DOJ's $191M Security Guard Contract Awarded to Paragon Systems Inc. Faces Scrutiny for Value and Competition

Contract Overview

Contract Amount: $190,957,645 ($191.0M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Justice

Start Date: 2019-09-29

End Date: 2026-06-30

Contract Duration: 2,466 days

Daily Burn Rate: $77.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DOJ SECURITY GUARD SERVICES

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $191.0 million to PARAGON SYSTEMS INC for work described as: DOJ SECURITY GUARD SERVICES Key points: 1. The contract's significant value raises questions about cost-effectiveness and potential for better pricing through enhanced competition. 2. Limited publicly available data on performance metrics makes a comprehensive value-for-money assessment challenging. 3. The contract's duration and scope suggest a substantial reliance on the incumbent, potentially limiting market dynamism. 4. While awarded under full and open competition, the number of bidders (2) warrants further investigation into market saturation and bid responsiveness. 5. The firm-fixed-price structure offers some cost certainty but may not fully incentivize efficiency if not rigorously monitored. 6. Geographic concentration in Virginia for a national security service contract could indicate specific operational needs or potential for broader reach.

Value Assessment

Rating: fair

Benchmarking the value of this $191 million contract for security guard services is difficult without detailed performance data and comparable contract specifics. However, the relatively low number of bids received (2) in a full and open competition might suggest that the pricing, while fixed, may not reflect the most competitive market rates achievable with broader participation. Further analysis of the specific services rendered and the prevailing market rates for similar security services in the specified regions would be necessary for a more definitive value assessment.

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 bids. However, only two bids were received. This limited number of bidders could suggest several possibilities: the market for such services may be concentrated among a few large providers, the solicitation requirements might have been highly specific, or the contract's terms and duration may have deterred broader participation. The low bid count raises concerns about the extent of price discovery achieved.

Taxpayer Impact: A limited number of bidders in a large contract can mean taxpayers may not be benefiting from the most competitive pricing possible. It suggests that the government might not have received the full spectrum of market offers, potentially leading to higher costs than if more companies had competed.

Public Impact

The Department of Justice (DOJ) and its various components benefit from enhanced physical security and protection of federal facilities and personnel. The contract ensures the provision of essential security guard services across multiple DOJ locations. The primary geographic impact is within Virginia, where the contract is managed, but the services likely extend to various DOJ facilities nationwide. The contract supports jobs within the security services industry, primarily for guards and supervisory personnel employed by Paragon Systems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in suboptimal pricing for taxpayers.
Lack of detailed performance metrics hinders a robust assessment of value for money.
The long contract duration (over 6 years) could reduce flexibility and opportunities for market innovation.
Potential for over-reliance on a single provider without clear performance benchmarks.

Positive Signals

Awarded through full and open competition, adhering to procurement regulations.
Firm-fixed-price contract type provides cost certainty for the government.
The contractor, Paragon Systems Inc., has experience in providing security services.
The contract duration allows for stable security operations and reduces frequent re-competition costs.

Sector Analysis

The security guard services sector is a significant component of the broader private security industry, which provides essential protective services to government agencies, businesses, and individuals. This contract falls within the NAICS code 561612 (Security Guards and Patrol Services). The market is characterized by a mix of large national providers and smaller regional firms. Government contracts often represent a substantial portion of revenue for major security companies, and competition can be fierce, especially for large, long-term agreements. Benchmarking against similar federal contracts for security services would reveal if the pricing structure and per-unit costs are in line with industry standards and government expectations.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a single large contractor like Paragon Systems Inc. suggests that the primary focus was on securing a comprehensive security solution, potentially overlooking opportunities to engage smaller, specialized security firms. This could limit the direct economic benefit to the small business ecosystem within the security services sector for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Justice's contracting officers and program managers responsible for security services. The contract's firm-fixed-price nature implies that the government is paying a set amount for the services, with oversight focused on ensuring service delivery meets the contract's specifications and performance standards. Transparency is generally facilitated through contract award databases like FPDS, but detailed operational oversight and accountability measures are internal to the agency. The Inspector General's office within the DOJ would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Services
General Services Administration (GSA) Schedule Contracts for Security
Department of Defense Security Guard Services

Risk Flags

Limited competition
Potential for cost overruns if market rates increase significantly
Lack of detailed performance metrics in public data
Long contract duration may reduce flexibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $191.0 million to PARAGON SYSTEMS INC. DOJ SECURITY GUARD SERVICES

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $191.0 million.

What is the period of performance?

Start: 2019-09-29. End: 2026-06-30.

What is the historical spending pattern for security guard services at the Department of Justice?

Historical spending on security guard services by the Department of Justice (DOJ) has been substantial, reflecting the agency's critical mission and the need to protect numerous facilities and personnel nationwide. While specific aggregate figures for the DOJ fluctuate annually based on evolving security needs and budget allocations, contracts for these services are consistently awarded across various components. The DOJ utilizes a range of contracting vehicles, including full and open competition, sole-source awards, and task orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts. The $191 million awarded to Paragon Systems Inc. represents a significant investment within this category, suggesting a sustained need for robust security personnel. Analyzing past spending trends would involve examining contract awards over several fiscal years, identifying key service providers, and understanding the average contract values and durations to contextualize the current award.

How does the per-unit cost of security guards under this contract compare to similar federal contracts?

A direct comparison of per-unit costs for security guards under this DOJ contract (awarded to Paragon Systems Inc. for $191 million) to similar federal contracts is challenging without access to detailed breakdowns of labor hours, guard levels (e.g., armed vs. unarmed, supervisory vs. entry-level), and specific geographic wage differentials. Federal contracts for security services often vary significantly based on location, security clearance requirements, the level of threat, and the specific duties performed. While the firm-fixed-price nature provides cost certainty, it doesn't inherently guarantee the most competitive per-unit rate. To perform a robust benchmark, one would need to analyze contracts with similar scope, duration, and geographic coverage, ideally from agencies like DHS or GSA, and compare the effective hourly rates paid to guards, factoring in overhead and profit margins.

What are the key performance indicators (KPIs) used to evaluate Paragon Systems Inc.'s performance on this contract?

The specific Key Performance Indicators (KPIs) used to evaluate Paragon Systems Inc.'s performance on this Department of Justice security guard services contract are not publicly detailed in the provided award data. Typically, for such contracts, KPIs would focus on metrics like response times to incidents, adherence to post orders, guard attendance and punctuality, successful completion of required training, incident reporting accuracy and timeliness, and overall client satisfaction surveys conducted by the DOJ. The firm-fixed-price nature of the contract implies that the government expects a defined level of service, and performance evaluations would center on whether these services are delivered consistently and effectively according to the contract's statement of work. Robust oversight would involve regular performance reviews and potentially performance-based incentives or penalties, though these are not specified in the award notice.

What is Paragon Systems Inc.'s track record with federal government contracts, particularly for security services?

Paragon Systems Inc. has a significant track record of performing security guard services for various U.S. federal government agencies. They have been awarded numerous contracts across departments such as the Department of Defense, Department of Homeland Security, and others, often involving large dollar values and long durations, similar to the DOJ contract. Their experience typically includes providing armed and unarmed security personnel, access control, screening, and physical security assessments. While their history indicates substantial experience and capacity to handle large federal contracts, a comprehensive assessment of their track record would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and their overall success rate in winning and executing similar government security contracts.

What are the potential risks associated with a long-duration contract (over 6 years) for security guard services?

Long-duration contracts, such as this DOJ security guard services contract with an estimated duration of over six years (2466 days), present several potential risks. Firstly, there's the risk of vendor complacency or a decline in service quality over time if performance is not rigorously monitored, as the contractor may feel secure due to the extended commitment. Secondly, market conditions, technology, and security threats evolve rapidly; a long-term contract might lock the government into outdated methods or pricing structures, reducing flexibility to adapt to new requirements or adopt more cost-effective solutions. Thirdly, significant cost increases could occur if inflation or wage requirements rise substantially over the contract period, potentially eroding the value of the fixed-price agreement if not adequately accounted for. Finally, it limits opportunities for other capable vendors to compete for the business during the contract's term.

Given the contract's value, what is the potential impact on small businesses in the security services sector?

The potential impact on small businesses (SMBs) from this specific $191 million DOJ security guard services contract awarded to Paragon Systems Inc. appears limited, as the contract was not set aside for small businesses and the data does not indicate specific small business subcontracting goals. Large, comprehensive contracts like this are often awarded to larger, established companies capable of managing extensive operations and personnel nationwide. While Paragon Systems Inc. might engage small businesses as subcontractors, this is not explicitly stated as a requirement or a focus of the award. Consequently, the direct economic benefit flowing to the SMB segment of the security services industry from this particular contract may be minimal, potentially concentrating the revenue stream among larger players.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Securitas AB

Address: 13900 LINCOLN PARK DR STE 300, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $198,490,247

Exercised Options: $198,490,247

Current Obligation: $190,957,645

Actual Outlays: $174,798,723

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS07F0418K

IDV Type: FSS

Timeline