DHS awarded $25M for security services to Paragon Systems Inc. in FY13, with 1 bid

Contract Overview

Contract Amount: $25,037,453 ($25.0M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2012-10-01

End Date: 2013-09-30

Contract Duration: 364 days

Daily Burn Rate: $68.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF CRITICAL FUNCTIONS ARMED PSO SERVICES, LOS ANGELES, CA. REQ#192113PNILA000001 FY13 SERVICES.

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90012

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.0 million to PARAGON SYSTEMS INC for work described as: IGF::CT::IGF CRITICAL FUNCTIONS ARMED PSO SERVICES, LOS ANGELES, CA. REQ#192113PNILA000001 FY13 SERVICES. Key points: 1. The contract value of $25M for a single year of security services appears high relative to the number of bids received. 2. Limited competition, with only one bid received, raises concerns about potential overpayment and lack of price discovery. 3. The firm-fixed-price contract type shifts risk to the contractor, but the lack of competition may negate savings. 4. The contract was awarded under a BPA Call, suggesting it may be part of a larger pre-competed framework. 5. The services provided fall under Security Guards and Patrol Services, a common requirement for federal facilities. 6. The contract duration of 364 days is standard for annual service contracts. 7. The geographic location in Los Angeles, CA, is a significant cost driver for labor and operational expenses.

Value Assessment

Rating: questionable

The total award of $25,037,452.53 for one year of security services is substantial. Benchmarking against similar contracts for security guards and patrol services in major metropolitan areas is crucial. Given only one bid was received, it is difficult to definitively assess value for money. However, a single bid often indicates potential for inflated pricing compared to a more competitive environment. Without further data on the scope of services and personnel required, a precise value assessment is challenging, but the limited competition warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which is an unusual designation. Typically, 'full and open competition' implies all responsible sources are permitted to compete. The 'exclusion of sources' suggests that some potential bidders were intentionally excluded, or that the initial solicitation was broad but only one source ultimately responded or was qualified. This limited competition, with only one bid received, significantly hinders price discovery and may have led to a higher-than-market price.

Taxpayer Impact: With only one bidder, taxpayers may have paid a premium for these security services, as there was no competitive pressure to drive down costs. The government had limited leverage to negotiate favorable terms or pricing.

Public Impact

The Department of Homeland Security benefits from the provision of security services to protect its facilities and personnel in Los Angeles. The contract delivers essential security guard and patrol services, ensuring a safe and secure environment. The geographic impact is concentrated in Los Angeles, California, providing local employment opportunities for security personnel. The workforce implications include the direct employment of security guards and supervisory staff by Paragon Systems Inc. in the Los Angeles area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of robust competition may lead to inflated pricing and reduced value for taxpayer dollars.
The 'exclusion of sources' clause requires further investigation to understand why potential bidders were not considered or did not participate.
The high contract value for a single bid raises questions about the thoroughness of the market research and solicitation process.
Reliance on a single bidder for critical security services could pose a risk if the contractor fails to perform adequately.

Positive Signals

The contract is firm-fixed-price, which generally transfers cost overrun risk to the contractor.
The services are essential for the operational security of a federal agency.
The contract was awarded under a BPA Call, which may indicate a streamlined procurement process for pre-qualified vendors.

Sector Analysis

The Security Guards and Patrol Services sector (NAICS 561612) is a significant component of the private security industry. Federal agencies are major consumers of these services, contracting for physical security at facilities nationwide. The market is characterized by a mix of large, established security firms and smaller, specialized providers. Federal contracts often require specific clearances, certifications, and adherence to stringent performance standards. This contract represents a substantial investment within this sector for the Los Angeles region.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award. However, the prime contractor, Paragon Systems Inc., may utilize small businesses for support services, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's contracting officer and program managers. The Inspector General's office for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, but detailed performance metrics and oversight reports are not publicly available in this summary.

Related Government Programs

DHS Security Services
Federal Protective Service Contracts
Security Guard Services
Law Enforcement Support Services

Risk Flags

Limited Competition
Potential for Overpricing
Unclear Source Exclusion Rationale

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.0 million to PARAGON SYSTEMS INC. IGF::CT::IGF CRITICAL FUNCTIONS ARMED PSO SERVICES, LOS ANGELES, CA. REQ#192113PNILA000001 FY13 SERVICES.

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $25.0 million.

What is the period of performance?

Start: 2012-10-01. End: 2013-09-30.

What is the track record of Paragon Systems Inc. in performing similar federal contracts, particularly for the Department of Homeland Security?

Paragon Systems Inc. has a history of securing and performing federal contracts, including those related to security services. A deeper dive into their contract performance history with DHS and other agencies would reveal their reliability, past performance ratings, and any significant issues or disputes. Examining past awards and their values can also provide context for the $25M contract. Information on contract closeouts, any penalties incurred, or positive performance reviews would offer a more comprehensive picture of their capabilities and trustworthiness as a federal contractor.

How does the awarded price of $25M for one year of security services compare to market rates for similar services in Los Angeles, CA?

Benchmarking this $25M contract against market rates for security services in Los Angeles is critical for assessing value. Factors such as the number of guards, hours of service, required skill sets (e.g., armed vs. unarmed, specialized training), and the specific security needs of the DHS facilities are essential for a fair comparison. Without these details, a precise comparison is difficult. However, given the single bid, there is a strong possibility that the price is above what might be achieved in a more competitive environment. Further analysis would require detailed service requirements and data from other federal or large commercial contracts in the same geographic area.

What specific 'sources' were excluded in the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation, and why?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' is unusual and warrants clarification. It suggests that while the solicitation was intended to be open, certain potential sources were either not considered eligible, were disqualified, or chose not to participate for reasons not immediately apparent. Understanding the rationale behind excluding sources is crucial. It could stem from specific technical requirements, past performance issues, or even a flawed solicitation process. If legitimate reasons existed for exclusion, it might explain the single bid. However, if the exclusions were arbitrary or improperly applied, it could indicate a flawed procurement process that limited competition unfairly.

What were the specific security requirements and scope of work that justified a $25M award for a single year?

The justification for the $25M award hinges on the detailed scope of work and specific security requirements outlined in the contract. This would include the number of personnel required, their posts, hours of operation, required certifications (e.g., armed guards, specific training), the size and criticality of the facilities being protected, and any specialized security measures. A high value suggests a significant operational footprint, potentially involving numerous posts, 24/7 coverage, or high-risk environments requiring highly trained personnel. Without access to the Performance Work Statement (PWS), it is difficult to ascertain if the cost is commensurate with the services rendered.

What is the historical spending pattern for security services at this DHS location or for similar services provided by DHS?

Analyzing historical spending patterns for security services at this specific DHS location or for comparable contracts within DHS is vital for context. If previous years' spending was significantly lower, it could indicate scope creep, inflation, or a less competitive award this year. Conversely, if spending has consistently been in this range, it suggests the cost is aligned with the agency's ongoing security needs. Examining trends over several fiscal years can reveal patterns of increasing costs, changes in service requirements, or shifts in contracting strategies, providing a baseline against which the current $25M award can be evaluated.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Securitas AB

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, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,037,453

Exercised Options: $25,037,453

Current Obligation: $25,037,453

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSCEW909A00003

IDV Type: BPA

Timeline