Department of Energy's $361M security contract awarded to Centerra Group, LLC, spanning over 5 years
Contract Overview
Contract Amount: $361,297,898 ($361.3M)
Contractor: Centerra Group, LLC
Awarding Agency: Department of Energy
Start Date: 2002-07-15
End Date: 2007-07-16
Contract Duration: 1,827 days
Daily Burn Rate: $197.8K/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 $361.3 million to CENTERRA GROUP, LLC for work described as: Key points: 1. The contract's value of over $361 million over five years suggests a significant investment in security services. 2. Awarded under full and open competition, this contract indicates a market where multiple providers could potentially bid. 3. The use of a Time and Materials (T&M) contract type can introduce cost variability and requires diligent oversight. 4. The duration of the contract (over 1800 days) implies a long-term need for these security services. 5. The contract was awarded to Centerra Group, LLC, suggesting a track record or competitive advantage in this service area. 6. The North American Industry Classification System (NAICS) code 561612 points to specialized security guard and patrol services.
Value Assessment
Rating: fair
Benchmarking the value of this $361 million contract requires detailed comparison with similar security service contracts awarded by the Department of Energy and other federal agencies. The Time and Materials (T&M) pricing structure, while flexible, can lead to higher costs if not managed effectively, potentially impacting overall value for money. Without specific performance metrics and cost breakdowns, it is difficult to definitively assess if the pricing is competitive or if the services delivered represent optimal value.
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 bids suggests a moderate level of competition for this significant security services contract. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially more competitive pricing for the government.
Taxpayer Impact: A competitive bidding process, even with two bidders, generally benefits taxpayers by encouraging providers to offer more favorable terms and pricing to secure the contract.
Public Impact
The primary beneficiaries are the Department of Energy facilities and personnel, who receive enhanced security and protection. Services delivered include security guards and patrol services, crucial for maintaining a safe and secure operational environment. The contract's geographic impact is focused on Tennessee (ST, SN), where the Department of Energy facilities requiring these services are located. Workforce implications include the employment of security personnel by Centerra Group, LLC, contributing to local job opportunities in Tennessee.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored for labor hours and material costs.
- A limited number of bidders (two) may indicate potential barriers to entry or a concentrated market for these specialized services.
- The long contract duration could lead to complacency or reduced incentive for innovation if not paired with strong performance management.
Positive Signals
- Awarded under full and open competition, suggesting a fair process and potential for broad market participation.
- The contract is with Centerra Group, LLC, a known entity in the security services sector, implying some level of established capability.
- The contract addresses a critical need for security services within the Department of Energy.
Sector Analysis
This contract falls within the security and protective services sector, specifically focusing on guard and patrol services (NAICS 561612). This sector is characterized by a mix of large, established providers and smaller specialized firms. Federal spending in this area is substantial, driven by the need to protect government assets, facilities, and personnel across various agencies. Comparable spending benchmarks would involve analyzing other large-scale security contracts awarded to private firms by agencies like the Department of Defense, Department of Homeland Security, and other civilian agencies.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract awarded under full and open competition, there may be opportunities for small businesses to participate as subcontractors to the prime contractor, Centerra Group, LLC. However, the extent of small business subcontracting is not detailed in the provided data and would require further investigation into the contract's specific clauses and performance reports.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy's contracting officers and program managers. Given the Time and Materials (T&M) nature of the award, robust oversight is crucial to monitor labor hours, material costs, and ensure adherence to the contract's scope of work. Transparency would be enhanced through regular performance reviews and public reporting of contract expenditures. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Department of Energy Security Services
- Federal Protective Services
- Government Security Contracts
- Guard and Patrol Services
- Department of Energy Facility Management
Risk Flags
- Time and Materials contract type carries inherent cost risk.
- Limited number of bidders may reduce competitive pressure.
- Long contract duration requires sustained oversight.
Tags
department-of-energy, security-services, centerra-group-llc, definitive-contract, time-and-materials, full-and-open-competition, tennessee, naics-561612, large-contract, protective-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $361.3 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 $361.3 million.
What is the period of performance?
Start: 2002-07-15. End: 2007-07-16.
What is the historical spending pattern for security services at the Department of Energy facilities covered by this contract?
Analyzing historical spending requires accessing prior contract awards for security services at the specific Department of Energy facilities in Tennessee. This would involve reviewing contract databases for previous awards to Centerra Group, LLC or other security providers for similar services. Understanding the trend in spending—whether it has increased, decreased, or remained stable—can provide context for the current $361 million award. It helps determine if this represents a continuation of existing service levels, an expansion, or a cost-saving measure. Without specific historical data, it's difficult to ascertain if the current award reflects a consistent need or a significant shift in resource allocation for security.
How does the per-unit cost of security personnel under this contract compare to industry benchmarks?
Determining the per-unit cost requires breaking down the total contract value by the number of personnel and the duration of their service. For instance, if the contract provides 100 guards for 5 years, the average annual cost per guard can be calculated. This figure would then be compared against industry benchmarks for security guard services, which vary based on location, level of security clearance required, and specific duties. Factors like overtime, benefits, and overhead also influence the per-unit cost. A comparison would reveal if Centerra Group's pricing is competitive or if it represents a premium, potentially indicating higher service levels or market conditions.
What is Centerra Group, LLC's track record with the Department of Energy and similar federal contracts?
Centerra Group, LLC has a significant history of providing security and protective services to various government agencies, including the Department of Energy. Their track record typically involves managing large-scale security operations at sensitive federal facilities. Assessing their performance would involve reviewing past contract performance evaluations (e.g., CPARS reports), any past performance issues or disputes, and their success in meeting security requirements. A strong track record with the DOE suggests familiarity with agency protocols and a proven ability to deliver reliable security services, which likely contributed to their winning this $361 million contract.
What are the key performance indicators (KPIs) used to measure the effectiveness of the security services provided under this contract?
Effective oversight of this contract necessitates clearly defined Key Performance Indicators (KPIs). These might include metrics such as response times to security incidents, the number of security breaches or unauthorized access incidents, adherence to post orders, guard attendance and punctuality rates, and successful completion of security patrols. The Department of Energy would likely track these KPIs through regular reporting from Centerra Group and potentially through independent audits or site inspections. Meeting or exceeding these KPIs would indicate successful contract performance and value for money.
What is the potential impact of the Time and Materials (T&M) contract type on overall cost and risk for the government?
The Time and Materials (T&M) contract type allows the government to pay for direct labor hours at specified hourly rates and for the actual cost of materials used. While offering flexibility, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts. This is because the final cost is not predetermined and depends heavily on the actual effort expended and materials consumed. Effective management requires stringent oversight of labor hours, material invoices, and contractor efficiency to prevent unnecessary costs and ensure value. The Department of Energy must actively manage this contract to mitigate the inherent cost risks associated with T&M.
How does the competition level (2 bidders) for this contract compare to other large federal security service contracts?
A competition level of two bidders for a contract valued at $361 million suggests a moderately competitive market for these specific security services. Many large federal contracts, especially in specialized sectors, can see a wide range of bidder participation, from a few highly qualified firms to dozens of interested parties. If the average number of bids for comparable large federal security contracts is significantly higher, it might indicate that barriers to entry for this particular service or location are substantial, or that Centerra Group and the other bidder are dominant players. Conversely, if two bidders is typical, it suggests a stable, albeit concentrated, market.
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
Address: 7121 FAIRWAY DR STE 301, PALM BEACH GARDENS, FL, 33418
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $699,548,725
Exercised Options: $699,548,725
Current Obligation: $361,297,898
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2002-07-15
Current End Date: 2007-07-16
Potential End Date: 2007-07-16 00:00:00
Last Modified: 2024-07-15
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