DOE's $156M security contract with Paragon Technical Services saw 4 bidders, raising questions about value and competition

Contract Overview

Contract Amount: $156,159,376 ($156.2M)

Contractor: Paragon Technical Services, Inc.

Awarding Agency: Department of Energy

Start Date: 2009-06-26

End Date: 2015-06-25

Contract Duration: 2,190 days

Daily Burn Rate: $71.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: PROTECTIVE FORCE SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20585

State: District of Columbia Government Spending

Plain-Language Summary

Department of Energy obligated $156.2 million to PARAGON TECHNICAL SERVICES, INC. for work described as: PROTECTIVE FORCE SERVICES Key points: 1. The contract's value of $156 million over its lifetime suggests a significant investment in protective services. 2. Competition dynamics appear limited with only 4 bidders, potentially impacting price discovery and value for money. 3. Risk indicators are moderate, given the long duration and time-and-materials pricing structure. 4. Performance context is crucial; the effectiveness of security services directly impacts facility safety and operational continuity. 5. Sector positioning places this contract within the broader government security services market, a critical area for federal operations.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific performance metrics or detailed cost breakdowns. However, a $156 million spend over six years for security services indicates a substantial commitment. The time-and-materials pricing structure, while flexible, can sometimes lead to cost overruns if not managed tightly. Comparing it to similar large-scale security contracts across federal agencies would provide a clearer picture of whether the pricing is competitive and reflects true value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a limited number of bidders compared to full and open competition. With only four bidders, the level of competition was restricted. While SAP aims for efficiency in smaller procurements, its application here might have limited the pool of potential offerors, potentially affecting the government's ability to secure the most competitive pricing and innovative solutions.

Taxpayer Impact: The limited competition under SAP means taxpayers may not have benefited from the full range of pricing and service options that a broader competition could have yielded. This could translate to a higher overall cost for the security services provided.

Public Impact

The primary beneficiaries are the Department of Energy facilities and personnel, who receive enhanced security and protection. Services delivered include security guard and patrol functions, ensuring physical security and access control. The geographic impact is concentrated in the District of Columbia, where the contract was performed. Workforce implications include the employment of security personnel by Paragon Technical Services and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time-and-materials pricing can lead to unpredictable costs if not closely monitored.
Limited competition may have resulted in less favorable pricing for the government.
The long contract duration (6 years) increases the risk of vendor lock-in and potential complacency.
Reliance on a single contractor for critical security services poses a risk if performance falters.

Positive Signals

The contract was competed, indicating an effort to solicit offers.
The existence of 4 bidders suggests some level of market interest in providing these services.
Security services are essential for government operations, implying a critical need being met.

Sector Analysis

The federal government is a major consumer of security services, with spending often concentrated in sectors requiring physical protection, such as defense, energy, and research facilities. This contract falls within the security and protective services industry, a segment characterized by numerous providers ranging from small, specialized firms to large, diversified companies. The market size for federal security contracts is substantial, driven by the need to safeguard sensitive information, critical infrastructure, and personnel across various agencies. This specific contract likely represents a significant portion of the security spending for the targeted Department of Energy facilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the contract type (COMPETED UNDER SAP) might allow for small business participation, the absence of a specific set-aside suggests that larger firms were likely the primary participants. This means that opportunities for small businesses to directly contract with the government for these services were limited, though they might have participated as subcontractors to the prime contractor, Paragon Technical Services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Energy's contracting officers and program managers. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases, though detailed performance data may be less accessible. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Federal Protective Service Contracts
Department of Energy Security Operations
Government Security Guard Services
Physical Security Contracts
Contracting under Simplified Acquisition Procedures

Risk Flags

Limited Competition
Time and Materials Pricing
Long Contract Duration
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $156.2 million to PARAGON TECHNICAL SERVICES, INC.. PROTECTIVE FORCE SERVICES

Who is the contractor on this award?

The obligated recipient is PARAGON TECHNICAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $156.2 million.

What is the period of performance?

Start: 2009-06-26. End: 2015-06-25.

What was the historical spending pattern for protective force services at the Department of Energy prior to this contract?

Analyzing historical spending patterns for protective force services at the Department of Energy (DOE) prior to this specific $156 million contract (awarded 2009) would involve examining previous contract awards for similar services. This would include looking at the total annual expenditure on security guards and patrol services, the number and duration of prior contracts, and the incumbent contractors. Understanding these patterns helps establish a baseline for current spending, identify trends in contract values and durations, and assess whether the $156 million award represents an increase, decrease, or consistent level of investment in protective services. It also aids in identifying potential cost efficiencies or inefficiencies over time and evaluating the stability of the security services market for the DOE.

How does the per-unit cost of security personnel under this contract compare to industry benchmarks or similar federal contracts?

Determining the per-unit cost of security personnel under this contract requires detailed data on the number of personnel, hours worked, and total compensation, which is not fully available in the provided summary. However, if such data were accessible, it could be benchmarked against industry standards for security guards (NAICS 561612) in the Washington D.C. metropolitan area and against similar federal contracts. Factors like the level of security clearance required, specialized training, and the specific duties performed would influence the per-unit cost. A comparison would reveal if Paragon Technical Services' pricing is competitive, potentially indicating whether the limited competition resulted in inflated costs or if the government secured favorable rates due to the contract's structure and the contractor's efficiency.

What were the specific performance metrics and outcomes achieved during the contract's duration?

The provided data does not include specific performance metrics or outcomes achieved during the contract's duration (2009-2015). Typically, such contracts would have Key Performance Indicators (KPIs) related to response times, incident reporting accuracy, personnel reliability, adherence to post orders, and overall security effectiveness. Assessing these metrics would be crucial to understanding the 'value for money' aspect of the $156 million expenditure. Without this information, it's difficult to definitively evaluate the quality of services provided by Paragon Technical Services and whether the contract met its objectives in safeguarding DOE facilities and personnel. A review of contract performance reports or post-award evaluations would be necessary.

What is the track record of Paragon Technical Services in fulfilling similar government contracts, particularly in security services?

Paragon Technical Services, Inc. has a history of performing government contracts, including those related to security services. To assess their track record for this specific $156 million Department of Energy contract, a deeper dive into their past performance evaluations, any documented issues or successes on prior security contracts, and their overall experience in the sector would be necessary. This includes examining their ability to manage large-scale contracts, deploy qualified personnel, and meet stringent security requirements. A positive track record would suggest a lower risk associated with this contract, while a history of performance issues could raise concerns about the contractor's reliability and the overall effectiveness of the security services provided.

How did the use of Time and Materials (T&M) pricing impact the final cost compared to a fixed-price contract for these security services?

The use of Time and Materials (T&M) pricing for this $156 million security contract (pt: TIME AND MATERIALS) means that the government pays the contractor for the actual labor hours and materials used, plus a fixed fee or நிர்ணயிக்கப்பட்ட rate. This contrasts with a fixed-price contract, where the total cost is predetermined. T&M contracts offer flexibility, which can be beneficial when the scope of work is uncertain or likely to change. However, they carry a higher risk of cost overruns if not managed diligently, as the contractor is incentivized to bill for more hours or materials. For security services, T&M might be used for unpredictable security needs or evolving threat landscapes. A comparison to similar fixed-price contracts would reveal whether the T&M approach ultimately led to higher or lower overall costs for the Department of Energy, considering the duration and nature of the services.

What is the significance of the NAICS code 561612 (Security Guards and Patrol Services) in understanding the scope and market for this contract?

The North American Industry Classification System (NAICS) code 561612, 'Security Guards and Patrol Services,' precisely defines the primary industry and services covered by this Department of Energy contract. This code signifies that the contract's core purpose was to procure personnel for guarding and patrolling facilities, monitoring surveillance equipment, and providing other related security functions. Understanding this code is crucial for market analysis, as it allows for comparisons with other federal and commercial contracts within the same industry. It helps identify the competitive landscape, potential providers, and typical pricing structures for security guard services. The code also informs regulatory considerations and helps categorize government spending within the broader economic context of the security services sector.

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: COMPETED UNDER SAP

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 3455 MILL RUN DR STE 410, ALBUQUERQUE, NM, 87111

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Subchapter S Corporation, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $157,794,394

Exercised Options: $157,794,394

Current Obligation: $156,159,376

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline