DOE's $492M contract for Y-12 National Security Complex protective services awarded to G4S Secure Solutions
Contract Overview
Contract Amount: $492,179,445 ($492.2M)
Contractor: G4S Secure Solutions (USA) Inc.
Awarding Agency: Department of Energy
Start Date: 2007-05-03
End Date: 2012-11-30
Contract Duration: 2,038 days
Daily Burn Rate: $241.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: PROTECTIVE FORCE SERVICES FOR Y-12 NATIONAL SECURITY COMPLEX, OAK RIDGE TN
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37831
Plain-Language Summary
Department of Energy obligated $492.2 million to G4S SECURE SOLUTIONS (USA) INC. for work described as: PROTECTIVE FORCE SERVICES FOR Y-12 NATIONAL SECURITY COMPLEX, OAK RIDGE TN Key points: 1. The contract's cost-plus-award-fee structure incentivizes performance but requires robust oversight to manage costs effectively. 2. Competition was full and open, suggesting a competitive bidding process that should have yielded fair market pricing. 3. The contract duration of over 2000 days indicates a long-term need for these critical security services. 4. Performance context is crucial, as the award fee component directly links contractor compensation to meeting defined objectives. 5. The sector is dominated by a few large, specialized security firms, with G4S being a significant player. 6. Risk indicators include the potential for cost overruns inherent in cost-plus contracts and the criticality of the services provided.
Value Assessment
Rating: good
The contract's total value of approximately $492 million over its period of performance suggests a significant investment in security services for a national security complex. Benchmarking this against similar large-scale protective service contracts for federal facilities is challenging due to the unique nature of nuclear security requirements. However, the cost-plus-award-fee (CPAF) pricing structure, while common for complex services, necessitates careful monitoring to ensure value for money. The award fee component allows for performance-based incentives, which can drive efficiency and effectiveness, but also requires clear metrics and diligent oversight to prevent inflated costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit proposals. The fact that it was competed suggests that the Department of Energy sought to leverage market competition to secure the best value for these essential protective services. The number of bidders is not specified, but a full and open competition generally implies multiple interested parties, which is a positive sign for price discovery and ensuring a competitive landscape.
Taxpayer Impact: A full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of innovative solutions, ultimately maximizing the value of federal spending.
Public Impact
The primary beneficiaries are the Department of Energy and the nation, through the secure operation of the Y-12 National Security Complex. The services delivered include comprehensive protective force operations, ensuring the physical security of a critical national asset. The geographic impact is concentrated in Oak Ridge, Tennessee, supporting local employment and the regional economy. Workforce implications include the direct employment of security personnel by G4S Secure Solutions, contributing to the local job market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost creep in cost-plus contracts requires vigilant financial oversight.
- The criticality of the Y-12 site means any security lapse could have severe national security implications.
- Reliance on a single contractor for such a vital function presents a concentration of risk.
Positive Signals
- Award fee structure incentivizes high performance and achievement of security objectives.
- Full and open competition suggests a robust process for selecting a qualified contractor.
- Long contract duration provides stability and continuity for essential security operations.
Sector Analysis
The protective services sector for critical infrastructure, particularly national security sites, is highly specialized and requires significant expertise and security clearances. This contract falls within the broader security and guard services industry, which is characterized by a mix of large global players and smaller regional firms. The market size for government security contracts is substantial, driven by the need to protect federal facilities, personnel, and assets. This specific contract represents a significant portion of spending within the niche of nuclear facility security, where only a few companies possess the necessary qualifications and experience.
Small Business Impact
This contract was awarded to G4S Secure Solutions (USA) Inc., a large corporation, and there is no indication of a small business set-aside. Given the scale and specialized nature of protective services for a national security complex, it is unlikely that small businesses would be primary awardees for the prime contract. However, the prime contractor may have subcontracting opportunities for smaller businesses, particularly for support services, though this is not explicitly detailed in the provided data.
Oversight & Accountability
The Department of Energy's Office of Inspector General (OIG) would typically provide oversight for contracts of this magnitude and criticality, investigating fraud, waste, and abuse. The contract's cost-plus-award-fee structure necessitates robust internal controls and performance monitoring by the contracting agency to ensure accountability and that award fees are earned based on merit. Transparency is generally maintained through contract awards databases and agency reporting, though specific operational details of security services are often sensitive.
