State Department awards $80.8M for Saudi Arabia guard services, raising questions on competition and value

Contract Overview

Contract Amount: $80,857,629 ($80.9M)

Contractor: Miscellaneous Foreign Awardees

Awarding Agency: Department of State

Start Date: 2020-04-01

End Date: 2025-09-30

Contract Duration: 2,008 days

Daily Burn Rate: $40.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: LOCAL GUARD SERVICES SAUDI ARABIA

Plain-Language Summary

Department of State obligated $80.9 million to MISCELLANEOUS FOREIGN AWARDEES for work described as: LOCAL GUARD SERVICES SAUDI ARABIA Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (over 5 years) suggests a long-term need for these services. 3. The use of Time and Materials pricing can lead to cost overruns if not closely managed. 4. Lack of competition raises concerns about whether the government is receiving the best possible value. 5. The specific need for security services in Saudi Arabia warrants a clear justification for sole-source award. 6. Performance context is limited due to the non-competitive nature of the award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its non-competitive nature and specific geographic location. The $80.8 million award over five years for security services in Saudi Arabia lacks readily available comparable contracts for direct comparison. Without a competitive bidding process, it is difficult to assess if the pricing is optimal or if alternative, more cost-effective solutions were considered. The Time and Materials (T&M) contract type, while flexible, can also present risks for cost control if not meticulously monitored.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically justified when only one vendor can provide the required services, often due to unique capabilities, urgent needs, or specific geographic requirements. The lack of competition means that the government did not benefit from the price reductions and service improvements that typically arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive pressure. Without multiple bids, there is less assurance that the negotiated price reflects the lowest possible cost for the required security.

Public Impact

The primary beneficiaries are the Department of State personnel and facilities in Saudi Arabia requiring security. Services delivered include security guard and patrol functions to ensure safety and protection. The geographic impact is specific to U.S. diplomatic and consular posts within Saudi Arabia. Workforce implications involve the employment of security personnel, likely a mix of local hires and potentially U.S. personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits oversight and potential for cost savings.
Time and Materials pricing structure increases risk of cost overruns.
Lack of transparency in vendor selection process.
Geographic specificity may limit viable alternative providers, but requires strong justification.
Long contract duration without competition raises concerns about sustained value.

Positive Signals

Addresses critical security needs for U.S. personnel abroad.
Contract duration provides stability for service provision.
Specific NAICS code (561612) indicates a focused service requirement.

Sector Analysis

The security services industry is a significant sector within the broader professional services market. This contract falls under the Security Guards and Patrol Services (NAICS 561612) category. The global security market is substantial, driven by geopolitical factors, terrorism concerns, and the need to protect assets and personnel. Government contracts for security services, especially in high-risk or remote locations, are common but often require rigorous justification for non-competitive awards due to the specialized nature and potential for high costs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The large dollar value and the nature of providing security services in a foreign country might make it less suitable for small business participation without specific subcontracting plans. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses within the scope of this award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officers and program managers. Given the foreign location, oversight may be more complex, relying on on-site representatives and robust reporting mechanisms. Accountability measures would be defined in the contract terms, including performance standards and remedies for non-compliance. Transparency is limited due to the sole-source nature of the award; however, contract details should be publicly available through federal procurement databases.

Related Government Programs

Department of State Security Services Contracts
Worldwide Protective Services
Embassy Security Contracts
Foreign Affairs Security Services

Risk Flags

Sole-source award lacks competitive justification.
Time and Materials pricing increases cost uncertainty.
Long contract duration without competition.
Foreign location may complicate oversight.
Limited public information on contractor's specific capabilities and past performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $80.9 million to MISCELLANEOUS FOREIGN AWARDEES. LOCAL GUARD SERVICES SAUDI ARABIA

Who is the contractor on this award?

The obligated recipient is MISCELLANEOUS FOREIGN AWARDEES.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $80.9 million.

What is the period of performance?

Start: 2020-04-01. End: 2025-09-30.

What is the specific justification for awarding this security contract on a sole-source basis to LOCAL GUARD SERVICES SAUDI ARABIA?

The justification for a sole-source award typically stems from circumstances where only one responsible source is available or capable of meeting the agency's needs. For security services in a foreign country like Saudi Arabia, this could be due to unique local knowledge, established infrastructure, specific security clearances, or the inability of other potential contractors to operate effectively in that environment. The Department of State would have documented this justification, likely citing factors such as national security requirements, the need for continuity of essential services, or the lack of adequate competition within the required timeframe and location. Without access to the specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), the precise reasons remain speculative but are expected to align with federal acquisition regulations allowing for non-competitive procurements under specific conditions.

How does the Time and Materials (T&M) pricing structure compare to other contract types for similar security services, and what are the associated risks?

Time and Materials (T&M) contracts are used when the extent or duration of the work cannot be predetermined, allowing the contractor to be paid for direct labor hours at specified fixed hourly rates and for the actual cost of materials. Compared to fixed-price contracts, T&M offers more flexibility but carries higher risk for the government regarding cost control. In security services, T&M can be advantageous if the number of guards or hours fluctuate significantly due to unpredictable security threats or operational needs. However, the primary risk is that costs can escalate beyond initial estimates if labor hours or material usage are not diligently managed and monitored by the government. This necessitates robust oversight, detailed record-keeping, and clear ceiling prices to mitigate potential cost overruns and ensure value for taxpayer money.

What is the historical spending pattern for security services in Saudi Arabia by the Department of State?

Analyzing historical spending patterns for security services in Saudi Arabia by the Department of State is crucial for contextualizing the current $80.8 million award. While specific historical data for this exact service in this location isn't provided, the Department of State consistently procures security services for its diplomatic missions worldwide. Spending in this category can fluctuate based on geopolitical conditions, threat assessments, and the number of personnel and facilities requiring protection. Contracts for such services often span multiple years and can represent significant investments. A review of past solicitations and awards for similar services at U.S. embassies and consulates in the region would reveal trends in contract values, durations, and competition levels, helping to determine if the current award is an outlier or part of a consistent spending trend.

What are the potential performance risks associated with a sole-source, long-term contract for security services in a foreign country?

Performance risks for a sole-source, long-term security contract in a foreign country are multifaceted. Firstly, the lack of competition can lead to complacency from the contractor, potentially resulting in diminished service quality over time as there is no immediate threat of losing the contract. Secondly, the contractor might lack the incentive to innovate or adopt more efficient security technologies if their pricing is based on T&M and lacks strong performance incentives. Thirdly, managing a long-term contract in a foreign environment presents logistical challenges, including oversight of personnel, adherence to local laws and customs, and ensuring consistent application of security protocols. Political instability or changes in the host country's security landscape can also impact the effectiveness and necessity of the contracted services, requiring adaptability that might be harder to enforce with a sole-source provider.

Are there any known issues or performance concerns with the contractor, LOCAL GUARD SERVICES SAUDI ARABIA, on previous contracts?

Information regarding the specific performance history or any known issues with the contractor 'LOCAL GUARD SERVICES SAUDI ARABIA' on previous contracts is not directly available within the provided data. Federal procurement systems often track contractor performance through mechanisms like the Contractor Performance Assessment Reporting System (CPARS). However, accessing detailed performance records typically requires specific authorization or access to those systems. For a sole-source award, especially one of this magnitude, it is expected that the Department of State would have conducted due diligence regarding the contractor's past performance, reliability, and capability to fulfill the requirements. Any significant past performance issues could have been a factor in the decision-making process, potentially influencing the terms of the contract or the justification for its award.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 19AQMM19R0184

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $88,967,720

Exercised Options: $80,857,629

Current Obligation: $80,857,629

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline