State Department paid over $51.7M for Iraq security services, a contract awarded without competition

Contract Overview

Contract Amount: $51,718,300 ($51.7M)

Contractor: Triple Canopy Inc

Awarding Agency: Department of State

Start Date: 2011-05-11

End Date: 2011-07-20

Contract Duration: 70 days

Daily Burn Rate: $738.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: LOCAL GUARD SERVICES - IRAQ

Plain-Language Summary

Department of State obligated $51.7 million to TRIPLE CANOPY INC for work described as: LOCAL GUARD SERVICES - IRAQ Key points: 1. The contract's value of over $51.7 million for a short duration suggests a high per-day cost. 2. Awarded as a 'NOT COMPETED' contract, it bypasses the typical competitive bidding process, potentially impacting price discovery. 3. The 'TIME AND MATERIALS' contract type carries inherent risk of cost overruns if not closely managed. 4. The short performance period (70 days) indicates an urgent or immediate need for services. 5. The North American Industry Classification System (NAICS) code 561612 points to specialized security guard and patrol services. 6. The contractor, TRIPLE CANOPY INC, has experience in this sector, but the lack of competition limits benchmarking. 7. The absence of small business set-aside flags suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: questionable

The contract value of $51.7 million over approximately two months is exceptionally high, averaging over $738,000 per day. Without comparable contracts awarded through full and open competition, it is difficult to definitively benchmark value. However, the lack of competition and the time-and-materials pricing structure raise concerns about whether the government achieved the best possible price for these critical security services in a high-risk environment.

Cost Per Unit: $738,833 per day (estimated)

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' designation, meaning it did not undergo a full and open competitive bidding process. The specific justification for this sole-source award is not provided in the data. A lack of competition can limit the government's ability to secure the most favorable pricing and innovative solutions, as potential bidders are not incentivized to offer their best terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially funding higher costs than if multiple bids had been solicited and evaluated.

Public Impact

Provides essential security services to protect U.S. personnel and interests in Iraq. Ensures the continuity of operations for the Department of State in a high-threat environment. Supports the physical security of diplomatic facilities and personnel. Contributes to the stability and safety of U.S. government activities abroad.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Time and materials contract type poses a risk of cost overruns.
Short contract duration could indicate rushed execution or planning issues.
High daily cost raises questions about efficiency and value for money.

Positive Signals

Addresses a critical security need in a challenging operational environment.
Contractor has experience in providing security services.
Awarded to meet an immediate operational requirement.

Sector Analysis

The security services sector is a significant part of the federal contracting landscape, particularly for agencies operating in high-risk or overseas environments. This contract falls under the Security Guards and Patrol Services (NAICS 561612) industry. While specific market size data for private security in Iraq is not readily available, global spending on private military and security companies is substantial. This contract represents a portion of the Department of State's spending on essential security functions to support its diplomatic mission.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). The 'NOT COMPETED' award type further suggests that opportunities for small businesses to participate, either as prime contractors or through subcontracting, were likely limited or non-existent. This contract was awarded to a single entity without a specific focus on engaging the small business industrial base.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of State's contracting officers and potentially its Office of Inspector General (OIG). Given the 'NOT COMPETED' nature and the high value, rigorous oversight would be crucial to manage costs, ensure performance, and prevent fraud or abuse. Transparency is limited by the lack of competitive bidding documentation.

Related Government Programs

Department of State Security Contracts
Overseas Security Services
Iraq Reconstruction and Security Contracts
Private Security Company Contracts

Risk Flags

Lack of Competition
High Per-Day Cost
Time and Materials Contract Type
Potential for Cost Overruns
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $51.7 million to TRIPLE CANOPY INC. LOCAL GUARD SERVICES - IRAQ

Who is the contractor on this award?

The obligated recipient is TRIPLE CANOPY INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $51.7 million.

What is the period of performance?

Start: 2011-05-11. End: 2011-07-20.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. However, the specific justification for this determination is not included. Typically, sole-source awards are justified under circumstances such as urgent and compelling needs where only one responsible source can provide the required services, or when a specific capability is uniquely held by a single contractor. Without further documentation from the Department of State, the precise rationale remains unknown. This lack of transparency is a concern, as competitive bidding is generally preferred to ensure fair pricing and maximize value for taxpayer dollars.

How does the per-day cost of this contract compare to similar security contracts in high-risk environments?

The contract's estimated daily cost of approximately $738,833 is exceptionally high. Benchmarking this against similar contracts is challenging without access to detailed cost data from comparable sole-source or competitively awarded security contracts in environments like Iraq. However, such a high daily rate suggests significant operational complexities, security risks, and potentially extensive personnel and equipment costs. The 'TIME AND MATERIALS' pricing structure, combined with the lack of competition, makes it difficult to ascertain if this rate represents fair market value or if it includes a premium due to the circumstances of the award.

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

Time and Materials (T&M) contracts, like the one awarded here, carry inherent risks, primarily related to cost control. In a T&M arrangement, the government pays the contractor for the actual labor hours at specified hourly rates and for the actual cost of materials used, plus a fee or profit. The primary risk is that costs can escalate significantly if the work takes longer than anticipated or if material costs increase. Without strong oversight, defined ceilings, and clear performance metrics, T&M contracts can lead to cost overruns and may not incentivize the contractor to work as efficiently as possible, especially in a high-risk, complex environment like Iraq.

What was the track record of TRIPLE CANOPY INC in providing security services in Iraq prior to this contract?

While the provided data confirms TRIPLE CANOPY INC as the contractor, it does not detail their specific track record or performance history in Iraq leading up to this contract. TRIPLE CANOPY INC is known to have operated in complex environments, often providing security services. However, without specific performance reviews, past performance evaluations, or details on previous contracts with the Department of State or other agencies in Iraq, it's difficult to assess their specific suitability or past effectiveness in detail. The 'NOT COMPETED' nature of this award implies that either their unique capabilities were deemed essential, or prior positive performance was a significant factor, though this is not explicitly stated.

What historical spending patterns exist for similar security services by the Department of State in Iraq?

The provided data focuses on a single contract and does not offer historical spending patterns. However, it is generally understood that the Department of State has historically allocated significant resources to security services in Iraq due to the persistent security challenges. This often includes contracts for guarding facilities, providing close protection for personnel, and logistical security. Analyzing broader historical spending would require access to multi-year contract databases and budget allocations for the Bureau of Diplomatic Security or relevant posts. This specific $51.7 million contract, awarded in 2011 for a short duration, represents a substantial but isolated expenditure within that broader context.

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

Parent Company: Constellis Holdings, LLC (UEI: 966133477)

Address: 12018 SUNRISE VALLEY DR STE 140, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,642,885

Exercised Options: $62,642,885

Current Obligation: $51,718,300

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline