State Department's $86M Security Services Contract Awarded to Undisclosed Domestic Firms

Contract Overview

Contract Amount: $85,991,887 ($86.0M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of State

Start Date: 2010-06-18

End Date: 2012-02-14

Contract Duration: 606 days

Daily Burn Rate: $141.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $86.0 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OVERSEAS CONTRACT Key points: 1. Contract value represents a significant investment in security services for overseas operations. 2. The use of full and open competition suggests a potentially robust market for these services. 3. The undisclosed nature of the domestic awardees raises questions about transparency and potential bidder engagement. 4. The contract duration of over 600 days indicates a long-term need for these security functions. 5. Fixed-price contract type shifts performance risk to the contractor. 6. The specific NAICS code (561612) points to a specialized security and investigation services market.

Value Assessment

Rating: fair

Benchmarking the value-for-money for this contract is challenging due to the undisclosed awardees and the specific nature of overseas security services. The contract's value of approximately $86 million over roughly two years suggests a substantial per-annum cost. Without comparable contract data for similar overseas security operations or detailed cost breakdowns, it's difficult to definitively assess if this represents a competitive price. The fixed-price nature, however, implies that the contractor bears the risk of cost overruns, which can be a positive indicator if managed effectively.

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 offers. The number of bidders is not specified, but this method of procurement is generally expected to foster price discovery and encourage competitive pricing. However, the fact that the awardees are undisclosed limits the ability to analyze the breadth of competition and the specific market dynamics that influenced the final award price.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of potential providers. The undisclosed awardees, however, prevent a full assessment of how effectively this competition translated into taxpayer savings.

Public Impact

The primary beneficiaries are likely the Department of State personnel and facilities requiring security services at overseas locations. The services delivered include security guards and patrol services, crucial for maintaining safety and order in potentially high-risk environments. The geographic impact is focused on overseas posts where the Department of State operates. Workforce implications include the potential employment of security personnel, both directly by the awardees and indirectly through related support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding awardee identity hinders assessment of contractor responsibility and past performance.
The broad scope of 'Security Guards and Patrol Services' could encompass a wide range of requirements, making precise value assessment difficult without further detail.
The contract's overseas nature may introduce complexities in oversight and performance monitoring.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The firm fixed-price contract type transfers cost overrun risk to the contractor.
The contract addresses a critical need for security in sensitive environments.

Sector Analysis

The security and investigation services industry is a significant sector within the broader professional, scientific, and technical services market. This contract falls under the Security Guards and Patrol Services category (NAICS 561612), which includes establishments primarily engaged in providing security guards and patrol services. The market is characterized by a mix of large, established firms and smaller specialized providers. Government contracts, particularly for overseas operations, represent a substantial portion of this market due to the unique security challenges faced by federal agencies.

Small Business Impact

Information regarding small business participation, including set-asides or subcontracting plans, is not provided in the data. Without this information, it is impossible to assess the impact of this contract on the small business ecosystem or whether opportunities were specifically allocated to small businesses.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the contracting officer's representative (COR) at the Department of State, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are inherent in the firm fixed-price structure, which incentivizes contractor performance. Transparency is limited by the undisclosed nature of the awardees; however, contract award data is generally available through federal procurement databases. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of State Overseas Security Operations
Federal Protective Service Contracts
Department of Defense Security Services
Embassy Security Contracts

Risk Flags

Undisclosed Awardee Identity
Limited Transparency in Competition Analysis
Potential for Overstated Value Without Benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $86.0 million to DOMESTIC AWARDEES (UNDISCLOSED). OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $86.0 million.

What is the period of performance?

Start: 2010-06-18. End: 2012-02-14.

What is the typical cost range for similar overseas security guard and patrol services contracts awarded by the Department of State?

