HHS awards $152.6M for armed guard services, with Paragon Systems Inc. securing the contract

Contract Overview

Contract Amount: $152,566,879 ($152.6M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-02-22

End Date: 2025-08-21

Contract Duration: 2,007 days

Daily Burn Rate: $76.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: ARMED GUARD SERVICES

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $152.6 million to PARAGON SYSTEMS INC for work described as: ARMED GUARD SERVICES Key points: 1. Value for money assessed through comparison with similar contracts and market rates. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and the nature of armed guard services. 4. Performance context relies on the contractor's track record and service delivery. 5. Sector positioning within security services highlights a critical need for protection. 6. The contract's value is significant within the broader federal security services landscape.

Value Assessment

Rating: good

The contract value of $152.6 million over its period of performance appears reasonable for comprehensive armed guard services across multiple locations. Benchmarking against similar federal contracts for security personnel suggests that the pricing is within expected ranges, especially considering the specialized nature of armed guards and the duration of the contract. The 'Time and Materials' pricing structure, while common, requires diligent oversight to ensure costs remain controlled and reflect efficient service delivery. Without specific cost breakdowns, a definitive value-for-money assessment is challenging, but the overall award size is not an immediate outlier.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The number of bidders is not specified, but a full and open process generally suggests a competitive environment. This approach is designed to foster price discovery and ensure the government receives the best value by considering a wide range of potential providers. The success of this competition in driving down costs would depend on the number and quality of the bids received.

Taxpayer Impact: A full and open competition is the most advantageous for taxpayers as it maximizes the potential for competitive pricing and ensures that the government is not limited to a single provider, thereby preventing potential price gouging.

Public Impact

Federal facilities and personnel, particularly those managed by the Office of Assistant Secretary for Preparedness and Response (ASPR), benefit from enhanced security. Services delivered include armed guarding and patrol, ensuring physical security and deterring threats. The geographic impact is likely nationwide, supporting various HHS facilities and operations. Workforce implications include the direct employment of security personnel by the contractor, Paragon Systems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended duration of the contract (over 5 years) could lead to potential cost increases if not managed effectively.
Reliance on 'Time and Materials' pricing requires robust oversight to prevent scope creep and ensure efficient labor utilization.
The need for armed guards suggests a potentially high-risk environment requiring constant vigilance and preparedness.
Contract performance monitoring is crucial to ensure consistent service quality and adherence to security protocols.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable pricing.
The contractor, Paragon Systems Inc., has a history of performing federal contracts, indicating experience in this domain.
The contract addresses a critical need for security within the Department of Health and Human Services.
The specified period of performance allows for stable security coverage over an extended period.

Sector Analysis

The federal security services market is substantial, encompassing a wide range of protective services for government facilities and personnel. This contract falls within the Security Guards and Patrol Services (NAICS 561612) industry. Spending in this sector is driven by the government's mandate to protect its assets and personnel. Comparable spending benchmarks would involve analyzing other large federal contracts for armed guard services across various agencies, considering factors like geographic scope, service level requirements, and contract duration. The market is competitive, with numerous established players vying for these essential service contracts.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. The data indicates the prime contractor is Paragon Systems Inc. There is no explicit information regarding subcontracting plans for small businesses within this award. The absence of a set-aside or specific subcontracting goals means that the direct impact on the small business ecosystem for this particular contract may be limited unless the prime contractor voluntarily engages small businesses for support services.

Oversight & Accountability

Oversight for this contract is primarily the responsibility of the Department of Health and Human Services (HHS), specifically the Office of Assistant Secretary for Preparedness and Response (ASPR). The contract type (Time and Materials) necessitates close monitoring of labor hours and material costs to ensure compliance and prevent overruns. Accountability measures would include performance reviews, adherence to service level agreements, and potential penalties for non-performance. Transparency is generally maintained through contract databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
General Services Administration Schedules for Security Services
Department of Defense Guard Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Need for robust oversight to ensure contractor performance meets security requirements.
Long contract duration may limit flexibility in adapting to evolving security needs.
Reliance on armed personnel necessitates strict vetting and management protocols.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $152.6 million to PARAGON SYSTEMS INC. ARMED GUARD SERVICES

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $152.6 million.

What is the period of performance?

Start: 2020-02-22. End: 2025-08-21.

What is the track record of Paragon Systems Inc. in performing similar federal contracts for armed guard services?

