DoD's $25.3M security services contract awarded to Olive Group North America, LLC, with 3 bidders

Contract Overview

Contract Amount: $25,295,528 ($25.3M)

Contractor: Olive Group North America, LLC

Awarding Agency: Department of Defense

Start Date: 2011-08-12

End Date: 2013-12-31

Contract Duration: 872 days

Daily Burn Rate: $29.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TAJI HAMMER SECURITY

Plain-Language Summary

Department of Defense obligated $25.3 million to OLIVE GROUP NORTH AMERICA, LLC for work described as: TAJI HAMMER SECURITY Key points: 1. The contract value represents a significant investment in security guard services for the Department of the Army. 2. Competition dynamics indicate a moderate level of market interest with three bidders. 3. The firm-fixed-price contract type suggests a clear understanding of scope and cost expectations. 4. Performance duration of 872 days provides a substantial period for service delivery and evaluation. 5. The NAICS code 561612 points to a specialized market for security guards and patrol services. 6. The absence of small business set-aside flags suggests the primary awardee is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed service descriptions. However, the total award amount of $25.3 million over approximately two years suggests a substantial per-diem or per-hour rate for security personnel. Comparing this to industry averages for similar security guard services, especially in defense contexts, would be necessary to fully assess value for money. The firm-fixed-price nature implies that the contractor bears cost overruns, which can be a positive indicator if managed effectively.

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 offers. With three bidders participating, the competition level was moderate. This suggests that while there was interest from multiple firms, the market may not be saturated with providers for this specific type of security service. The presence of multiple bidders generally supports price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A moderate level of competition, with three bidders, likely resulted in a more competitive price than a sole-source award. This offers a reasonable degree of assurance that taxpayer funds were used efficiently in securing these essential security services.

Public Impact

The Department of the Army benefits from enhanced security and protection of its assets and personnel. Services delivered include security guards and patrol services, crucial for maintaining order and safety. The geographic impact is likely concentrated around Army installations where the services are deployed. Workforce implications include the employment of security personnel, potentially both by the prime contractor and any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the effectiveness and efficiency of the security services provided.
The absence of small business set-aside information raises questions about opportunities for smaller businesses to participate in this significant contract.
Without detailed cost breakdowns, it's hard to definitively determine if the pricing is optimal compared to market rates for comparable services.

Positive Signals

Awarded under full and open competition, suggesting a fair and accessible process for potential bidders.
The firm-fixed-price contract type provides cost certainty for the government, transferring some risk to the contractor.
The contract duration of over two years allows for sustained service delivery and potential for relationship building with the provider.

Sector Analysis

The security services industry is a substantial sector within the broader professional services market. This contract falls under the security guards and patrol services category, which is a critical component of national security and facility protection. The Department of Defense is a major consumer of such services, often requiring specialized capabilities and high levels of reliability. Market size for government security contracts is significant, driven by the need to protect federal assets and personnel across various agencies.

Small Business Impact

The contract details indicate that this was not specifically set aside for small businesses, nor does it appear that the prime contractor, Olive Group North America, LLC, is a small business. This suggests that opportunities for small businesses would primarily be through subcontracting, if the prime contractor chooses to engage them. The extent of small business subcontracting is not detailed, which limits the assessment of its impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract structure, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance reports and cost justifications may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Security Contracts
Federal Protective Service Contracts
Private Security Services
Guard Services Contracts
Facility Security Contracts

Risk Flags

Potential for performance issues due to contractor staffing challenges.
Risk of inadequate security coverage if personnel turnover is high.
Uncertainty regarding the optimal value for money without detailed cost analysis.
Limited visibility into small business participation and subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.3 million to OLIVE GROUP NORTH AMERICA, LLC. TAJI HAMMER SECURITY

Who is the contractor on this award?

The obligated recipient is OLIVE GROUP NORTH AMERICA, 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 $25.3 million.

What is the period of performance?

Start: 2011-08-12. End: 2013-12-31.

What is the track record of Olive Group North America, LLC in performing similar government contracts?

Assessing the track record of Olive Group North America, LLC requires a review of their past performance on federal contracts, particularly those involving security guard and patrol services. Information on past performance evaluations, any contract disputes, or awards for exceptional performance would provide insight into their reliability and capability. Without specific data on their history with the Department of Defense or other agencies, it is difficult to definitively gauge their experience and success rate in fulfilling similar requirements. A thorough review would involve checking federal procurement databases and performance assessment systems for relevant data points.

How does the per-unit cost of security personnel under this contract compare to industry benchmarks?

Determining the per-unit cost requires breaking down the total contract value by the number of personnel and the duration of their service. For instance, if the $25.3 million contract supported 100 guards for 872 days, the daily cost per guard would be approximately $289. This figure needs to be compared against industry benchmarks for security guards, considering factors like location, required security clearances, and specific duties. Benchmarking against similar Department of Defense contracts for security services would provide a more relevant comparison. If this rate is significantly higher or lower than comparable contracts, it could indicate issues with pricing or exceptional value.

What are the primary risks associated with this security services contract?

Key risks include potential understaffing or high turnover of security personnel, which could compromise service quality and continuity. Performance failures, such as inadequate response to security incidents or breaches, represent a significant risk. There's also a risk of cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen operational challenges or wage increases. Furthermore, security clearances for personnel and compliance with evolving security regulations pose ongoing risks. The reliance on a single contractor for critical security functions also presents a risk if the contractor's performance deteriorates or they face financial instability.

How effective has the competition level been in driving down costs for this type of service?

With three bidders participating in this full and open competition, the level of competition was moderate. This suggests that while there was interest from multiple firms, the market might not be saturated with providers capable of meeting the specific requirements. Moderate competition generally leads to more competitive pricing than a sole-source award, but perhaps not as aggressive as a market with numerous highly competitive bidders. To fully assess the impact on cost, one would need to compare the awarded price against the estimated government cost or against prices from similar, competitively awarded contracts in the same region or for similar services.

What is the historical spending pattern for security guards and patrol services by the Department of the Army?

Historical spending by the Department of the Army on security guards and patrol services (NAICS 561612) is substantial, reflecting the vast number of installations and facilities requiring protection. Annual spending often runs into hundreds of millions, if not billions, of dollars across various contracts. This specific $25.3 million award represents a portion of that larger expenditure. Analyzing trends in this spending over several fiscal years can reveal patterns of increased or decreased reliance on contracted security, shifts in contract types, or changes in average contract values, providing context for the current award.

Are there any specific performance metrics or KPIs tied to this contract that indicate success?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) tied to this contract. Typically, government contracts include clauses that define measurable standards for service delivery, such as response times, incident reporting accuracy, personnel appearance and conduct, and adherence to post orders. The effectiveness of the security services would be evaluated against these metrics. Without access to the contract's statement of work and performance clauses, it is impossible to assess the success of the services rendered based on defined objectives.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Investigation and Security Services › Security Guards and Patrol Services

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2010 CORPORATE RIDGE STE 700, MCLEAN, VA, 22102

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,295,528

Exercised Options: $25,295,528

Current Obligation: $25,295,528

Contract Characteristics

Commercial Item: SERVICES PURSUANT TO FAR 12.102(G)

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W52P1J11D0043

IDV Type: IDC

Timeline