DoD's $33.8M security services contract with CDA INC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $33,789,456 ($33.8M)

Contractor: CDA Inc

Awarding Agency: Department of Defense

Start Date: 2003-10-08

End Date: 2009-05-31

Contract Duration: 2,062 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Place of Performance

Location: GRAHAM, RANDOLPH County, ALABAMA, 36263

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $33.8 million to CDA INC for work described as: Key points: 1. Contract value appears reasonable given the duration and scope of security services. 2. Competition was limited, suggesting potential for higher pricing than a fully open market. 3. Risk indicators are moderate, with performance history needing closer examination. 4. The contract's long duration (over 6 years) requires ongoing scrutiny for sustained value. 5. This contract falls within the broader professional services sector for government security. 6. Oversight mechanisms are crucial to ensure consistent service delivery and cost control.

Value Assessment

Rating: fair

The contract's total value of approximately $33.8 million over nearly six years suggests an average annual spend of around $5.7 million. Benchmarking this against similar large-scale security contracts for federal agencies indicates a potentially fair, though not exceptionally low, price point. The firm-fixed-price structure provides cost certainty, but the absence of detailed performance metrics or comparison data makes a definitive value assessment challenging. Without more granular data on the specific services rendered and their market rates, it's difficult to ascertain if taxpayers received optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded. This suggests a more restricted bidding process than a truly open competition. With only 5 bidders identified, the level of competition was moderate. This limited pool may have influenced pricing dynamics, potentially leading to less aggressive bids compared to a scenario with a larger number of interested and capable vendors.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the vendor pool is restricted, reducing the pressure to offer the most competitive pricing.

Public Impact

Provides essential security and patrol services to Department of the Army facilities. Ensures the safety and security of government personnel and assets. Supports local employment in Alabama through the contractor's workforce. Contributes to the operational readiness of military installations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to suboptimal pricing.
Long contract duration could mask inefficiencies or price creep over time.
Lack of detailed performance data makes ongoing value assessment difficult.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Contract supports critical security functions for the Department of Defense.
Awarded to a single contractor, potentially allowing for specialized service delivery.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on security and investigation services. The market for government security contracting is substantial, with numerous firms competing for federal contracts. This particular award represents a significant portion of spending within the security guard and patrol services sub-sector (NAICS 561612). Comparable spending benchmarks would involve analyzing other large-scale security contracts awarded by agencies like the DoD, GSA, or DHS.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The primary contractor, CDA INC, is likely a larger entity, and any subcontracting would be at their discretion, not mandated by a small business set-aside provision.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting officer's representative (COR) within the Department of the Army, responsible for monitoring performance and ensuring compliance. The Department of Defense also has an Inspector General (IG) office that can investigate waste, fraud, and abuse. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often not publicly available.

Related Government Programs

Department of Defense Security Contracts
Federal Protective Services
Government Security Guard Services
Professional and Technical Services

Risk Flags

Limited competition
Long contract duration
Lack of detailed performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.8 million to CDA INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CDA INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $33.8 million.

What is the period of performance?

Start: 2003-10-08. End: 2009-05-31.

What is the track record of CDA INC in performing similar government contracts?

Detailed information on CDA INC's specific track record for this contract is not fully available in the provided data. However, the contract's duration (2003-2009) suggests a history of performance. To assess their track record, one would need to examine past performance reviews, any documented disputes or contract terminations, and their success in securing and completing other federal contracts, particularly those involving security guard and patrol services. A review of their financial stability and capacity to handle large contracts would also be pertinent. Without access to these specific performance metrics, a comprehensive assessment of their reliability is limited.

How does the total contract value of $33.8 million compare to similar security contracts awarded by the Department of the Army?

The total contract value of $33.8 million over approximately 6 years equates to an average annual value of roughly $5.7 million. This figure needs to be contextualized by the scope and specific services provided (Security Guards and Patrol Services, NAICS 561612). Comparing this to other large-scale security contracts awarded by the Department of the Army or other federal agencies for similar services requires access to a broader dataset of contract awards. However, for a contract of this duration and covering potentially multiple locations or significant security requirements, this value appears within a plausible range for major federal security procurements. It is not exceptionally high or low without further service-specific benchmarking.

What are the primary risks associated with a firm-fixed-price contract of this magnitude and duration?

The primary risks associated with a firm-fixed-price (FFP) contract of this magnitude ($33.8M) and duration (over 6 years) include potential contractor underperformance if the price is too low, or contractor windfall if the price is too high and costs are significantly lower than anticipated. For the government, the risk is paying a premium if market conditions change unfavorably for the contractor, or if the contractor inflates costs to meet the fixed price. Given the long duration, there's also a risk that the fixed price may not adequately reflect evolving security needs or technological advancements, potentially leading to a need for costly modifications or a contract renegotiation. Contractor complacency or reduced service quality over time is another concern.

What does the competition level ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') imply for the effectiveness of the procurement process?

The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' implies that the agency intended to achieve broad competition but had specific reasons to exclude certain potential offerors. This could be due to pre-qualification requirements, specific technical capabilities, or other justifiable reasons. While it aims for openness, the exclusion of sources inherently limits the competitive pool compared to a truly unrestricted 'full and open' competition. The fact that there were 5 bidders suggests a moderate level of interest, but the exclusion clause means the government may not have benefited from the widest possible range of offers and pricing, potentially impacting the final price and value achieved.

How has spending on Security Guards and Patrol Services (NAICS 561612) by the Department of the Army trended historically?

Historical spending trends for Security Guards and Patrol Services (NAICS 561612) by the Department of the Army would require analyzing procurement data over multiple fiscal years. This specific contract (awarded in 2003) represents a snapshot from that period. To understand trends, one would need to aggregate spending on this NAICS code across various Army contracts over time. Factors influencing these trends could include changes in force protection requirements, base consolidation or closures, shifts in outsourcing policies, and overall defense budgets. Without a multi-year analysis, it's impossible to determine if spending on this service has increased, decreased, or remained stable.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 203 BEALE STREET, MEMPHIS, TN, 09

Business Categories: Black American Owned Business, Category Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,425,790

Exercised Options: $808,372

Current Obligation: $33,789,456

Contract Characteristics

Cost or Pricing Data: NO

Timeline