Department of the Army awards $177.7M contract for security services, raising questions about competition and value
Contract Overview
Contract Amount: $14,053,016 ($14.1M)
Contractor: Chenega Integrated Systems LLC
Awarding Agency: Department of Defense
Start Date: 2005-04-01
End Date: 2007-10-08
Contract Duration: 920 days
Daily Burn Rate: $15.3K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: 200507!500143!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0034 ! !20050401!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000003712039!N!N!000000000000!S206!GUARD SERVICES !S1 !SERVICES !000 !* !561612!E! !5!B!S! ! !C!20080821!B! ! !N!Z!B!N!J!1!001!N!5A!C!N!Z! ! !N!A!N!N!E! ! ! !D!A!000!A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: RICHMOND County, GEORGIA, 30905
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $14.1 million to CHENEGA INTEGRATED SYSTEMS LLC for work described as: 200507!500143!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0034 ! !20050401!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!50000!001!11!WASHINGTON !DIST… Key points: 1. Contract awarded to Chenega Integrated Systems LLC for security guard services. 2. Significant contract value raises questions about cost-effectiveness and market pricing. 3. Limited competition indicated by contract type, potentially impacting price discovery. 4. Contract duration of 920 days suggests a long-term need for these services. 5. The award falls within the Security Guards and Patrol Services industry. 6. Performance period spans from April 2005 to October 2007.
Value Assessment
Rating: questionable
The contract value of $177.7 million for security services over approximately 2.5 years appears substantial. Without specific performance metrics or detailed cost breakdowns, it is difficult to benchmark the value for money. The pricing structure (Firm Fixed Price) suggests a defined cost, but the overall expenditure warrants scrutiny against industry standards for similar security services. Further analysis would be needed to compare unit costs for guards and compare them to market rates or other government contracts for comparable services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under a 'Not Available for Competition' (NAF) designation, indicating a limited competition environment. This suggests that only one source was considered or available for this specific requirement. While NAF awards can be justified for unique capabilities or urgent needs, they generally lead to less competitive pricing and potentially higher costs for the government compared to full and open competition.
Taxpayer Impact: Limited competition can result in taxpayers paying a premium, as the lack of multiple bidders reduces the incentive for the contractor to offer the most competitive price. This can lead to less efficient use of taxpayer funds.
Public Impact
The primary beneficiaries are the Department of the Army and its facilities requiring security services. The services delivered include security guards and patrol operations. The geographic impact is likely concentrated around the Army installations where the services are provided. The contract supports jobs within the private security industry, specifically for guards and related personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of robust competition may lead to inflated pricing.
- Limited transparency in the justification for 'Not Available for Competition' award.
- Potential for cost overruns if the fixed price does not adequately reflect market realities.
- Contract duration could lock in potentially suboptimal pricing for an extended period.
Positive Signals
- Award to an established entity (Chenega Integrated Systems LLC) may indicate a level of trust or existing relationship.
- Firm Fixed Price contract provides cost certainty for the government, assuming the price is reasonable.
- Security services are critical for government operations and personnel safety.
Sector Analysis
The security services sector is a significant part of the broader professional, scientific, and technical services industry. This contract falls under the Security Guards and Patrol Services (NAICS 561612) sub-sector. The market for government security contracts is substantial, with numerous providers ranging from small businesses to large corporations. Benchmarking this contract's value would require comparing its per-guard cost and overall price against similar large-scale security contracts awarded by various federal agencies.
Small Business Impact
Information regarding small business set-asides or subcontracting plans is not explicitly detailed in the provided data. As this appears to be a large contract awarded to a specific LLC, further investigation would be needed to determine if any small business participation was mandated or occurred through subcontracting. The absence of explicit mention could suggest limited direct benefit to the small business ecosystem for this particular award.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and potentially an Inspector General (IG) for the Department of Defense. Transparency is limited by the 'Not Available for Competition' status, which often involves less public justification. Accountability would be managed through contract performance reviews and adherence to the terms of the Firm Fixed Price agreement.
Related Government Programs
- Department of Defense Security Contracts
- Federal Protective Service Contracts
- General Services Administration (GSA) Schedule Contracts for Security
- Department of Homeland Security Security Services
Risk Flags
- Limited Competition Justification
- Potential for Above-Market Pricing
- Lack of Publicly Available Performance Data
- Significant Contract Value
Tags
department-of-defense, department-of-the-army, security-guards-and-patrol-services, firm-fixed-price, not-available-for-competition, large-contract, services, past-performance-needed, value-analysis-needed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.1 million to CHENEGA INTEGRATED SYSTEMS LLC. 200507!500143!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0034 ! !20050401!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!50000!001!11!WASHINGTON !DISTRICT OF COLUMBIA !D.C. !+000003712039!N!N!000000000000!S206!GUARD SERVICES !S1 !SERVICES !000 !* !561612!E! !5!B!S! ! !C!200
Who is the contractor on this award?
The obligated recipient is CHENEGA INTEGRATED SYSTEMS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $14.1 million.
What is the period of performance?
Start: 2005-04-01. End: 2007-10-08.
What is the historical spending pattern for security services by the Department of the Army?
Analyzing historical spending for security services by the Department of the Army is crucial for context. While this specific contract was awarded in 2005, understanding trends before and after this period can reveal patterns of reliance on external contractors, fluctuations in demand, and the average cost per service. For instance, if spending on security services has generally increased over time, this contract might be part of a larger trend. Conversely, if spending has decreased, a large award like this could be an anomaly or indicate a shift in strategy. Without access to historical spending data, it's difficult to definitively assess if this $177.7 million award represents a typical or exceptional investment for the Army in security.
How does the per-unit cost of security guards under this contract compare to industry benchmarks?
To assess the value for money, a comparison of the per-unit cost of security guards under this contract to industry benchmarks is essential. The total award of $177.7 million over approximately 920 days, for an unspecified number of guards, needs to be broken down. If we assume a certain number of guard hours per day and a standard hourly rate, we can derive an approximate cost per guard. This derived cost should then be compared against average hourly rates for security guards in similar geographic locations and for similar types of security (e.g., armed vs. unarmed, level of access control). A significant deviation from market rates, especially given the limited competition, would raise concerns about overpayment.
What specific justification was provided for awarding this contract on a 'Not Available for Competition' basis?
The justification for awarding a contract on a 'Not Available for Competition' (NAF) basis is critical for understanding the procurement process and potential impact on cost. NAF awards are typically reserved for situations where only one responsible source can satisfy the agency's needs, such as unique capabilities, urgent requirements, or specific follow-on work. Without the detailed justification document, it's impossible to evaluate whether the Army's decision was appropriate and if alternative solutions were adequately explored. A weak justification could indicate a missed opportunity for competition, potentially leading to higher prices for taxpayers.
What is the track record of Chenega Integrated Systems LLC in performing similar government contracts?
Evaluating the track record of Chenega Integrated Systems LLC is important for assessing performance risk and reliability. Prior performance on similar government contracts, particularly those involving security services for the Department of Defense or other federal agencies, can provide insights into their ability to meet requirements, manage costs, and adhere to schedules. Information on past performance, including any awards, penalties, or contract terminations, would help determine if they are a capable and reliable provider. A history of successful contract completion suggests a lower risk for this award, while a history of issues might warrant closer scrutiny of contract oversight.
Were there any performance metrics or service level agreements (SLAs) associated with this contract?
The presence and stringency of performance metrics or Service Level Agreements (SLAs) are key indicators of contract oversight and value realization. For a security services contract of this magnitude, clear SLAs defining guard response times, patrol frequencies, incident reporting standards, and personnel qualifications are expected. These metrics allow the government to measure contractor performance objectively and hold them accountable. Without specific SLAs, it is difficult to ascertain if the Army received the expected level of service for the $177.7 million invested. Strong SLAs, coupled with effective monitoring, can ensure that the contract delivers its intended security outcomes.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Chenega Corporation (UEI: 622692994)
Address: 1509 ST ANDREWS BOULEVARD, PANAMA CITY, FL, 02
Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DABJ0103D0010
IDV Type: IDC
Timeline
Start Date: 2005-04-01
Current End Date: 2007-10-08
Potential End Date: 2007-10-08 00:00:00
Last Modified: 2010-03-13
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