HHS awarded $27.6M for personnel security services, with a significant portion spent on investigation and background checks

Contract Overview

Contract Amount: $27,620,626 ($27.6M)

Contractor: Protection Strategies Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2010-10-01

End Date: 2018-05-31

Contract Duration: 2,799 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: TAS::75 4552 001::TAS PERSONNEL SECURITY SERVICES 10/01/2011 - 09/30/2011 WITH 4 1-YEAR OPTIONS.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.6 million to PROTECTION STRATEGIES INC for work described as: TAS::75 4552 001::TAS PERSONNEL SECURITY SERVICES 10/01/2011 - 09/30/2011 WITH 4 1-YEAR OPTIONS. Key points: 1. The contract value of $27.6 million over its period of performance indicates a substantial investment in personnel security. 2. The primary service category, Investigation and Personal Background Check Services (NAICS 561611), suggests a focus on vetting individuals. 3. The contract was awarded under Full and Open Competition, implying a broad market solicitation. 4. The contract's duration, spanning from October 2010 to May 2018, covers a significant period for ongoing security needs. 5. The award was a Delivery Order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a pre-competed vehicle. 6. The contract was awarded to Protection Strategies Inc., a single contractor, highlighting the need for specialized services. 7. The contract was performed in Maryland (ST: MD), indicating a concentration of services in that geographic region.

Value Assessment

Rating: good

The total award of $27.6 million for personnel security services over approximately 7.5 years appears reasonable given the scope of investigation and background check services. Benchmarking against similar contracts for federal personnel vetting is challenging without more specific service details, but the price per year averages around $3.7 million. This figure should be compared to industry standards for large-scale background investigation services to fully assess value for money. The contract type (Labor Hours) suggests flexibility in resource allocation, which can be cost-effective if managed efficiently.

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 a bid. This suggests a competitive process was utilized to solicit offers. While the specific number of bidders is not provided, full and open competition generally leads to a wider pool of potential contractors and can foster price discovery. The award being a Delivery Order implies it might have been placed against a pre-existing IDIQ contract that itself underwent full and open competition.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it encourages competitive pricing and allows for the selection of the most cost-effective and capable provider, potentially leading to savings.

Public Impact

Federal employees and contractors requiring security clearances benefit from the thorough vetting processes. The Department of Health and Human Services (HHS) ensures the integrity and security of its personnel and sensitive information. The services are primarily delivered within Maryland, impacting the local economy and workforce in that region. The contract supports jobs in the security services sector, specifically in investigation and background check roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders in the full and open competition makes it difficult to fully assess the competitive pressure on pricing.
The contract's duration and delivery order nature could mask potential inefficiencies if not actively managed and reviewed.
Without detailed performance metrics, it's hard to gauge the effectiveness and efficiency of the investigation services provided.
The concentration of services in Maryland might limit opportunities for contractors in other geographic regions.

Positive Signals

The use of 'Full and Open Competition' is a positive signal for a robust and fair procurement process.
The contract's focus on investigation and personal background checks addresses a critical security need for the agency.
The award to a single contractor suggests specialization and potentially deep expertise in the required security services.
The contract's long duration implies a stable, ongoing need for these essential security functions.

Sector Analysis

The personnel security services sector is a critical component of government operations, ensuring the trustworthiness of individuals accessing sensitive information or facilities. This contract falls under the broader professional, scientific, and technical services industry, specifically within the security and investigation sub-sector. The market for these services is competitive, with numerous firms offering background checks, vetting, and investigative services to federal agencies. Comparable spending benchmarks would typically be found within the budgets allocated by agencies like DHS, DOD, and others for similar security functions.

Small Business Impact

The provided data indicates that small business participation (SB: false) and small business set-asides (SS: false) were not factors in this specific contract award. This suggests the contract was not specifically targeted towards small businesses, and the prime contractor is likely a larger entity. There is no information on subcontracting plans, so the impact on the small business ecosystem is not directly ascertainable from this data alone, but it implies that opportunities for small businesses as subcontractors may have been limited or not a primary consideration in the contract's structure.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal contracting and program management offices. As a Delivery Order, it might be subject to oversight from the contracting office that awarded the parent IDIQ contract, if applicable. Transparency is generally facilitated through contract databases like FPDS, where basic award information is published. Specific accountability measures would be detailed in the contract's terms and conditions, including performance standards and remedies for non-performance. Inspector General jurisdiction would apply if there were allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Employee Background Checks
Personnel Security Investigations
Security Services Contracts
Government Contracting
NAICS 561611 - Investigation and Personal Background Check Services

Risk Flags

Potential for vendor lock-in due to long contract duration.
Risk of performance degradation without ongoing competitive pressure.
Lack of transparency on specific performance metrics and outcomes.
Limited visibility into small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.6 million to PROTECTION STRATEGIES INC. TAS::75 4552 001::TAS PERSONNEL SECURITY SERVICES 10/01/2011 - 09/30/2011 WITH 4 1-YEAR OPTIONS.

Who is the contractor on this award?

The obligated recipient is PROTECTION STRATEGIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2010-10-01. End: 2018-05-31.

What was the specific nature of the 'Investigation and Personal Background Check Services' provided under this contract?

The contract focused on NAICS code 561611, which encompasses 'Investigation and Personal Background Check Services.' This typically includes services such as pre-employment screening, background investigations for security clearances, suitability determinations, and ongoing monitoring of personnel. For HHS, these services are crucial for ensuring that individuals with access to sensitive health information, government facilities, and critical systems are trustworthy and do not pose a security risk. The specific scope likely involved detailed checks of an individual's history, including employment, education, criminal records, credit history, and references, tailored to the level of access required.

How does the average annual spending of approximately $3.7 million compare to similar federal contracts for personnel security services?

An average annual spending of $3.7 million for personnel security services is a significant but not extraordinary amount for a federal agency like HHS. Benchmarking requires comparing it to contracts with similar scopes (e.g., number of investigations, depth of checks, geographic coverage) and contract types. Larger agencies like the Department of Defense or Department of Homeland Security may award much larger contracts, potentially in the tens or hundreds of millions annually, for comprehensive vetting programs. However, for an agency focused on specific personnel security needs, $3.7 million annually suggests a substantial operational requirement. Without access to a detailed database of comparable contracts with specific service metrics, a precise comparison is difficult, but it indicates a considerable investment in maintaining personnel security.

What are the potential risks associated with a 'Full and Open Competition' award to a single contractor for an extended period?

While 'Full and Open Competition' is generally positive, awarding the entire scope to a single contractor for an extended period (up to 8 years including options) carries risks. One primary risk is potential contractor complacency or reduced incentive to innovate and maintain peak performance over time, as the competitive pressure is removed post-award. There's also a risk of vendor lock-in, making it difficult and costly to switch providers if performance degrades or market conditions change. Furthermore, if the contractor experiences financial instability or operational issues, it could significantly disrupt HHS's personnel security operations. The agency must maintain robust contract management and performance monitoring to mitigate these risks.

What does the contract's performance period (October 2010 - May 2018) suggest about the stability and evolution of HHS's security needs?

The contract's performance period, spanning over 7.5 years, suggests that the need for personnel security services at HHS was considered stable and ongoing during that timeframe. Such long-term contracts often indicate that the services are mission-critical and that the agency required a consistent provider to manage its vetting processes. It also implies that the agency's security requirements did not undergo drastic changes that would necessitate frequent re-competition or shifts in service providers during this period. The inclusion of options further supports the idea of a long-term, evolving requirement that the agency intended to fulfill with a single, trusted partner.

Given the contract was a Delivery Order, what does this imply about the original procurement vehicle and potential competition?

A Delivery Order (DO) is typically issued under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle. This implies that the initial 'Full and Open Competition' likely occurred when the parent IDIQ contract was awarded, establishing a pool of pre-qualified contractors. The Delivery Order itself represents a specific task or requirement placed against that IDIQ. While the initial competition for the IDIQ was broad, the competition for individual Delivery Orders can vary; sometimes they are competed among the IDIQ awardees, while others might be sole-sourced if the IDIQ terms allow. Without knowing the parent contract details, we assume the initial competition was robust.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Investigation and Personal Background Check Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 118 MITCHELL RD STE B, OAK RIDGE, TN, 37830

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,830,012

Exercised Options: $27,620,626

Current Obligation: $27,620,626

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS02F0067T

IDV Type: FSS

Timeline