DOE's $270M Security Services Contract with Centerra Group Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $269,758,954 ($269.8M)
Contractor: Centerra Group, LLC
Awarding Agency: Department of Energy
Start Date: 2012-01-01
End Date: 2018-02-28
Contract Duration: 2,250 days
Daily Burn Rate: $119.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: NEVADA SITE OFFICE (NSO) - SECURITY PROTECTIVE FORCE AND SYSTEMS SERVICES
Place of Performance
Location: LAS VEGAS, CLARK County, NEVADA, 89193
State: Nevada Government Spending
Plain-Language Summary
Department of Energy obligated $269.8 million to CENTERRA GROUP, LLC for work described as: NEVADA SITE OFFICE (NSO) - SECURITY PROTECTIVE FORCE AND SYSTEMS SERVICES Key points: 1. The contract awarded to Centerra Group, LLC for security services at the Nevada Site Office represents a significant expenditure. 2. While awarded under full and open competition, the contract type (Cost Plus Award Fee) warrants close examination for potential cost overruns. 3. The lack of small business participation is a notable concern, potentially limiting broader economic impact. 4. The security services sector is critical for government operations, but efficiency and cost-effectiveness are paramount.
Value Assessment
Rating: questionable
The Cost Plus Award Fee structure can incentivize cost increases, making it difficult to benchmark against similar contracts without detailed performance data. The award fee component adds complexity to assessing true value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a broad search for qualified bidders. However, the specific pricing mechanisms within the Cost Plus Award Fee structure may not have fully optimized price discovery.
Taxpayer Impact: Taxpayer funds are being utilized for essential security services. The effectiveness of the competition and contract type in controlling costs will directly impact the overall taxpayer burden.
Public Impact
Essential security services for a federal site are being provided, ensuring operational continuity and safety. The contract's duration and significant value mean it impacts a substantial portion of the federal security services market. Potential for cost efficiencies or overruns directly affects public funds allocated to national security and energy operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contract type
- Lack of small business participation
- Long contract duration
Positive Signals
- Awarded under full and open competition
- Essential service provision
Sector Analysis
This contract falls within the security and protective services sector, which is a critical component of government operations, particularly for sensitive sites like those managed by the Department of Energy. Benchmarks for similar large-scale security contracts are often influenced by the specific requirements and threat levels.
Small Business Impact
The contract data indicates no small business participation. This suggests that opportunities for small businesses in providing these critical security services were either not pursued or not met by the prime contractor, potentially limiting economic inclusion.
Oversight & Accountability
Oversight is crucial for Cost Plus Award Fee contracts to ensure that costs are managed effectively and that award fees are tied to demonstrable performance improvements. The Department of Energy's contracting officers must maintain rigorous oversight to safeguard taxpayer funds.
Related Government Programs
- Security Guards and Patrol Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost Plus Award Fee structure may lead to higher costs.
- Lack of small business participation.
- Long contract duration increases risk of performance issues.
- Potential for insufficient price discovery despite full and open competition.
Tags
security-guards-and-patrol-services, department-of-energy, nv, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $269.8 million to CENTERRA GROUP, LLC. NEVADA SITE OFFICE (NSO) - SECURITY PROTECTIVE FORCE AND SYSTEMS SERVICES
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 $269.8 million.
What is the period of performance?
Start: 2012-01-01. End: 2018-02-28.
How effectively did the Cost Plus Award Fee structure incentivize cost control and performance for Centerra Group, LLC?
The Cost Plus Award Fee (CPAF) structure aims to balance cost reimbursement with performance incentives. However, without detailed performance metrics and award fee payouts, it's challenging to definitively assess its effectiveness in controlling costs for this specific contract. CPAF can sometimes lead to higher overall costs if not meticulously managed and overseen, as it allows for profit on costs incurred plus an incentive fee.
What were the primary factors limiting small business participation in this significant federal security contract?
The lack of small business participation could stem from several factors, including the specialized nature of the security services required, the large scale of the contract making it difficult for smaller firms to compete, or potentially insufficient outreach and subcontracting plans by the prime contractor. Further investigation into the solicitation and award process is needed.
Given the contract's value and duration, what are the key risks to the Department of Energy regarding service continuity and cost management?
Key risks include potential cost overruns due to the CPAF structure, contractor performance degradation over a long contract period, and the challenge of ensuring consistent, high-quality security services. Ensuring robust oversight, clear performance standards, and competitive re-competition strategies are vital to mitigate these risks.
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
Solicitation ID: DE-SOL-0002014
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 7121 FAIRWAY DR STE 301, PALM BEACH GARDENS, FL, 33418
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $298,116,280
Exercised Options: $293,138,538
Current Obligation: $269,758,954
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-01-01
Current End Date: 2018-02-28
Potential End Date: 2024-02-27 00:00:00
Last Modified: 2024-02-27
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