Determining a precise typical cost range for similar overseas security guard and patrol services is challenging without access to a comprehensive database of historical contracts with detailed scopes of work and geographic locations. However, contracts of this nature, especially those supporting high-risk overseas posts, can vary significantly based on factors such as the number of personnel required, the level of security clearance, the specific threat environment, and the duration of the contract. Given the $86 million value over approximately two years, this contract represents a substantial investment. For context, other federal agencies have awarded multi-year security contracts ranging from tens of millions to hundreds of millions of dollars, depending on the scale and complexity of the security requirements. The specific NAICS code 561612 covers a broad spectrum of services, and overseas operations often command a premium due to logistical challenges and heightened security needs.

What are the potential risks associated with awarding a large security contract to undisclosed domestic firms?

Awarding a significant security contract to undisclosed domestic firms presents several potential risks. Firstly, the lack of transparency regarding the awardees' identities makes it difficult to conduct thorough due diligence on their past performance, financial stability, and any potential conflicts of interest. This opacity can obscure whether the selected firms have a proven track record in delivering complex security services, especially in challenging overseas environments. Secondly, if the awardees are not well-known entities within the security sector, it could indicate a less competitive bidding process than initially suggested by 'full and open competition,' potentially leading to suboptimal pricing or service quality. Finally, undisclosed awardees can raise concerns about accountability; if issues arise, identifying and addressing them with the responsible party might be more complicated. This lack of public information hinders the ability of oversight bodies and the public to assess the contractor's suitability and the overall value for taxpayer money.

How does the firm fixed-price contract type impact the government's financial exposure and the contractor's performance incentives?

The firm fixed-price (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and risks can be reasonably estimated. Under an FFP contract, the contractor agrees to a set price for the specified goods or services, regardless of the actual costs incurred. This structure shifts the primary financial risk from the government to the contractor. If the contractor's costs exceed the agreed-upon price, their profit margin decreases, or they may incur a loss. Conversely, if they manage costs effectively and complete the work under budget, their profit increases. This provides a strong incentive for the contractor to control costs, improve efficiency, and deliver the services as specified to maximize their profit. For the government, the primary benefit is cost certainty; the total expenditure is known upfront, simplifying budgeting and financial planning. However, the government assumes the risk that the contractor might cut corners on quality to maintain profitability if oversight is insufficient.

What does the duration of 606 days (approximately 20 months) imply about the nature of the security services required?

A contract duration of 606 days, approximately 20 months, suggests that the security services required are not short-term or ad-hoc but rather represent an ongoing, sustained need. This duration is typical for contracts that involve the continuous provision of security personnel, regular patrols, monitoring of facilities, and potentially response to incidents over an extended period. Such long-term requirements often indicate the establishment of a stable security posture at one or more overseas locations, rather than a temporary surge in security needs. The extended timeframe also allows for the development of established relationships between the security provider and the government agency, potentially leading to greater efficiency and understanding of specific operational requirements. Furthermore, a longer contract duration can sometimes be associated with more competitive pricing, as contractors can better plan resources and amortize startup costs over a longer period.

Can the NAICS code 561612 (Security Guards and Patrol Services) provide insights into the specific types of security personnel or equipment likely involved?

The North American Industry Classification System (NAICS) code 561612, 'Security Guards and Patrol Services,' broadly categorizes establishments primarily engaged in providing security guards and patrol services. This typically includes armed and unarmed guards, patrol services, and related security monitoring. For an overseas contract of this magnitude, it likely encompasses a range of services beyond basic guarding, potentially including access control, surveillance, perimeter security, and response teams. The specific nature of the services would depend on the threat assessment of the locations being secured. While the NAICS code itself doesn't detail specific equipment, it implies the need for personnel trained in security protocols, potentially including the use of communication devices, basic defensive equipment, and surveillance technology. The contract might also involve background checks and vetting of personnel, as well as adherence to specific security standards mandated by the Department of State for overseas operations.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $121,649,150

Exercised Options: $121,649,150

Current Obligation: $85,991,887

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SAQMPD05D1098

IDV Type: IDC

Timeline