HUD's $26.6M security contract with Master Security Company LLC awarded via full and open competition

Contract Overview

Contract Amount: $26,574,749 ($26.6M)

Contractor: Master Security Company LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2009-09-01

End Date: 2015-02-14

Contract Duration: 1,992 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NEW GUARD CONTRACT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $26.6 million to MASTER SECURITY COMPANY LLC for work described as: NEW GUARD CONTRACT SERVICES Key points: 1. Contract awarded through a competitive process, suggesting potential for value. 2. The contract duration of 1992 days (over 5 years) indicates a long-term need for services. 3. Firm Fixed Price contract type helps control costs and manage budget predictability. 4. The contract was awarded to a single entity, Master Security Company LLC. 5. The North American Industry Classification System (NAICS) code 561612 points to security guard services. 6. The contract was awarded by the Department of Housing and Urban Development (HUD). 7. The contract was awarded as a Definitive Contract. 8. The contract was awarded after exclusion of sources, indicating a specific justification for the procurement method.

Value Assessment

Rating: fair

The total award amount of $26.6 million over approximately 5.5 years averages to about $4.8 million annually. Benchmarking this against similar large-scale security contracts for federal agencies is challenging without more specific service level agreements and geographic coverage details. However, the firm fixed-price nature of the contract suggests that the government aimed to lock in costs, which can be a good value indicator if the scope was well-defined and market rates were competitive at the time of award. The number of bids received (11) provides some basis for comparison, but without knowing the quality and completeness of those bids, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This procurement method implies that while the competition was intended to be full and open, certain sources were excluded, likely due to specific requirements or justifications. The fact that 11 bids were received indicates a degree of competition, but the exclusion of sources might limit the breadth of competition and potentially impact price discovery compared to a truly unrestricted full and open competition. Further details on the reasons for excluding sources would be necessary for a complete assessment.

Taxpayer Impact: The exclusion of sources, even with 11 bidders, may have limited the potential for the most competitive pricing. Taxpayers benefit from competition, and any restriction, even if justified, could mean slightly higher costs than if all potential qualified vendors had been allowed to bid.

Public Impact

Provides essential security guard and patrol services for facilities managed by the Department of Housing and Urban Development. Ensures the safety and security of government property and personnel. Services are geographically concentrated in the District of Columbia. Supports employment for security personnel employed by Master Security Company LLC. Contributes to the operational continuity of HUD's mission by protecting its assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' clause warrants scrutiny to ensure the exclusion was justified and did not unduly restrict competition.
The long contract duration (over 5 years) could lead to potential complacency or a need for contract re-evaluation to ensure continued market competitiveness.
Reliance on a single contractor for an extended period might pose risks if the contractor's performance degrades or if market conditions change significantly.

Positive Signals

Awarded through a competitive process (11 bids received), indicating an effort to secure a reasonable price and quality.
Firm Fixed Price contract type provides cost certainty for the government.
The contract addresses a critical need for security services for a federal agency.
The services are geographically specific, potentially allowing for focused oversight and efficient service delivery.

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 patrol services are common across various agencies to protect government assets and personnel. This contract falls within the established market for physical security services, which includes guarding, patrolling, and alarm monitoring. The total federal spending on security services is substantial, and this contract represents one component of that overall expenditure. Benchmarking this contract's value would ideally involve comparing its per-hour or per-guard rates against similar federal or commercial contracts in the Washington D.C. metropolitan area.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration, as the 'small business' flag is false. There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the primary contractor, Master Security Company LLC, likely performed the majority of the work directly. The impact on the small business ecosystem would be minimal unless Master Security Company LLC had its own robust small business subcontracting program, which is not detailed here. Future procurements might consider specific small business set-aside goals to foster greater participation.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Housing and Urban Development's contracting officers and program managers. As a Definitive Contract awarded under full and open competition, it is subject to standard federal procurement regulations and oversight. Transparency is generally maintained through contract award databases like FPDS. Specific accountability measures would be detailed in the contract's performance work statement and terms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

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

Risk Flags

Competition Restriction
Long Contract Duration
Potential for Performance Degradation
Lack of Small Business Subcontracting Detail

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $26.6 million to MASTER SECURITY COMPANY LLC. NEW GUARD CONTRACT SERVICES

Who is the contractor on this award?

The obligated recipient is MASTER SECURITY COMPANY LLC.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2009-09-01. End: 2015-02-14.

What was the specific justification for excluding certain sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award?

The provided data indicates the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This procurement method suggests that while the intent was to compete broadly, specific vendors or categories of vendors were intentionally excluded from bidding. Common reasons for such exclusions include highly specialized requirements that only a limited number of firms can meet, urgent needs where only certain contractors have the capacity or existing knowledge, or specific national security concerns. Without access to the contract file or the Justification for Other than Full and Open Competition (JOFOC) document, the precise reasons for exclusion remain unknown. However, the fact that 11 bids were still received implies that the exclusion did not entirely stifle competition, but it raises questions about whether a broader pool of bidders could have resulted in even more competitive pricing or innovative solutions for HUD.

How does the $26.6 million contract value compare to other federal security contracts of similar scope and duration?

Directly comparing the $26.6 million value of this contract to others is challenging without detailed scope, service level, and geographic information. However, the contract's duration of approximately 5.5 years (1992 days) means the average annual value is around $4.8 million. Federal contracts for security services can vary widely. For large agencies with significant physical footprints, annual spending on security can range from a few million to tens of millions of dollars. The fact that 11 bids were received suggests a competitive market for these services. To provide a more precise comparison, one would need to analyze contracts for similar services (guarding, patrol) awarded by agencies of comparable size and in similar geographic regions (like the D.C. metro area) during the contract's award period (around 2009-2015), looking at metrics like cost per guard hour or cost per square foot protected.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

Firm Fixed Price (FFP) contracts are designed to provide cost certainty to the government. However, for a contract of this magnitude ($26.6M) and duration (over 5 years), potential risks exist. If the initial scope of work was not perfectly defined or if unforeseen circumstances arise, the contractor might face challenges in meeting performance requirements within the fixed price, potentially leading to disputes or reduced service quality. Conversely, if the scope was underestimated by the government or if market conditions change significantly (e.g., labor costs increase), the contractor might realize higher-than-expected profits. The long duration also increases the risk of contractor performance degradation over time, requiring diligent oversight to ensure continued adherence to contract terms and quality standards. The 'after exclusion of sources' aspect could also be a risk if it limited the pool of highly capable, potentially more cost-effective providers.

What does the number of bidders (11) suggest about the competitiveness of the security services market for HUD?

Receiving 11 bids for this security services contract suggests a reasonably competitive market for such services relevant to HUD's needs. A higher number of bidders generally indicates that multiple companies possess the capability and interest to compete for federal contracts. This level of competition is beneficial for the government as it increases the likelihood of receiving competitive pricing and potentially more innovative solutions. However, the 'after exclusion of sources' clause tempers this positive signal. While 11 bids were submitted, the exclusion means that the competition was not entirely unrestricted. The true competitiveness also depends on the quality and completeness of the bids submitted. Nonetheless, 11 bidders is a solid number that likely contributed to price discovery and allowed HUD to select a qualified vendor.

How has federal spending on security guards and patrol services (NAICS 561612) evolved since this contract was awarded?

Since this contract was awarded (around 2009-2015), federal spending on security guards and patrol services (NAICS 561612) has generally remained a significant category within federal procurement. While specific year-over-year trends fluctuate based on agency needs, budget allocations, and geopolitical factors, the overall demand for physical security services by the government has been consistent. Data from sources like the Federal Procurement Data System (FPDS) would show that billions of dollars are awarded annually across various agencies for these services. Factors influencing spending include increased security awareness post-9/11, the need to protect critical infrastructure, and the ongoing requirement to secure federal buildings and personnel. It's likely that spending in this category has seen moderate growth, influenced by inflation and evolving security threats, though specific figures would require detailed analysis of procurement databases.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10946-DBEAVER DAM RD, COCKEYSVILLE, MD, 21030

Business Categories: Category Business, HUBZone Firm, Partnership or Limited Liability Partnership, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $26,574,749

Exercised Options: $26,574,749

Current Obligation: $26,574,749

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline