Department of Defense awards $177.6M contract for security services, raising questions about competition and value

Contract Overview

Contract Amount: $16,977,306 ($17.0M)

Contractor: Chenega Integrated Systems LLC

Awarding Agency: Department of Defense

Start Date: 2005-08-16

End Date: 2007-10-08

Contract Duration: 783 days

Daily Burn Rate: $21.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200512!500375!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0048 ! !20050816!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!65000!029!48!SAN ANTONIO !BEXAR !TEXAS !+000001904466!N!N!000000000000!S206!GUARD SERVICES !S1 !SERVICES !000 !* !561612!E! !5!B!S! ! ! !20200930!B! ! !N!Z!B!U!J!1!001!N!5A!C!N!Z! ! !N!A!N!N!E! ! ! !D!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to CHENEGA INTEGRATED SYSTEMS LLC for work described as: 200512!500375!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0048 ! !20050816!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!65000!029!48!SAN ANTONIO !BEXA… Key points: 1. Contract awarded to a single vendor, raising concerns about potential overpricing and limited innovation. 2. The contract's duration and value suggest a significant reliance on this specific service provider. 3. Lack of competitive bidding may indicate a lack of market research or a constrained acquisition environment. 4. Performance context is limited, making it difficult to assess the true value delivered for taxpayer funds. 5. The sector for security services is competitive, making the sole-source nature of this award notable. 6. Risk indicators are elevated due to the absence of a competitive process to ensure best value.

Value Assessment

Rating: questionable

The contract value of $177.6 million over its period of performance is substantial. Without a competitive bidding process, it is difficult to benchmark this against market rates or similar contracts. The absence of competition means there's less assurance that the pricing reflects the best possible value for the government. Further analysis would be needed to compare the specific services and deliverables against industry standards and pricing models to determine if the government received fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This suggests that either only one vendor was deemed capable of meeting the requirement, or the circumstances of the procurement did not allow for full and open competition. The lack of multiple bidders limits the government's ability to leverage market forces to drive down costs and ensure the most innovative solutions are considered.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no direct price competition. This limits the government's leverage in negotiating favorable terms and prices.

Public Impact

The primary beneficiaries are the personnel and operations of the Department of Defense requiring security services. The contract delivers essential security guard and patrol services, crucial for maintaining operational security. The geographic impact is likely concentrated around the facilities and installations where the services are rendered. Workforce implications include the direct employment of security personnel by the contractor, contributing to the private security industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced service quality over time.
Sole-source awards can create vendor lock-in, making future transitions more difficult and costly.
Limited transparency in the sole-source justification process could mask underlying issues.
Performance metrics and oversight are critical to mitigate risks associated with non-competitive awards.

Positive Signals

The award indicates a recognized need for these specific security services by the Department of Defense.
The contractor, Chenega Integrated Systems LLC, is likely experienced in providing such services.
The contract duration suggests a stable and ongoing requirement, potentially allowing for efficient service delivery.

Sector Analysis

The security services industry is a significant sector within the broader professional services market. It encompasses a wide range of activities from physical guarding to cybersecurity. Federal spending in this area is substantial, driven by the need to protect government assets, personnel, and facilities. This contract falls within the physical security sub-sector, where competition can be robust, making the sole-source nature of this award noteworthy. Benchmarks for similar security guard contracts vary widely based on location, scope, and required security clearances.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly detailed in the provided data. As this was a sole-source award, the typical mechanisms for promoting small business participation through competition may not have been applicable. Further investigation into the contractor's subcontracting practices would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) and potentially an Inspector General's office, depending on the nature of any reported issues. Accountability measures are usually tied to performance metrics outlined in the contract. Transparency is often limited in sole-source procurements, but contract award details are generally made public. The effectiveness of oversight depends heavily on the diligence of the government personnel responsible for contract administration.

Related Government Programs

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

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of detailed performance metrics in summary data hinders value assessment.
Potential for vendor lock-in due to non-competitive nature of the award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to CHENEGA INTEGRATED SYSTEMS LLC. 200512!500375!2100!W911S0!ACA, NRCC - GENERAL SUPPORT DIVI!DABJ0103D0010 !A!N! !Y!0048 ! !20050816!20051031!177674665!177674665!622692994!N!CHENEGA INTERGRATED SYSTEMS LL!1509 SAINT ANDREWS BLVD !PANAMA CITY !FL!32405!65000!029!48!SAN ANTONIO !BEXAR !TEXAS !+000001904466!N!N!000000000000!S206!GUARD SERVICES !S1 !SERVICES !000 !* !561612!E! !5!B!S! ! ! !202

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 $17.0 million.

What is the period of performance?

Start: 2005-08-16. End: 2007-10-08.

What specific justification was provided for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without access to the contract file or justification documents, it is impossible to determine the precise reason. This lack of transparency is a common concern with sole-source procurements, as it can obscure whether the government truly exhausted all options for competitive bidding.

How does the awarded amount of $177.6 million compare to historical spending on similar security services by the Department of Defense?

The provided data indicates a total award of $177,674,665. To compare this to historical spending, one would need to access historical contract databases (like FPDS or USASpending) for the Department of Defense for similar North American Industry Classification System (NAICS) codes, such as 561612 (Security Guards and Patrol Services). Analyzing contracts awarded over the past 5-10 years, filtering by agency and service type, would reveal spending trends. A high value compared to similar past contracts, especially without clear justification for increased scope or inflation, could indicate potential overpricing or a lack of competitive pressure.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data snippet does not contain details on the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These are critical components of any service contract, especially for security, as they define the expected standards of performance and the metrics by which the contractor's success is measured. Typically, KPIs for security guard services might include response times to incidents, adherence to post orders, personnel reliability, and incident reporting accuracy. SLAs would outline remedies or penalties for failing to meet these KPIs. The absence of this information in the summary data limits the ability to assess performance risks and value.

What is the track record of Chenega Integrated Systems LLC in performing similar federal contracts?

Chenega Integrated Systems LLC is part of the larger Chenega Corporation, a significant government contractor. To assess their track record, one would typically review their past performance on federal contracts, particularly those for security services. This involves examining contract databases for awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes, terminations, or corrective actions. A strong performance history with positive past performance reviews would mitigate some of the risks associated with a sole-source award, while a history of issues would raise significant concerns.

Are there any known risks or challenges associated with the specific security services required under this contract?

The nature of security guard and patrol services inherently involves risks related to personnel reliability, access control, incident response, and the protection of sensitive government assets. Specific challenges could include maintaining adequate staffing levels, ensuring proper training and vetting of guards, adapting to evolving security threats, and operating effectively in diverse environments (e.g., remote bases, high-traffic areas). The sole-source nature of this award means the government is relying on Chenega Integrated Systems LLC to proactively manage these risks without the pressure of competitive alternatives to drive continuous improvement.

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