HHS awarded $34.6M for security services to Paragon Systems Inc. over 6 years

Contract Overview

Contract Amount: $34,636,958 ($34.6M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2015-05-01

End Date: 2021-04-30

Contract Duration: 2,191 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF PARKLAWN COMPLEX SECURITY GUARD AND PROTECTIVE SERVICES CONTRACT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $34.6 million to PARAGON SYSTEMS INC for work described as: IGF::CL::IGF PARKLAWN COMPLEX SECURITY GUARD AND PROTECTIVE SERVICES CONTRACT Key points: 1. The contract utilized a firm-fixed-price structure, which shifts cost risk to the contractor. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The contract duration of 6 years (2191 days) is substantial for security services. 4. The North American Industry Classification System (NAICS) code 561612 indicates a focus on security guards and patrol services. 5. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle. 6. The contractor, Paragon Systems Inc., has a significant contract history with the federal government. 7. The contract was awarded to a single entity, Paragon Systems Inc.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more detailed service level agreements and performance metrics. However, the total award of $34.6 million over approximately six years for security services across potentially multiple HHS facilities suggests a significant investment. Without specific details on the scope of services, number of personnel, or geographic coverage, a precise value-for-money assessment is challenging. Comparing this to similar large-scale federal security contracts would provide better context for pricing and efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 7 bidders suggests a reasonably competitive environment for this type of service. A higher number of bidders generally leads to more competitive pricing and better value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs and improving service quality through innovation.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) and its personnel, who receive protection and security for facilities and assets. The services delivered include security guard and protective services, ensuring a safe environment. The contract is geographically focused on Maryland (MD), indicating the primary location of the facilities being secured. The contract supports jobs within the security services industry, likely employing numerous security personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single large contractor for critical security functions.
The long duration of the contract could lead to complacency or reduced incentive for continuous improvement if not managed effectively.
Scope creep or unmanaged changes in service requirements could lead to cost overruns if not carefully controlled within the firm-fixed-price structure.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a robust bidding process that should yield competitive pricing.
The contractor, Paragon Systems Inc., is an established entity with experience in federal contracts.
The contract specifies security guard and protective services, addressing a clear government need.

Sector Analysis

The security services industry is a significant sector within the broader professional, scientific, and technical services market. Federal contracts for security guards and protective services are common across various agencies, driven by the need to protect government personnel, facilities, and sensitive information. The market is characterized by a mix of large, established providers and smaller, specialized firms. Spending benchmarks for similar contracts vary widely based on the scope, duration, and specific services required, but large multi-year contracts like this represent substantial portions of agency security budgets.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this particular award. However, the prime contractor may engage small businesses as subcontractors, which would need to be tracked separately.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the HHS Office of the Assistant Secretary for Administration. Performance monitoring, invoice review, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

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

Risk Flags

Long contract duration may reduce flexibility.
Potential for contractor complacency over extended period.
Scope definition critical for firm-fixed-price success.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $34.6 million to PARAGON SYSTEMS INC. IGF::CL::IGF PARKLAWN COMPLEX SECURITY GUARD AND PROTECTIVE SERVICES CONTRACT

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 the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $34.6 million.

What is the period of performance?

Start: 2015-05-01. End: 2021-04-30.

What is the historical spending pattern for security services at HHS, and how does this contract compare?

Historical spending on security services by the Department of Health and Human Services (HHS) can be substantial, reflecting the agency's vast infrastructure and numerous facilities. While specific historical data for HHS security contracts is not provided here, federal agencies generally allocate significant budgets to physical security. This $34.6 million contract over six years represents an average annual expenditure of approximately $5.77 million. To compare, one would need to analyze prior HHS contracts for similar services, considering factors like the number of facilities covered, personnel hours, and specific security technologies deployed. Benchmarking against other large federal agencies with comparable facility footprints, such as the Department of Veterans Affairs or the General Services Administration, would also provide valuable context for assessing whether this spending level is consistent with market rates and government needs.

What is Paragon Systems Inc.'s track record with federal security contracts?

Paragon Systems Inc. is a well-established contractor with a significant history of providing security services to various U.S. federal agencies. Their portfolio includes contracts with departments such as Homeland Security, Defense, and Justice, among others. This extensive experience suggests a familiarity with federal procurement regulations, security standards, and operational requirements. The company's track record can be further assessed by reviewing past performance evaluations, any reported contract disputes or terminations, and the scale and complexity of previous contracts they have managed. A review of federal contract databases often reveals a consistent pattern of awards to Paragon Systems Inc. for guard, protective, and security-related services, indicating a sustained level of trust and capability recognized by government contracting officers.

How does the firm-fixed-price (FFP) contract type impact value and risk for this security services contract?

A firm-fixed-price (FFP) contract type, as used in this $34.6 million security services award, is designed to provide the government with price certainty and shift most of the cost risk to the contractor, Paragon Systems Inc. Under an FFP agreement, the contractor is obligated to perform the specified work for a predetermined price, regardless of their actual costs. This structure incentivizes the contractor to manage their expenses efficiently and control performance to maintain profitability. For the government, the primary benefit is budget predictability, as the total cost is known upfront. However, this also means that if the contractor encounters unforeseen cost increases, they absorb those losses. Conversely, if the contractor is highly efficient, they may realize higher profit margins. The effectiveness of an FFP contract relies heavily on a well-defined scope of work to prevent disputes and ensure the contractor fully understands their obligations.

What are the potential risks associated with a six-year contract for security services?

A six-year duration for a security services contract presents several potential risks. Firstly, there's the risk of contractor complacency; over an extended period, the contractor might reduce efforts to innovate or improve service quality if performance monitoring is not rigorous. Secondly, the security landscape and specific needs of HHS facilities could evolve significantly over six years. If the contract doesn't include mechanisms for flexible adaptation to changing threats or requirements, it could become outdated or insufficient. Thirdly, long-term contracts can sometimes lead to less competitive pricing over time compared to shorter, re-competed contracts, especially if market conditions change favorably for the government. Finally, there's the risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or a better solution becomes available.

How does the competition level (7 bidders) influence the outcome for taxpayers in this contract?

A competition level involving seven bidders for this $34.6 million security services contract is generally a positive indicator for taxpayers. A larger pool of bidders typically fosters a more competitive environment, encouraging each company to offer its best pricing and service proposals to win the award. This increased competition can lead to lower overall costs for the government compared to a situation with fewer bidders. Furthermore, it provides the contracting agency, HHS, with a wider range of options and potentially greater innovation in service delivery. The presence of multiple bidders also suggests that the contract requirements were clearly defined and accessible to a broad range of qualified companies, reducing the likelihood of a sole-source or limited-competition scenario that often results in higher prices for taxpayers.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 13900 LINCOLN PARK DR STE 300, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,636,958

Exercised Options: $34,636,958

Current Obligation: $34,636,958

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS07F0418K

IDV Type: FSS

Timeline