taxpayer Impact: Full and open competition suggests that taxpayers benefit from a potentially lower price due to market forces driving down bids. It also implies that the government sought the best value across a wide range of qualified providers.

Public Impact

Federal facilities and personnel in the Los Angeles area are protected by the services rendered under this contract. The contract ensures the continuity of essential security operations for the Department of Homeland Security in a critical region. The services provided contribute to the overall safety and security infrastructure of the Los Angeles metropolitan area. The contract supports jobs within the private security sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor over-reliance given the large contract value and single award.
Need for robust performance monitoring to ensure service quality meets federal standards.
Risk of price escalation in future contract renewals if competition is not maintained.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Clear geographic focus allows for concentrated service delivery and oversight.

Sector Analysis

The security services sector is a significant component of the broader professional, scientific, and technical services industry. This contract falls under the Security Guards and Patrol Services (NAICS 561612) category. The federal government is a major consumer of these services, particularly for protecting federal buildings, personnel, and critical infrastructure. Spending in this sector can fluctuate based on threat assessments and agency needs, with large contracts often concentrated in major urban centers like Los Angeles.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Paragon Systems Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award. Future solicitations could explore opportunities for small business participation to foster a more diverse contracting ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of Homeland Security's Office of Procurement Operations. Performance metrics and quality assurance surveillance plans are standard mechanisms to ensure accountability. Transparency is facilitated through contract award databases like FPDS. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for single-contractor dependency
Need for rigorous performance monitoring
Geographic concentration of risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $39.4 million to PARAGON SYSTEMS INC. ARMED PROTECTIVE SECURITY OFFICER (PSO) SERVICES FOR LOS ANGELES CALIFORNIA

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 $39.4 million.

What is the period of performance?

Start: 2019-10-28. End: 2020-09-30.

What is the historical spending pattern for protective security services by the Department of Homeland Security in the Los Angeles area?

Analyzing historical spending for protective security services by DHS in Los Angeles requires access to detailed federal procurement data over multiple fiscal years. While this specific contract award is for $39.4 million, understanding the broader trend involves looking at previous contracts awarded to various entities for similar services in the same geographic region. Factors such as changes in threat levels, shifts in federal facility security requirements, and the consolidation or expansion of DHS operations would influence historical spending. Without a longitudinal dataset, it's challenging to identify specific patterns, but generally, spending in this sector can be influenced by national security priorities and the operational footprint of federal agencies within major urban centers.

How does the per-guard cost of this contract compare to industry benchmarks for similar services in Southern California?

Determining the per-guard cost requires knowing the number of guards and their hours worked under the contract, which is not explicitly provided in the summary data. However, if we assume a standard 40-hour work week per guard and an average annual salary plus benefits, we could estimate a range. Industry benchmarks for unarmed security guards in major metropolitan areas like Los Angeles can vary significantly based on experience, licensing, and specific duties. Typical rates might range from $30-$60 per hour, translating to an annual cost per guard of $62,400 to $124,800 (assuming full-time employment). To accurately benchmark, one would need to compare the contract's effective hourly rate (total contract value divided by total labor hours) against prevailing market rates for comparable security personnel in the region.

What is Paragon Systems Inc.'s track record with federal contracts, particularly for security services?

Paragon Systems Inc. has a significant history of securing federal contracts, primarily within the security services domain. A review of federal procurement databases would reveal numerous awards to Paragon Systems across various agencies, including the Department of Defense, Department of Justice, and Department of Homeland Security. Their track record often includes contracts for armed and unarmed protective security officers, access control, and other security-related services. Analyzing past performance ratings, any contract disputes, or instances of corrective actions would provide a more comprehensive view of their reliability and effectiveness as a federal contractor. Their consistent awards suggest a strong capability in meeting federal security requirements.

What are the key performance indicators (KPIs) used to evaluate the effectiveness of the protective security services provided under this contract?

Key Performance Indicators (KPIs) for protective security services contracts typically focus on ensuring the safety and security of personnel and facilities. Common KPIs include response times to incidents, adherence to post orders, guard presence and punctuality, incident reporting accuracy and timeliness, and the successful prevention of unauthorized access or security breaches. For armed services, metrics related to firearms proficiency and adherence to use-of-force policies are critical. The government's Quality Assurance Surveillance Plan (QASP) would detail these KPIs and the methods for monitoring and evaluating the contractor's performance against them. Failure to meet these KPIs could result in contract deficiencies or penalties.

Are there any specific risks associated with relying on a single contractor for essential protective services in a high-traffic area like Los Angeles?

Relying on a single contractor, even one awarded through full and open competition, presents inherent risks. These include potential complacency leading to reduced service quality over time, a lack of competitive pressure to innovate or improve efficiency, and significant disruption should the contractor face financial difficulties, labor disputes, or fail to meet performance standards. In a high-traffic area like Los Angeles, where federal presence is substantial, a sudden interruption of services could have serious security implications. Mitigating these risks involves robust contract management, continuous performance monitoring, clear contingency plans, and ensuring strong communication channels with the contractor.

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: SRS Critical Infrastructure Security LLC (UEI: 355790924)

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: $39,393,409

Exercised Options: $39,393,409

Current Obligation: $39,393,409

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFPW18DW9000001

IDV Type: IDC

Timeline