Related Government Programs
- Department of Energy Protective Services
- National Nuclear Security Administration Contracts
- Federal Protective Service Contracts
- Department of Defense Security Services
- Critical Infrastructure Protection Contracts
Risk Flags
- Cost Overrun Risk
- Performance Measurement Complexity
- Long-Term Contract Management
Tags
department-of-energy, protective-services, national-security, y-12-national-security-complex, g4s-secure-solutions, definitive-contract, cost-plus-award-fee, full-and-open-competition, security-guards-and-patrol-services, tennessee, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $492.2 million to G4S SECURE SOLUTIONS (USA) INC.. PROTECTIVE FORCE SERVICES FOR Y-12 NATIONAL SECURITY COMPLEX, OAK RIDGE TN
Who is the contractor on this award?
The obligated recipient is G4S SECURE SOLUTIONS (USA) INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $492.2 million.
What is the period of performance?
Start: 2007-05-03. End: 2012-11-30.
What is the historical spending trend for protective services at the Y-12 National Security Complex?
Historical spending data for protective services at the Y-12 National Security Complex prior to this $492 million contract (2007-2012) would provide valuable context. Analyzing previous contracts, their values, durations, and the contractors involved would reveal trends in cost escalation, service scope changes, and contractor stability. For instance, understanding if previous contracts were also large-scale, competed, or sole-sourced could indicate shifts in procurement strategy. Without specific prior data, it's difficult to assess if the $492 million represents an increase, decrease, or stable level of investment compared to historical needs and market conditions for similar security services at comparable federal facilities.
How does G4S Secure Solutions' performance on this contract compare to its other federal contracts?
Assessing G4S Secure Solutions' performance on this specific $492 million contract requires access to performance evaluations, award fee determinations, and any contract modifications or disputes. Comparing this performance to their track record on other federal contracts, particularly those involving similar security services or critical infrastructure, would provide a broader picture of their reliability and effectiveness. A review of past performance information (PPI) and CPARS (Contractor Performance Assessment Reporting System) reports, if publicly available, would be crucial. Consistent high ratings across multiple contracts would suggest a strong performer, while a pattern of issues could indicate systemic problems that might pose a risk to future contract performance.
What are the key performance indicators (KPIs) used to determine the award fee for this contract?
The key performance indicators (KPIs) used to determine the award fee for this contract are critical for understanding how G4S Secure Solutions' performance is measured and incentivized. As a Cost Plus Award Fee (CPAF) contract, the award fee is tied to the contractor's achievement of specific, objective performance standards. These KPIs likely relate to response times, security breach prevention, adherence to protocols, personnel training and readiness, and overall effectiveness in maintaining the security posture of the Y-12 National Security Complex. The clarity, measurability, and attainability of these KPIs directly impact the fairness of the award fee determination and the contractor's motivation to excel.
What is the estimated cost savings or value added by using a Cost Plus Award Fee (CPAF) structure versus a fixed-price contract for these services?
The Cost Plus Award Fee (CPAF) structure for this $492 million contract was likely chosen because the exact costs are difficult to predict precisely due to the complex and dynamic nature of providing protective services for a national security site. Compared to a fixed-price contract, CPAF offers flexibility to adjust for unforeseen circumstances while incentivizing performance through the award fee. The potential value added lies in achieving higher levels of security and operational efficiency than might be guaranteed under a fixed-price arrangement, where the contractor might focus solely on meeting minimum requirements. However, CPAF also carries a risk of cost overruns if not managed diligently, and the government pays the actual allowable costs plus a fee that can be adjusted based on performance, potentially exceeding what a fixed-price contract might have cost if performance was exceptional.
What are the potential risks associated with the long duration (over 2000 days) of this contract?
The long duration of this contract, exceeding 2000 days, presents several potential risks. Firstly, it increases the likelihood of cost escalation due to inflation and potential changes in labor costs or operational requirements over an extended period. Secondly, long-term contracts can sometimes lead to complacency on the part of the contractor, potentially reducing innovation or responsiveness if not actively managed. Thirdly, the government's ability to adapt to evolving security threats or technological advancements might be constrained if the contract terms become outdated. Finally, a prolonged reliance on a single contractor could create vendor lock-in, making it more difficult and costly to switch providers in the future if performance declines or better alternatives emerge.
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
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: G4S PLC
Address: 4200 WACKENHUT DR STE 100, PALM BEACH GARDENS, FL, 33410
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $532,259,311
Exercised Options: $532,259,311
Current Obligation: $492,179,445
Actual Outlays: $1
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-05-03
Current End Date: 2012-11-30
Potential End Date: 2012-11-30 00:00:00
Last Modified: 2022-07-01
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