Paragon Systems Inc. has a significant history of performing federal contracts, including those for security guard and patrol services across various agencies. Their experience often involves providing armed and unarmed guards, access control, and physical security measures for government facilities. Analyzing their past performance on similar contracts, particularly those with the Department of Health and Human Services or other civilian agencies, would reveal their ability to meet security requirements, manage personnel effectively, and adhere to contract terms. Past performance evaluations, if available through federal databases or agency reports, would provide crucial insights into their reliability, responsiveness, and overall success in delivering these critical services. Their sustained presence in the federal contracting space suggests a capacity to meet the demanding requirements of such roles.

How does the awarded amount compare to the duration and scope of services provided?

The awarded amount of $152.6 million over approximately five years (February 2020 to August 2025) translates to an average annual value of roughly $30.5 million. This figure needs to be evaluated against the scope of services, which includes armed guard services for the Department of Health and Human Services. The scope likely encompasses multiple locations, varying post requirements (e.g., number of guards, hours of operation), and potentially specialized security needs related to HHS's mission. Without a detailed breakdown of guard hours, post orders, and specific security protocols, a precise value-for-money comparison is difficult. However, considering the critical nature of security for health and human services facilities, and the costs associated with employing and equipping armed personnel, the annual average appears to be within a plausible range for comprehensive security coverage.

What are the primary risks associated with a 'Time and Materials' contract for armed guard services?

The primary risk associated with a 'Time and Materials' (T&M) contract for armed guard services is the potential for cost overruns due to a lack of a fixed ceiling on labor hours and material costs. Unlike fixed-price contracts, T&M agreements can incentivize contractors to extend service delivery or increase labor hours if not meticulously monitored. For armed guard services, this could manifest as inflated billing for guard hours, unnecessary overtime, or excessive charges for equipment and supplies. Effective risk mitigation requires robust government oversight, including detailed timesheet verification, regular performance reviews, and strict adherence to the contract's ceiling limitations. Clear definitions of billable hours and materials, along with strong communication channels between the government and contractor, are essential to manage these risks and ensure value for taxpayer money.

How does the 'full and open competition' award mechanism impact price discovery and taxpayer value?

A 'full and open competition' award mechanism is designed to maximize price discovery and enhance taxpayer value by allowing all responsible sources to submit bids. This broad competition increases the likelihood that multiple qualified contractors will vie for the contract, driving down prices through market forces. The government benefits from a wider pool of potential solutions and pricing structures, enabling it to select the offer that provides the best overall value, considering both cost and technical factors. For taxpayers, this process generally leads to more competitive pricing than sole-source or limited competition awards, as contractors are incentivized to offer their most favorable terms to win the contract. The effectiveness of this mechanism is amplified when the solicitation clearly defines requirements and evaluation criteria, ensuring that bids are comparable and the best value is truly identified.

What are the potential implications of the contract's duration (over 5 years) on service quality and cost?

A contract duration exceeding five years, as seen in this award (February 2020 to August 2025), offers stability and continuity for essential services like armed guard provision. For the government, this extended period can reduce the administrative burden and costs associated with frequent re-procurement processes. It also allows the contractor, Paragon Systems Inc., to invest in training, equipment, and personnel, potentially leading to improved service quality and a more experienced workforce. However, a long duration also carries risks. It can reduce flexibility to adapt to changing security needs or technological advancements. Furthermore, if not managed diligently, costs could escalate over time, especially under a Time and Materials structure, potentially leading to less favorable pricing in later years compared to shorter, more frequent contract cycles. Regular performance reviews and contract modifications are crucial to manage these long-term implications.

Are there specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

While the provided data does not explicitly list specific Key Performance Indicators (KPIs) or performance metrics for this armed guard services contract, such metrics are standard practice for federal service contracts. Typically, for security services, KPIs would focus on areas such as guard response times to incidents, adherence to post orders, personnel reliability (e.g., attendance, punctuality), successful completion of required training, and incident reporting accuracy. The 'Time and Materials' nature of the contract underscores the importance of rigorous performance monitoring to ensure that the hours billed correspond directly to effective service delivery. The contracting officer's representative (COR) would be responsible for tracking these metrics and ensuring that Paragon Systems Inc. meets or exceeds the established performance standards throughout the contract's duration.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75A50120Q00001

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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, HUBZone Firm, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $207,168,273

Exercised Options: $152,566,879

Current Obligation: $152,566,879

Actual Outlays: $115,912,563

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS07F0418K

IDV Type: FSS

Timeline