HHS awarded $58.5M for security services, with Paragon Systems Inc. securing the contract

Contract Overview

Contract Amount: $58,474,608 ($58.5M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-20

End Date: 2019-02-13

Contract Duration: 1,972 days

Daily Burn Rate: $29.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $58.5 million to PARAGON SYSTEMS INC for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS Key points: 1. The contract value of $58.5 million over its period of performance suggests a significant need for security services. 2. The use of 'Full and Open Competition' indicates a broad market solicitation, potentially leading to competitive pricing. 3. The fixed-price contract type shifts performance risk to the contractor, Paragon Systems Inc. 4. The contract duration of approximately 5.5 years (1972 days) allows for sustained service delivery. 5. The North American Industry Classification System (NAICS) code 561612 points to a specialized security services market. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: good

The contract value of $58.5 million for security guard and patrol services over nearly five and a half years appears reasonable given the scope. Benchmarking against similar large-scale federal security contracts suggests that pricing is likely competitive due to the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, encouraging multiple bidders to vie for the contract and potentially driving down prices.

Taxpayer Impact: Taxpayers benefit from full and open competition as it increases the likelihood of obtaining services at the most advantageous prices and promotes a wider pool of potential contractors.

Public Impact

The Department of Health and Human Services (HHS) benefits from enhanced security for its facilities and personnel. Services include security guards and patrol, ensuring physical safety and asset protection. The contract's geographic impact is primarily within Georgia (ST: GA, SN: GEORGIA), where the services are likely delivered. The contract supports jobs within the security services industry, contributing to the local workforce in Georgia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service quality variations across different delivery orders if this is part of a larger IDIQ.
Ensuring consistent performance monitoring and evaluation over the contract's extended duration.
Reliance on a single contractor for critical security functions requires robust oversight.

Positive Signals

The use of full and open competition suggests a strong market response and potential for competitive pricing.
The firm fixed-price contract type provides cost certainty for the government.
The contract duration allows for stability in security service provision.

Sector Analysis

The security services industry is a substantial sector within the U.S. economy, encompassing a wide range of protective services. Federal spending in this area is significant, driven by the need to secure government facilities, personnel, and sensitive information. This contract, valued at $58.5 million, falls within the typical range for large-scale federal security guard and patrol services, reflecting the government's ongoing investment in maintaining a secure operational environment.

Small Business Impact

The data indicates this contract was awarded under 'Full and Open Competition' and does not specify any small business set-aside. Therefore, it is unlikely that small businesses were specifically targeted for this award. However, the prime contractor, Paragon Systems Inc., may engage small businesses as subcontractors, though this is not detailed in the provided information.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Office of Assistant Secretary for Preparedness and Response (ASPR) at HHS. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services at an agreed-upon price. Transparency is generally maintained through contract databases, though specific performance metrics and oversight reports may not be publicly accessible.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
General Services Administration (GSA) Schedule Contracts for Security
Department of Defense Security Services

Risk Flags

Potential for cost-cutting impacting service quality due to fixed-price nature.
Ensuring consistent performance across a multi-year contract.
Reliance on contractor for critical security functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $58.5 million to PARAGON SYSTEMS INC. IGF::OT::IGF FOR OTHER FUNCTIONS

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $58.5 million.

What is the period of performance?

Start: 2013-09-20. End: 2019-02-13.

What is the track record of Paragon Systems Inc. with federal contracts, particularly in security services?

Paragon Systems Inc. has a significant history of performing federal contracts, primarily in the security services domain. Their portfolio includes numerous awards across various agencies, often for guard services, physical security, and related protective measures. Analyzing their past performance, including any reported issues, contract modifications, or successful completions, is crucial for assessing their reliability and capability for this specific HHS contract. A review of their contract history would reveal their experience with similar contract types (e.g., firm fixed-price) and their ability to meet performance requirements within budget and schedule. This context helps in evaluating the risk associated with awarding them this substantial contract.

How does the awarded amount of $58.5 million compare to similar security service contracts awarded by HHS or other federal agencies?

The $58.5 million award for security guard and patrol services over approximately 5.5 years represents a substantial investment. To benchmark its value, one would compare it to other large-scale security contracts awarded by HHS or agencies like the Department of Homeland Security (DHS) or the General Services Administration (GSA) for similar services. Factors such as the number of personnel, geographic coverage, specific security requirements (e.g., armed vs. unarmed guards, specialized equipment), and contract duration influence pricing. If this contract's per-year cost or cost per guard falls within or below the average range of comparable contracts, it suggests good value for money. Conversely, if it appears significantly higher, further investigation into the specific needs and market conditions would be warranted.

What are the primary risks associated with a firm fixed-price contract for security services, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract for security services is that the contractor, Paragon Systems Inc., bears the financial burden if costs exceed the agreed-upon price. This could incentivize the contractor to cut corners on service quality, staffing levels, or training to maintain profitability, potentially impacting security effectiveness. Mitigation strategies include robust performance work statements (PWS) that clearly define service expectations, stringent performance monitoring and evaluation by the government, and clearly defined remedies for non-performance. The government's ability to enforce contract terms and potentially terminate for default are key deterrents against substandard service delivery.

What is the expected effectiveness of the security services provided under this contract in meeting HHS's security objectives?

The effectiveness of the security services hinges on the precise requirements outlined in the Performance Work Statement (PWS) and the contractor's adherence to them. Given that this is for 'Security Guards and Patrol Services,' the primary objective is likely to deter unauthorized access, protect personnel and property, and respond to security incidents. The 'Full and Open Competition' award suggests a competitive selection process aimed at identifying a capable provider. However, ongoing government oversight, regular performance reviews, and clear metrics for success (e.g., incident response times, patrol coverage adherence) are essential to ensure the services consistently meet HHS's evolving security needs and objectives.

How has federal spending on security guard and patrol services (NAICS 561612) trended over the past five years, and where does this contract fit?

Federal spending on security guard and patrol services (NAICS 561612) has generally remained robust, reflecting the continuous need for physical security across government agencies. While specific year-over-year trends can fluctuate based on agency priorities and budget allocations, the overall demand is consistent. This $58.5 million contract, awarded over a period of roughly 5.5 years, represents a significant, but not unprecedented, single award within this category. It aligns with the government's ongoing commitment to securing its assets and personnel, fitting into the broader pattern of federal investment in protective services.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2013Q15516

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SRS Critical Infrastructure Security LLC (UEI: 355790924)

Address: 14160 NEWBROOK DR STE. 210, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $59,488,300

Exercised Options: $59,289,300

Current Obligation: $58,474,608

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS07F0418K

IDV Type: FSS

Timeline