HHS awards $18M contract for guard services, with a significant portion allocated to a single vendor

Contract Overview

Contract Amount: $18,054,086 ($18.1M)

Contractor: Cape FOX Facilities Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-05-01

End Date: 2025-07-30

Contract Duration: 1,916 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FUNDING FOR GUARD SERVICES AT RML

Place of Performance

Location: HAMILTON, RAVALLI County, MONTANA, 59840

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $18.1 million to CAPE FOX FACILITIES SERVICES, LLC for work described as: FUNDING FOR GUARD SERVICES AT RML Key points: 1. The contract value of $18.05 million over its period of performance suggests a substantial need for security services. 2. The contract type, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', indicates a competitive process but with specific limitations. 3. The award to CAPE FOX FACILITIES SERVICES, LLC warrants scrutiny regarding their past performance and pricing competitiveness. 4. The duration of 1916 days (approximately 5.25 years) allows for long-term planning but also carries risks of cost escalation or performance degradation. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted to boost small business participation. 6. The primary service area is Montana (MT), indicating a localized need for these security services.

Value Assessment

Rating: fair

Benchmarking the value of this $18.05 million contract for guard services is challenging without specific per-unit cost data or comparable contract details. However, the duration of over five years suggests a need for consistent service delivery. The firm-fixed-price structure provides cost certainty for the government, but the ultimate value depends on the quality and effectiveness of the security provided by Cape Fox Facilities Services, LLC. Further analysis would require comparing the proposed rates to industry benchmarks for similar security services in Montana.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This designation implies that while the competition was intended to be open, certain sources were excluded, potentially limiting the pool of bidders. The exact reasons for exclusion are not detailed here, but it suggests a specific justification was provided. The number of bidders is not specified, making it difficult to fully assess the level of competition and its impact on price discovery.

Taxpayer Impact: The limited competition may have resulted in less aggressive pricing than a truly full and open competition, potentially leading to higher costs for taxpayers. However, if the exclusions were justified by specific technical requirements or past performance, the chosen vendor might offer superior value despite potentially higher costs.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) facilities in Montana, which will receive security guard and patrol services. The contract ensures the physical security and safety of government property and personnel at these NIH locations. The geographic impact is concentrated in Montana, supporting local employment through the contractor's operations. The services delivered are critical for maintaining a secure research and operational environment at the specified NIH sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for unforeseen operational challenges over its long duration.
Risk of service quality degradation if contractor performance is not rigorously monitored throughout the contract period.
Limited competition may have suppressed price negotiation, potentially leading to a less favorable outcome for taxpayers.
Dependence on a single contractor for critical security functions could pose a risk if the contractor faces financial or operational difficulties.

Positive Signals

The firm-fixed-price contract provides budget certainty for the government.
The long duration allows for stable security operations and reduces the administrative burden of frequent re-competition.
Awarding to a single vendor can streamline management and oversight if performance is satisfactory.
The contract specifies security guard and patrol services, indicating a clear scope of work.

Sector Analysis

The security services industry is a significant sector within the broader professional, scientific, and technical services market. This contract falls under the Security Guards and Patrol Services (NAICS 561612) category. The federal government is a major consumer of these services, contracting for security at numerous facilities nationwide. The market is competitive, with numerous small and large businesses offering a range of security solutions. This specific contract represents a portion of the federal spending on physical security infrastructure.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). This means that the competition was not specifically structured to prioritize or reserve a portion of the work for small businesses. Consequently, the direct impact on the small business ecosystem through this specific award is likely minimal. However, the prime contractor, Cape Fox Facilities Services, LLC, may engage small businesses as subcontractors, though this information is not provided in the summary data.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of Health and Human Services, specifically the National Institutes of Health. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Protective Service Contracts
Department of Defense Security Contracts
General Services Administration (GSA) Schedule Contracts for Security Services
National Institutes of Health (NIH) Facility Management Contracts

Risk Flags

Limited Competition
Long Contract Duration
Potential for Price Escalation (Contractor Risk)
Performance Monitoring Required

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $18.1 million to CAPE FOX FACILITIES SERVICES, LLC. FUNDING FOR GUARD SERVICES AT RML

Who is the contractor on this award?

The obligated recipient is CAPE FOX FACILITIES SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $18.1 million.

What is the period of performance?

Start: 2020-05-01. End: 2025-07-30.

What is the track record of Cape Fox Facilities Services, LLC with federal contracts, particularly in security services?

A thorough review of Cape Fox Facilities Services, LLC's federal contract history would be necessary to assess their track record. This would involve examining past performance evaluations, any contract disputes or terminations, and their experience with similar-sized and scoped security contracts. Databases like the Federal Procurement Data System (FPDS) and the Contractor Performance Assessment Reporting System (CPARS) are crucial resources for this analysis. Understanding their history with the Department of Health and Human Services or other agencies would provide valuable insights into their reliability, quality of service, and ability to manage complex security operations effectively. Without this specific data, it's difficult to definitively assess their suitability beyond the initial award.

How does the awarded price compare to market rates for similar security guard services in Montana?

To benchmark the value, the awarded contract's total value of $18.05 million needs to be analyzed against the duration (1916 days) and the specific services provided. This would involve researching average hourly rates for security guards with similar qualifications and responsibilities in the geographic region of Montana. Industry reports, salary surveys, and data from other federal or state contracts for comparable services would be essential. The firm-fixed-price nature means the government pays a set amount, so understanding the implied hourly or daily rate and comparing it to market benchmarks is key to assessing if the government is receiving good value for its money. A significant deviation from market rates, either higher or lower, would warrant further investigation.

What are the specific risks associated with a five-year firm-fixed-price contract for security services?

A firm-fixed-price (FFP) contract for security services over a period of approximately five years presents several risks. For the government, the primary risk is that the fixed price might become uncompetitive if market rates decrease or if the contractor's costs significantly decline over time. Conversely, the contractor bears the risk of cost overruns if their expenses increase unexpectedly due to inflation, labor shortages, or unforeseen operational challenges. For both parties, there's a risk that the defined scope of work may not adequately capture evolving security needs, potentially leading to change orders or disputes. Rigorous performance monitoring is crucial to mitigate risks related to service quality and contractor responsiveness throughout the extended period.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply about the procurement process?

This designation suggests a nuanced procurement approach. 'Full and open competition' generally means all responsible sources were permitted to submit offers. However, the addition of 'after exclusion of sources' indicates that specific potential bidders were deliberately excluded prior to the competition phase. This exclusion must be justified by the agency, often based on factors like past performance issues, inability to meet specific technical requirements, or other documented reasons. While it aims for broad competition within the remaining pool, it inherently limits the number of potential offerors compared to a standard full and open competition, which could impact the level of price competition achieved and potentially the final price paid by the government.

Are there any indications of potential cost savings or efficiencies achieved through this contract structure?

The contract is structured as a firm-fixed-price (FFP) award, which inherently aims to provide cost certainty and incentivize the contractor to control costs to maximize profit. The long duration (over five years) can also lead to efficiencies by reducing the administrative burden and costs associated with frequent re-procurement processes. However, without detailed cost breakdowns or comparisons to previous contracts or alternative procurement methods, it's difficult to quantify specific cost savings or efficiencies achieved. The 'exclusion of sources' in the competition might have limited the potential for maximum price reduction, suggesting that savings might be moderate rather than substantial.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cape FOX Corporation

Address: 7050 INFANTRY RDG RD, MANASSAS, VA, 20109

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, 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: $18,054,086

Exercised Options: $18,054,086

Current Obligation: $18,054,086

Actual Outlays: $14,197,605

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline