State Department's $87.7M security services contract awarded to DynCorp International LLC raises value and competition concerns

Contract Overview

Contract Amount: $87,703,864 ($87.7M)

Contractor: Dyncorp International LLC

Awarding Agency: Department of State

Start Date: 2005-09-07

End Date: 2010-02-28

Contract Duration: 1,635 days

Daily Burn Rate: $53.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SECURITY SECTOR REFORM SERVICES

Plain-Language Summary

Department of State obligated $87.7 million to DYNCORP INTERNATIONAL LLC for work described as: SECURITY SECTOR REFORM SERVICES Key points: 1. The contract's value, while substantial, requires careful benchmarking against similar security services to ensure optimal taxpayer return. 2. The sole-source award limits price discovery and potentially increases costs compared to a competitively bid scenario. 3. The duration of the contract and its delivery order nature suggest a need for ongoing performance monitoring. 4. The absence of a competitive process is a key risk indicator for potential overpricing or suboptimal service delivery. 5. This contract falls within the broader security and protective services sector, which sees significant federal investment. 6. The reliance on a single contractor for an extended period warrants scrutiny of performance metrics and potential vendor lock-in.

Value Assessment

Rating: questionable

Benchmarking the $87.7 million total award for security services is challenging without detailed performance data and comparable contract specifics. However, the lack of competition inherently raises questions about whether the pricing reflects true market value. Federal contracts for security guards and patrol services (NAICS 561612) can vary widely in cost based on location, threat level, and required personnel. Without a competitive bidding process, it's difficult to ascertain if DynCorp International LLC's pricing was the most advantageous available to the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, or in specific emergency situations. The lack of competition means that potential cost savings that could arise from a bidding process were not realized. It also limits the government's ability to explore innovative solutions or leverage a wider pool of qualified contractors.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as they bypass the price discovery mechanisms inherent in competitive bidding. This means the government may be paying more than it would if multiple companies had vied for the contract.

Public Impact

The primary beneficiaries are the Department of State personnel and facilities requiring security services, ensuring operational continuity and safety. The contract delivers essential security guard and patrol services, likely in high-risk or sensitive environments. Geographic impact is likely concentrated in areas where the Department of State operates, potentially including overseas diplomatic missions. Workforce implications include the direct employment of security personnel by DynCorp International LLC, contributing to the private security industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Lack of transparency in the procurement process due to non-competitive nature.
Extended contract duration without clear performance benchmarks could mask inefficiencies.
Potential for vendor lock-in, making future transitions difficult or costly.

Positive Signals

DynCorp International LLC is an established provider of government contracting services.
The contract addresses critical security needs for a government agency.
Delivery orders allow for flexibility in adapting services to evolving requirements.

Sector Analysis

The federal spending on security services, including guard and patrol operations (NAICS 561612), represents a significant portion of the government's procurement budget. This sector is characterized by numerous private sector providers, ranging from small businesses to large multinational corporations. Federal contracts in this space often involve complex requirements related to personnel vetting, operational security, and compliance with various regulations. The total federal spending in this category can reach billions annually, reflecting the ongoing demand for security solutions across different agencies and missions.

Small Business Impact

The contract was not competed and there is no indication of small business set-asides or subcontracting requirements. This sole-source award means that opportunities for small businesses to participate in providing these security services were bypassed. Without specific subcontracting plans mandated, the direct impact on the small business ecosystem for this particular contract is likely minimal, as the primary award went to a large, established contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Department of State Security Services
Federal Protective Services
Department of Defense Security Contracts
Global Security Services
Private Security Contracting

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $87.7 million to DYNCORP INTERNATIONAL LLC. SECURITY SECTOR REFORM SERVICES

Who is the contractor on this award?

The obligated recipient is DYNCORP INTERNATIONAL LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $87.7 million.

What is the period of performance?

Start: 2005-09-07. End: 2010-02-28.

What is DynCorp International LLC's track record with the Department of State and other federal agencies for similar security services?

DynCorp International LLC has a long history of providing a wide range of services to the U.S. government, including aviation, logistics, and security solutions. They have held numerous contracts with the Department of State, Department of Defense, and other agencies, often in complex and challenging environments globally. Their experience includes providing security personnel, training, and support services. While their extensive experience suggests capability, the scale and nature of past contracts, including any performance issues or disputes, would be crucial for a comprehensive assessment of their track record on this specific $87.7 million contract.

How does the pricing of this contract compare to similar security services procured competitively by the government?

Direct comparison of pricing is difficult without access to detailed service level agreements and performance metrics for this sole-source contract. However, federal procurement data indicates that competitively bid contracts for security guard and patrol services (NAICS 561612) often result in lower per-unit costs due to market competition. The absence of competition for this $87.7 million award suggests that the government may not have achieved the most favorable pricing. Benchmarking against contracts with similar scope, duration, and geographic location, especially those awarded competitively, would be necessary to identify potential price discrepancies.

What are the primary risks associated with a sole-source award for security services of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($87.7 million) include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or optimize service delivery, and a lack of transparency in the procurement process. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future. Furthermore, without a competitive process to vet multiple vendors, there's a heightened risk that the selected contractor might not be the absolute best fit or offer the most cost-effective solution available in the market.

What specific security services are being delivered under this contract, and how is their effectiveness measured?

This contract, NAICS 561612, primarily covers security guard and patrol services. The specific deliverables likely include providing trained security personnel for physical security, access control, surveillance, and response to incidents at Department of State facilities or operations. Effectiveness is typically measured through performance metrics outlined in the contract's statement of work, such as response times, incident reporting accuracy, adherence to post orders, and client satisfaction surveys. However, the details of these metrics and the actual performance data are not publicly available for this sole-source award.

What has been the historical spending trend for security services by the Department of State, and how does this contract fit within that trend?

The Department of State consistently allocates significant funds towards security services due to the nature of its global operations and the inherent risks involved. Historical spending data would likely show a substantial and potentially increasing trend in security-related procurements over the years, driven by geopolitical factors and the need to protect personnel and facilities worldwide. This $87.7 million contract, awarded over a period of approximately 4.5 years (September 2005 to February 2010), represents a considerable investment within that trend. Its sole-source nature might indicate specific, long-standing security requirements or a perceived lack of alternatives at the time of award.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Contractor Details

Parent Company: Cerberus Capital Management, L.P. (UEI: 014784388)

Address: 6500 WEST FWY STE 500, FORT WORTH, TX, 76116

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $545,688,499

Exercised Options: $87,992,188

Current Obligation: $87,703,864

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: SLMAQM03C0034

IDV Type: IDC

Timeline