DOE's $287.5M security contract awarded to Centerra Group, LLC, spanning nearly 8 years
Contract Overview
Contract Amount: $287,503,675 ($287.5M)
Contractor: Centerra Group, LLC
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2007-08-15
Contract Duration: 2,861 days
Daily Burn Rate: $100.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: TIME AND MATERIALS
Sector: Other
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $287.5 million to CENTERRA GROUP, LLC for work described as: Key points: 1. Contract value represents a significant investment in facility security services. 2. The full and open competition suggests a potentially competitive bidding process. 3. Long contract duration may present risks related to evolving security needs and inflation. 4. Services provided are critical for safeguarding sensitive government assets and personnel. 5. The award to a single entity concentrates significant security responsibilities. 6. Performance context is crucial given the extended period of service delivery.
Value Assessment
Rating: fair
The total award amount of $287.5 million over approximately 8 years averages to about $35.9 million annually. Benchmarking this against similar large-scale security contracts for federal facilities is challenging without more specific service details. However, the duration and scope suggest a substantial, albeit potentially variable, cost. The 'time and materials' pricing structure can lead to cost overruns if not closely managed, impacting overall value for money.
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. The presence of two bidders suggests a moderate level of competition for this significant security services contract. While two bidders are better than one, a higher number of competitors typically drives prices down more effectively and offers a wider range of innovative solutions.
Taxpayer Impact: A competitive process, even with two bidders, is generally favorable for taxpayers as it encourages more reasonable pricing than a sole-source award. However, the limited number of bidders might mean taxpayers did not achieve the absolute lowest possible price.
Public Impact
The Department of Energy benefits from continuous and comprehensive security services across its facilities. Personnel and sensitive materials within DOE sites are protected, ensuring operational continuity and national security. The contract supports jobs within the security services sector, particularly in Tennessee where the contractor is based. Geographic impact is likely concentrated around DOE facilities, with potential for broader economic impact through contractor employment and local spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost escalation due to time and materials pricing over a long contract duration.
- Risk of vendor lock-in or complacency given the extended period of service.
- Ensuring consistent service quality and adherence to evolving security standards over nearly 8 years.
- Dependence on a single contractor for critical security functions.
Positive Signals
- Awarded through full and open competition, suggesting a structured procurement process.
- Contractor has a long-standing relationship with the agency, potentially indicating satisfactory past performance.
- The contract duration provides stability for both the agency and the contractor.
- Security services are essential for protecting government assets and personnel.
Sector Analysis
The security services industry is a significant sector supporting government operations, encompassing guarding, patrol, and alarm monitoring. Federal contracts for these services are substantial, driven by the need to protect critical infrastructure, sensitive information, and personnel. This contract fits within the broader category of facility support services, where competition can vary widely depending on specialization and contract size. Comparable spending benchmarks are difficult without specific service details, but large, multi-year security contracts often run into tens or hundreds of millions.
Small Business Impact
There is no indication that this contract included small business set-asides. The contract value and nature of security services suggest it may be challenging for small businesses to compete directly for the prime contract. However, the prime contractor, Centerra Group, LLC, may engage small businesses for subcontracting opportunities, which would be a positive impact on the small business ecosystem if effectively implemented.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting officers and program managers. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and potential penalties for non-compliance. Transparency is generally maintained through contract award databases and public reporting, though specific operational oversight details are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Department of Energy Facility Security Contracts
- Federal Security Guard Services
- Department of Energy Operations and Maintenance Contracts
- Large-Scale Government Service Contracts
Risk Flags
- Long contract duration may lead to price increases or service obsolescence.
- Time and Materials pricing structure carries a risk of cost overruns.
- Limited competition (2 bidders) may result in suboptimal pricing.
- Potential for contractor performance degradation over an extended period.
Tags
sector-other, agency-department-of-energy, geography-tennessee, contract-type-time-and-materials, size-category-large, competition-level-full-and-open, service-category-security-services, duration-long-term, award-type-dca
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $287.5 million to CENTERRA GROUP, LLC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is CENTERRA GROUP, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $287.5 million.
What is the period of performance?
Start: 1999-10-15. End: 2007-08-15.
What is Centerra Group, LLC's track record with the Department of Energy and other federal agencies for similar security services?
Centerra Group, LLC has a significant history of providing security and protective services to various federal agencies, including the Department of Energy. Their experience often involves managing large-scale security operations at sensitive government facilities. Analyzing past performance reviews, any documented disputes, or contract modifications for previous DOE contracts would provide deeper insight into their reliability and effectiveness. A review of their federal contracting history reveals multiple awards for security services, suggesting a sustained presence and capability in this market. Understanding the specifics of their past performance, including any awards or penalties, is crucial for assessing the risk associated with this current contract.
How does the annual cost of this contract compare to industry benchmarks for similar security services at federal facilities?
Determining precise annual cost benchmarks for this $287.5 million contract, averaging roughly $35.9 million per year, is complex without granular details on the specific services rendered (e.g., number of guards, posts, technology deployed, hours). However, for large federal facilities requiring comprehensive security, annual costs can range from several million to tens of millions of dollars. Factors like geographic location, threat level, and the specific security protocols mandated by the Department of Energy significantly influence pricing. If this contract covers multiple high-security sites or requires specialized personnel, the cost might align with higher-end benchmarks. Conversely, if it primarily involves standard guarding services at less sensitive locations, it could be on the higher side, warranting closer scrutiny of the value proposition.
What are the primary risks associated with the 'time and materials' pricing structure over an 8-year contract duration?
The 'time and materials' (T&M) pricing structure, especially over a long duration like this nearly 8-year contract, presents inherent risks of cost escalation. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials used. This can lead to higher-than-anticipated costs if labor hours increase unexpectedly or if material costs rise significantly. For the government, the primary risk is a lack of cost certainty and potential overspending if work is inefficiently performed or if scope creep occurs without adequate controls. Robust oversight, detailed tracking of labor hours, and strict management of material procurement are essential to mitigate these risks and ensure value for money.
How effective are the Department of Energy's oversight mechanisms likely to be for a contract of this magnitude and duration?
The effectiveness of the Department of Energy's oversight for this contract hinges on several factors, including the adequacy of resources allocated to contract management, the clarity of performance metrics, and the diligence of the contracting officer's representatives (CORs). For a contract valued at nearly $287.5 million and spanning almost eight years, robust oversight is critical. This typically involves regular performance reviews, site visits, audits of billing records, and proactive communication channels with the contractor. The agency's established procurement and contract management policies, along with potential involvement from its Office of Inspector General for high-risk areas, provide a framework for oversight. However, the sheer scale and duration necessitate continuous vigilance to ensure compliance, quality, and cost control.
What is the historical spending trend for security services by the Department of Energy, and how does this contract fit within that trend?
Historical spending on security services by the Department of Energy (DOE) has consistently been substantial, reflecting the agency's mandate to protect critical national security assets, nuclear materials, and research facilities. Annual expenditures often run into the hundreds of millions of dollars across various contracts for physical security, cybersecurity, and protective forces. This $287.5 million award, spanning nearly eight years, represents a significant, long-term commitment to a specific security services provider. It fits within the broader trend of the DOE relying heavily on contracted services for its security needs. Analyzing past spending patterns would reveal if the DOE is consolidating security contracts, shifting towards specific types of providers, or maintaining a consistent level of investment in outsourced security.
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) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: TIME AND MATERIALS (Y)
Contractor Details
Parent Company: G4S PLC (UEI: 737341631)
Address: 7121 FAIRWAY DR STE 301, PALM BEACH GARDENS, FL, 21
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $288,203,271
Exercised Options: $288,203,271
Current Obligation: $287,503,675
Timeline
Start Date: 1999-10-15
Current End Date: 2007-08-15
Potential End Date: 2007-08-15 00:00:00
Last Modified: 2011-09-29
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