Covenant Aviation Security awarded $355.6M for security guard services by DHS TSA

Contract Overview

Contract Amount: $355,622,446 ($355.6M)

Contractor: Covenant Aviation Security, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2006-11-01

End Date: 2011-02-28

Contract Duration: 1,580 days

Daily Burn Rate: $225.1K/day

Competition Type: FULL AND OPEN COMPETITION

Sector: Other

Place of Performance

Location: SAN FRANCISCO, SAN MATEO County, CALIFORNIA, 94128, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $355.6 million to COVENANT AVIATION SECURITY, LLC for work described as: Key points: 1. Contract value represents significant investment in national security infrastructure. 2. Full and open competition suggests a robust market for security services. 3. Long contract duration (1580 days) indicates a need for sustained service delivery. 4. The award to a single entity, Covenant Aviation Security, warrants scrutiny of performance and pricing over time. 5. Geographic focus on California (SN: CALIFORNIA) highlights regional security needs. 6. The contract's primary service code (NAICS 561612) is common across federal security procurements.

Value Assessment

Rating: fair

The total award amount of $355.6 million over approximately 4.3 years suggests a substantial investment. Benchmarking this against similar large-scale security contracts is challenging without more granular data on service levels and geographic coverage. The contract type (BPA) implies a framework agreement, and the actual spending may vary. However, the sheer scale necessitates careful monitoring of performance and cost-effectiveness throughout its life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally favorable for price discovery and ensuring the government receives competitive offers. The specific number of bidders is not provided, but the designation suggests a healthy market for these services.

Taxpayer Impact: Taxpayers benefit from the potential for lower prices and better service quality due to a competitive bidding environment.

Public Impact

Benefits federal agencies by providing essential security guard services. Ensures the safety and security of transportation infrastructure and personnel. Impacts the workforce through employment opportunities for security guards in California. Contributes to the overall national security posture by protecting critical assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to long contract duration.
Need for ongoing performance monitoring to ensure service quality.
Risk of cost overruns if not managed effectively.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Long-term contract provides stability for service delivery.
Focus on a critical national security function.

Sector Analysis

This contract falls within the security and guard services sector, a significant market driven by government and private sector needs for physical security. The NAICS code 561612 specifically covers security guards and patrol services. Federal spending in this area is substantial, reflecting the ongoing demand for security at airports, federal buildings, and other sensitive locations. This award represents a notable portion of federal expenditure within this specific service category.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). Therefore, the primary contractor, Covenant Aviation Security, LLC, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award, which could represent a missed opportunity for small business participation in federal contracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's procurement and program management offices, with specific oversight likely by the Transportation Security Administration. The contract's duration and value suggest regular performance reviews and financial audits would be standard. Transparency would be facilitated through contract award databases and performance reporting requirements.

Related Government Programs

Federal Protective Service Contracts
Airport Security Services
Department of Homeland Security Security Contracts
Transportation Security Administration Contracts

Risk Flags

Long contract duration may require careful monitoring for performance degradation.
Lack of specific small business subcontracting goals could limit opportunities for smaller firms.
Performance data is not publicly available to assess contractor effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $355.6 million to COVENANT AVIATION SECURITY, LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is COVENANT AVIATION SECURITY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $355.6 million.

What is the period of performance?

Start: 2006-11-01. End: 2011-02-28.

What is the historical spending trend for security guard services by the TSA?

Analyzing historical spending trends for TSA's security guard services requires access to detailed historical contract data beyond this single award. However, general trends in federal security spending indicate a consistent and often increasing demand, particularly post-9/11. Factors such as evolving threat landscapes, expansion of transportation networks, and legislative mandates influence budget allocations. While this specific contract represents a significant sum ($355.6M), understanding the broader trend would involve examining annual outlays for NAICS 561612 and related security services across multiple fiscal years and contract vehicles used by the TSA and DHS.

How does Covenant Aviation Security's performance on this contract compare to industry benchmarks?

Assessing Covenant Aviation Security's performance on this specific contract against industry benchmarks requires access to performance metrics, quality assurance reports, and potentially customer satisfaction surveys related to this award. Without such detailed performance data, a direct comparison is not feasible. Industry benchmarks for security guard services often focus on factors like response times, incident reporting accuracy, personnel training levels, and adherence to post orders. If available, contractor performance assessment reporting (CPARs) would provide insights into their track record on federal contracts.

What is the typical profit margin for companies providing security guard services to the federal government?

Typical profit margins for companies providing security guard services to the federal government can vary widely based on contract specifics, overhead costs, competition level, and the scope of services. Generally, the federal contracting environment aims for fair and reasonable pricing, which implies competitive but not excessively high profit margins. Industry analyses often place profit margins for government contracting services in the range of 5-15%, though this can fluctuate. Factors like labor costs, training investments, and the complexity of security requirements influence the achievable profit for contractors like Covenant Aviation Security.

What are the key performance indicators (KPIs) used to evaluate this contract?

Key Performance Indicators (KPIs) for a contract of this nature, providing security guard services, would likely focus on operational effectiveness and compliance. Common KPIs include: adherence to post orders and schedules, response times to incidents, accuracy and timeliness of incident reporting, personnel qualifications and training compliance, and overall security presence effectiveness. The Transportation Security Administration (TSA) would establish specific metrics within the contract's Performance Work Statement (PWS) to measure the contractor's success in maintaining security standards and protecting assets.

What is the potential impact of this contract on small businesses in the security services sector?

As this contract was awarded under full and open competition and not specifically set aside for small businesses, its direct impact on small businesses is limited unless subcontracting opportunities are actively pursued. While large contracts can sometimes create downstream opportunities for smaller specialized firms, the absence of a small business set-aside or explicit subcontracting goals means that small businesses may not be primary beneficiaries. The focus is on the prime contractor, Covenant Aviation Security, LLC. However, the overall federal spending in this sector does support a broader ecosystem where small businesses may compete for other, smaller contracts or specialized roles.

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

Evaluated Preference: NONE

Contractor Details

Address: 270 REMINGTON RIGHT BLVD STE B, BOLINGBROOK, IL, 60440

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $439,298,360

Exercised Options: $355,622,446

Current Obligation: $355,622,446

Parent Contract

Parent Award PIID: HSTS0105ASPP817

IDV Type: BPA

Timeline