State Department's $510M security contract with Triple Canopy Inc. awarded via full and open competition

Contract Overview

Contract Amount: $510,312,357 ($510.3M)

Contractor: Triple Canopy Inc

Awarding Agency: Department of State

Start Date: 2005-07-19

End Date: 2011-01-20

Contract Duration: 2,011 days

Daily Burn Rate: $253.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: LOCAL GUARD SERVICE

Plain-Language Summary

Department of State obligated $510.3 million to TRIPLE CANOPY INC for work described as: LOCAL GUARD SERVICE Key points: 1. Contract awarded through full and open competition, suggesting a potentially competitive pricing environment. 2. The contract type is Time and Materials, which can pose cost control risks if not managed diligently. 3. The duration of the contract (over 5 years) indicates a long-term need for these security services. 4. The North American Industry Classification System (NAICS) code 561612 points to a specialized security guard and patrol service. 5. The award to Triple Canopy Inc. represents a significant portion of federal spending in this specific service category. 6. The absence of small business set-aside indicates the primary award was not specifically targeted to small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this $510 million contract is challenging without detailed performance metrics and specific service locations. However, the Time and Materials (T&M) contract type, while flexible, can lead to higher costs compared to fixed-price contracts if not closely monitored for labor hours and material usage. Comparing it to similar large-scale security contracts awarded by the State Department or other agencies would provide a better understanding of its cost-effectiveness. The sheer scale suggests a critical need, but the T&M structure warrants careful oversight to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 6 bids suggests a reasonable level of competition for this significant security services contract. A competitive bidding process generally helps in achieving fair market prices and encourages contractors to offer their best value propositions. The number of bidders provides some assurance that the pricing was vetted against multiple market participants.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure services at the most advantageous price point. The multiple bids received suggest that the government was not locked into a single provider, potentially leading to cost savings compared to a sole-source award.

Public Impact

Provides essential security guard and patrol services, likely for U.S. diplomatic facilities and personnel abroad. Enhances the safety and security of government employees and assets in potentially high-risk environments. Supports the operational continuity of U.S. foreign policy and diplomatic missions. The contract's geographic impact is likely global, covering various overseas locations where U.S. embassies and consulates are situated. Creates employment opportunities for security personnel, potentially including local hires in host countries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not managed strictly.
Long contract duration may reduce flexibility to adapt to changing security needs or market innovations.
Potential for contractor performance issues in remote or challenging operational environments.
Dependence on a single large contractor for critical security functions.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Multiple bidders (6) suggest a healthy competitive landscape for these services.
Contract addresses a critical government function: protection of personnel and facilities.
Long-term award suggests stability and reliability in service provision.

Sector Analysis

The security 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' (NAICS 561612) subsector. Federal spending in this area is substantial, driven by the need to protect government assets, personnel, and facilities both domestically and internationally. Comparable spending benchmarks would involve analyzing other large-scale security contracts awarded by agencies like the Department of Defense, Department of Homeland Security, and other entities operating abroad, particularly those with significant overseas footprints.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. The primary award was made to Triple Canopy Inc., a large entity. While there's no explicit set-aside, large prime contractors are often required to subcontract a portion of the work to small businesses. The extent to which this contract facilitated subcontracting opportunities for small businesses would depend on the specific terms and oversight of the subcontracting plan, which is not detailed here. The impact on the small business ecosystem is therefore indirect, contingent on the prime contractor's adherence to subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Given the nature of the services and potential for operations in high-risk areas, robust performance monitoring, site inspections, and financial audits would be crucial. Transparency is typically managed through contract reporting mechanisms and public contract databases. Inspector General jurisdiction would apply to investigations of fraud, waste, and abuse related to the contract.

Related Government Programs

Department of State Security Contracts
Global Security Services
Private Security Contracting
Federal Law Enforcement Support Services
Department of Defense Security Contracts
Overseas Facility Security

Risk Flags

Time and Materials contract type carries inherent cost escalation risks.
Potential for performance issues in challenging overseas environments.
Long contract duration may limit adaptability.
Dependence on a single large contractor for critical security functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $510.3 million to TRIPLE CANOPY INC. LOCAL GUARD SERVICE

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 $510.3 million.

What is the period of performance?

Start: 2005-07-19. End: 2011-01-20.

What was the specific performance history of Triple Canopy Inc. on previous government contracts prior to this award?

Assessing Triple Canopy Inc.'s prior performance is crucial for understanding the risk associated with this $510 million contract. While the provided data doesn't detail past performance, a thorough analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for previous federal contracts. Key areas to examine would include on-time delivery, quality of service, cost control, management responsiveness, and adherence to contract terms. Positive past performance would indicate a lower risk of execution issues, while negative feedback might signal potential challenges in service delivery, cost management, or compliance, warranting closer scrutiny of this current contract's oversight.

How does the per-hour labor rate for security personnel under this contract compare to market rates for similar services in the contract's operational areas?

The provided data does not include specific per-hour labor rates, making a direct comparison impossible. However, for a Time and Materials contract of this magnitude, such a benchmark is critical for value assessment. A detailed analysis would involve researching prevailing wages and commercial rates for security guards with comparable qualifications and experience in the specific geographic regions where services are rendered. If the contract's rates significantly exceed market benchmarks, it could indicate potential overpricing or inefficiencies. Conversely, rates at or below market could suggest good value, assuming service quality is maintained. The State Department's contracting officers are responsible for ensuring these rates are fair and reasonable.

What are the primary risks associated with the Time and Materials (T&M) contract type for this large-scale security service?

The primary risk with a Time and Materials (T&M) contract, especially one valued at $510 million, is the potential for cost overruns and lack of cost certainty. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure can incentivize contractors to bill for more hours or use more expensive materials if not strictly managed. For the government, it necessitates robust oversight to verify the necessity and reasonableness of all billable hours and costs. Without diligent monitoring, the total cost can significantly exceed initial estimates, diminishing the overall value for taxpayers.

How has federal spending on security guard services (NAICS 561612) trended over the past decade, and where does this contract fit within that trend?

Federal spending on security guard services (NAICS 561612) has generally remained substantial over the past decade, driven by ongoing security needs for federal facilities, diplomatic missions, and sensitive government operations. While specific aggregate data isn't provided here, trends often reflect geopolitical events, changes in security postures, and agency budget allocations. This $510 million contract awarded in 2005 represents a significant single award within this category during its period of performance (2005-2011). Its size suggests it was a major component of the State Department's security budget and likely reflects a substantial portion of the total federal expenditure for this specific service during those years, potentially indicating a period of heightened security requirements or consolidation of services.

What mechanisms are in place to ensure accountability and performance quality for security services provided in potentially remote or high-risk overseas locations?

Accountability and performance quality for overseas security services are typically ensured through a multi-layered approach. This includes rigorous contractor vetting, detailed performance work statements (PWS) outlining specific requirements and metrics, and regular performance evaluations (e.g., CPARS). On-site government representatives or contracting officer's representatives (CORs) are often deployed to monitor operations directly. For high-risk areas, enhanced security protocols, communication plans, and incident reporting procedures are critical. Furthermore, contract clauses may include provisions for penalties for non-performance or incentives for exceptional service. The Inspector General's office also plays a role in investigating any reported deficiencies or misconduct.

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

Offers Received: 6

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

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

Address: 2250 CORPORATE PARK DRIVE, HERNDON, VA, 20171

Business Categories: Category Business, Not Designated a Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $524,524,634

Exercised Options: $524,524,634

Current Obligation: $510,312,357

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline