State Department spent $178M on overseas security guards, a contract awarded without competition

Contract Overview

Contract Amount: $178,066,760 ($178.1M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of State

Start Date: 2011-04-01

End Date: 2014-11-25

Contract Duration: 1,334 days

Daily Burn Rate: $133.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $178.1 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OVERSEAS CONTRACT Key points: 1. The contract's value of $178 million over three years indicates significant investment in security services. 2. The lack of competition suggests potential for higher costs and reduced innovation. 3. The 'NOT COMPETED' award type is a key risk indicator, potentially limiting price discovery. 4. The contract duration of 1334 days (approx. 3.6 years) suggests a long-term need for these services. 5. The service category 'Security Guards and Patrol Services' is critical for overseas operations. 6. The absence of disclosed domestic awardees raises transparency concerns.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable awarded contracts or detailed service scope. However, a $178 million expenditure on security services over approximately 3.6 years, awarded on a non-competitive basis, warrants scrutiny. The lack of competition could lead to prices above fair market value, as there was no mechanism to solicit the best possible pricing from multiple vendors. Without further data on the specific services rendered and the number of personnel involved, a precise per-unit cost comparison is not feasible.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED,' indicating a sole-source award. This means the Department of State did not solicit bids from multiple potential contractors. The implications for price discovery are significant; without a competitive bidding process, there is no assurance that the government received the most advantageous pricing. This approach can sometimes be justified for specialized services or urgent needs, but it bypasses the standard mechanisms for ensuring value for money.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The lack of a competitive process limits the government's ability to negotiate favorable terms and potentially secure lower prices.

Public Impact

U.S. diplomatic missions and personnel overseas benefit from enhanced security. Essential security guard and patrol services are delivered to protect government assets and personnel in potentially high-risk environments. The geographic impact is global, covering overseas locations where U.S. interests are present. The contract likely supports a significant number of security personnel, impacting the workforce in the regions where services are provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The 'NOT COMPETED' status limits transparency and accountability in the procurement process.
Undisclosed domestic awardees obscure the identity of the entity receiving significant federal funds.
The long contract duration without competition could indicate a missed opportunity for cost savings through re-competition.

Positive Signals

The contract addresses a critical need for security in overseas operations, which is vital for diplomatic functions.
The significant value suggests a comprehensive security solution was likely implemented.
The award was made to a domestic entity, implying adherence to U.S. contracting standards.

Sector Analysis

The security services sector is a substantial part of the federal contracting landscape, particularly for agencies operating abroad. This contract falls within the broader category of protective services. The market for security guards and patrol services is diverse, ranging from large multinational corporations to smaller specialized firms. Federal spending in this area is often driven by the need to protect personnel and assets in various environments, including high-risk overseas locations. Comparable spending benchmarks are difficult to establish without knowing the specific security requirements and geographic locations, but $178 million represents a significant investment.

Small Business Impact

The data indicates this contract was not competed and does not specify small business set-asides or subcontracting. Without this information, it's impossible to assess the impact on the small business ecosystem. Typically, large, non-competed contracts may offer fewer direct opportunities for small businesses unless the prime contractor actively engages in subcontracting with them. The absence of explicit small business participation goals or reporting suggests this contract may not have been structured to maximize small business involvement.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. However, as a Department of State contract, it would typically fall under the purview of the Department's Office of Inspector General (OIG) for audits and investigations. Transparency is limited by the 'NOT COMPETED' status and the undisclosed awardee. Accountability would primarily rest with the contracting officer and the program managers responsible for overseeing the contractor's performance and ensuring compliance with contract terms.

Related Government Programs

Department of State Diplomatic Security Service
Overseas Security Operations
Global Security Contracts
Protective Services Contracts

Risk Flags

Lack of Competition
Lack of Transparency (Undisclosed Awardee)
Time and Materials Contract Type Risk
Significant Contract Value

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $178.1 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 $178.1 million.

What is the period of performance?

Start: 2011-04-01. End: 2014-11-25.

What specific security services were provided under this contract?

The contract falls under the North American Industry Classification System (NAICS) code 561612 for Security Guards and Patrol Services. This typically includes providing uniformed or plainclothes personnel to guard property against theft and unauthorized access, patrol industrial and business premises, and maintain order. For overseas operations, these services often extend to protecting U.S. embassies, consulates, and other diplomatic facilities, including personnel, visitors, and government property. The scope could encompass access control, surveillance, response to security incidents, and potentially specialized security assessments, depending on the specific requirements outlined in the contract's statement of work.

Why was this contract not competed, and what are the implications for cost?

The data explicitly states the contract was 'NOT COMPETED.' Reasons for sole-sourcing can include urgent and compelling needs, unique capabilities of a single provider, or situations where only one responsible source exists. However, the lack of competition generally implies a higher risk of paying above fair market value. Without a competitive bidding process, the government loses the opportunity to leverage market forces to drive down prices and ensure the most cost-effective solution. This can result in taxpayers bearing a higher cost for the services rendered compared to a fully competed contract.

What is the typical duration and value range for similar overseas security contracts?

The duration of this contract was 1334 days (approximately 3.6 years), and its value was $178 million. Contracts for overseas security services can vary widely in duration and value depending on the location, threat level, size of the facility, and specific services required. Longer-term contracts (3-5 years) are common for ongoing security needs. Values can range from hundreds of thousands to hundreds of millions of dollars. A $178 million contract over 3.6 years suggests a large-scale, long-term security requirement, possibly covering multiple high-risk posts or a significant diplomatic mission.

What does the 'DOMESTIC AWARDEES (UNDISCLOSED)' status signify?

This notation indicates that the contractor awarded the contract is a U.S.-based entity, but its specific name is not publicly disclosed in this data set. This lack of transparency can be a concern for public accountability, as it prevents easy identification of which company received substantial government funds. While proprietary reasons or security considerations might sometimes lead to non-disclosure in certain contexts, for a contract of this magnitude, transparency regarding the awardee is generally expected to allow for public scrutiny of contractor performance and potential conflicts of interest.

What are the potential risks associated with a 'TIME AND MATERIALS' contract type for security services?

The contract type is 'TIME AND MATERIALS' (T&M). T&M contracts are generally used when the extent or duration of the work cannot be determined in advance. For security services, this could mean paying based on the hours worked by personnel and the cost of materials used. A significant risk with T&M contracts, especially when not competitively priced or closely monitored, is the potential for cost overruns. Without fixed price elements or strong oversight, contractors may have less incentive to control labor hours or material costs, potentially leading to higher overall expenditures than anticipated.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $179,998,460

Exercised Options: $179,998,460

Current Obligation: $178,066,760

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline