State Department awards $178M contract for security services, extending existing guard services

Contract Overview

Contract Amount: $178,172,058 ($178.2M)

Contractor: Inter-Con Security Systems, Inc.

Awarding Agency: Department of State

Start Date: 2017-06-14

End Date: 2018-12-14

Contract Duration: 548 days

Daily Burn Rate: $325.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF THE PURPOSE OF THIS SIX (6) MONTH BRIDGE CONTRACT IS TO PROVIDE ADDITIONAL TO MAKE AN AWARD FOR THE FOLLOW ON CONTRACT.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $178.2 million to INTER-CON SECURITY SYSTEMS, INC. for work described as: IGF::OT::IGF THE PURPOSE OF THIS SIX (6) MONTH BRIDGE CONTRACT IS TO PROVIDE ADDITIONAL TO MAKE AN AWARD FOR THE FOLLOW ON CONTRACT. Key points: 1. Contract value of $178M for a 548-day duration indicates significant investment in security. 2. The 'NOT COMPETED' status raises questions about potential cost savings and market exploration. 3. A bridge contract suggests a need for continuity while a follow-on contract is processed. 4. The firm-fixed-price structure aims to control costs, but competition is key to ensuring value. 5. Security Guards and Patrol Services (NAICS 561612) is a critical function for government facilities. 6. The contract's duration of over 1.5 years implies a substantial operational requirement.

Value Assessment

Rating: fair

The contract value of $178 million over 548 days averages approximately $325,000 per day. Without comparable contract data or a competitive bidding process, it is difficult to definitively assess value for money. The firm-fixed-price nature provides cost certainty for the government, but the lack of competition may have led to a higher price than could have been achieved through a more open process. Benchmarking against similar security contracts would be necessary for a more robust valuation.

Cost Per Unit: Approximately $325,131 per day (calculated as $178,172,057.69 / 548 days).

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED,' indicating it was awarded without a competitive bidding process. This typically occurs when there is a sole source provider or an urgent need that precludes competition. The lack of competition means that multiple vendors did not have the opportunity to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not explore offers from multiple vendors. This could result in paying a premium for the security services provided.

Public Impact

Provides essential security guard and patrol services to protect Department of State personnel and facilities. Ensures the safety and security of diplomatic missions and government assets. Supports the operational continuity of the Department of State's functions. Likely employs a significant number of security personnel, contributing to the workforce in the security sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for taxpayer funds.
Bridge contract status indicates potential planning or award delays for the follow-on contract.
Sole-source awards can limit innovation and the adoption of more cost-effective security solutions.
Absence of competitive benchmarking makes it difficult to verify fair pricing.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Ensures continuity of critical security services during the transition to a new contract.
The contract addresses a clear and essential government function (security).

Sector Analysis

The security services industry is a significant sector within the broader government contracting landscape. This contract falls under the Security Guards and Patrol Services category (NAICS 561612). The market for government security services is substantial, with numerous providers ranging from large corporations to smaller specialized firms. Government contracts often require extensive vetting and compliance, making established players with proven track records highly sought after. This specific award represents a notable portion of spending within this niche.

Small Business Impact

The contract details indicate that small business participation was not a stated requirement or focus ('sb': false, 'ss': false). As this was a sole-source award, there were no opportunities for small businesses to compete directly for the prime contract. Subcontracting opportunities for small businesses are not specified in the provided data, but are typically encouraged in larger federal contracts to meet small business utilization goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. The Inspector General's office for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is limited due to the sole-source nature of the award; however, contract award data is generally made public through federal procurement databases.

Related Government Programs

Department of State Security Contracts
Federal Protective Services
Department of Homeland Security Contracts
General Services Administration (GSA) Schedules

Risk Flags

Non-competitive award
Bridge contract
Lack of transparency in pricing
Potential for cost overruns due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $178.2 million to INTER-CON SECURITY SYSTEMS, INC.. IGF::OT::IGF THE PURPOSE OF THIS SIX (6) MONTH BRIDGE CONTRACT IS TO PROVIDE ADDITIONAL TO MAKE AN AWARD FOR THE FOLLOW ON CONTRACT.

Who is the contractor on this award?

The obligated recipient is INTER-CON SECURITY SYSTEMS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $178.2 million.

What is the period of performance?

Start: 2017-06-14. End: 2018-12-14.

What is the typical duration and value range for similar security guard contracts awarded by the Department of State or other federal agencies?

The duration of this contract is 548 days (approximately 1.5 years) with a value of $178 million. Typical federal contracts for security guard services can vary significantly in duration and value, often ranging from one to five years. Smaller contracts might be in the low millions, while large, comprehensive security packages for major agencies or overseas operations can easily reach tens or hundreds of millions of dollars. For instance, the General Services Administration (GSA) offers security services through its Federal Supply Schedules, with contract values varying widely based on the scope of services, geographic coverage, and security levels required. Without access to specific comparable contract data for the Department of State or similar agencies, it's challenging to benchmark this $178 million award precisely. However, its substantial value suggests it covers a broad scope of services, potentially including numerous posts, high-security areas, or extensive operational hours across multiple locations.

Why was this contract awarded as 'NOT COMPETED' instead of through a full and open competition?

The 'NOT COMPETED' designation indicates that the contract was awarded without soliciting bids from multiple potential offerors. Common justifications for non-competitive awards include: 1) Urgent and compelling need where delaying award would cause significant harm to the government. 2) Only one responsible source exists capable of providing the required services. 3) A specific national interest requires the award to be made on a sole-source basis. 4) The contract is a follow-on to a previously competed contract where only the original contractor can provide the necessary services due to unique capabilities or proprietary information. For this specific bridge contract, the stated purpose is to provide services while a follow-on contract is being procured. This suggests that either the original contract expired, or the follow-on procurement is taking longer than anticipated, necessitating a short-term extension to ensure service continuity. The underlying reason for the initial non-competition or the delay in the follow-on procurement would need further investigation.

What are the potential risks associated with awarding a large contract like this on a sole-source or non-competitive basis?

Awarding a contract on a sole-source or non-competitive basis carries several potential risks. Firstly, it can lead to higher costs for the government, as the absence of competition removes the downward pressure on pricing that multiple bids typically create. The contractor may not feel compelled to offer the most competitive rates. Secondly, it can limit innovation and the adoption of new technologies or more efficient service delivery methods, as the government is not exposed to a range of solutions from different providers. Thirdly, it can create a perception of favoritism or a lack of transparency, potentially undermining public trust. Lastly, it may hinder the development of a broader base of qualified contractors in the future, as smaller or newer companies may not get the opportunity to demonstrate their capabilities and build a track record with the agency.

How does the firm-fixed-price (FFP) contract type influence the risk and cost-effectiveness of this security services contract?

A Firm-Fixed-Price (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor assumes most of the risk for cost overruns. The price is set at the outset, and the contractor is obligated to perform the work for that price, regardless of their actual costs. This provides the government with cost certainty, making budgeting more predictable. For the contractor, it offers the potential for higher profit margins if they can perform the work efficiently and below the estimated cost. However, if the scope of work is not precisely defined or if unforeseen circumstances arise, the contractor might be incentivized to cut corners to maintain profitability, potentially impacting service quality. In a non-competitive scenario, the FFP price might be set higher than it would be in a competitive environment.

What is the historical spending pattern for security guard services by the Department of State, and how does this contract compare?

Analyzing historical spending patterns for security guard services by the Department of State is crucial for context. Federal agencies, particularly those with international operations like the State Department, consistently allocate significant budgets to security. This $178 million contract, awarded in 2017 and spanning 548 days, represents a substantial single award. To compare it effectively, one would need to examine previous awards for similar services, noting their values, durations, and whether they were competed. For example, if the State Department has historically awarded multiple smaller contracts or fewer, larger contracts for security, this award's size and duration would need to be viewed within that trend. A significant increase or decrease in spending compared to prior periods could indicate changes in security posture, geopolitical risks, or procurement strategies. Without access to the State Department's historical contract database, a precise comparison is not possible, but the $178 million figure suggests a major, long-term requirement.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 210 S DE LACEY AVE # 200, PASADENA, CA, 91105

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

Financial Breakdown

Contract Ceiling: $185,667,764

Exercised Options: $185,667,764

Current Obligation: $178,172,058

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline