State Dept. Awards $557.6M for Overseas Security Installation Services to Xator LLC

Contract Overview

Contract Amount: $557,615,002 ($557.6M)

Contractor: Xator LLC

Awarding Agency: Department of State

Start Date: 2019-12-03

End Date: 2027-01-05

Contract Duration: 2,590 days

Daily Burn Rate: $215.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OVERSEAS SECURITY INSTALLATION SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $557.6 million to XATOR LLC for work described as: OVERSEAS SECURITY INSTALLATION SERVICES Key points: 1. Significant contract value of over $557 million for critical security infrastructure. 2. Xator LLC, the sole awardee, highlights potential for limited competition. 3. Risk of overpayment exists with Cost Plus Fixed Fee contract type. 4. The Electrical Contractors and Other Wiring Installation Contractors sector is broad, making direct benchmarks challenging.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed carefully, as contractor incentives may not align perfectly with cost savings. Without detailed cost breakdowns, it's difficult to assess if the fixed fee is appropriate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Although the contract was awarded under full and open competition, the specific awardee (Xator LLC) and the nature of the services (overseas security installation) might imply specialized capabilities that limit the pool of potential bidders in practice.

Taxpayer Impact: The large contract value means taxpayer funds are significantly allocated. The CPFF structure necessitates robust oversight to ensure cost efficiency and prevent unnecessary expenditures.

Public Impact

Ensures security at U.S. diplomatic facilities abroad, a critical national interest. Potential for cost overruns could impact the overall budget allocated for diplomatic security. The long duration of the contract (until 2027) means sustained taxpayer investment. Job creation for skilled labor in electrical contracting and security installation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Long contract duration
Sole awardee for specialized services

Positive Signals

Full and open competition initially
Critical national security function
Experienced contractor likely involved

Sector Analysis

This contract falls within the Electrical Contractors and Other Wiring Installation Contractors sector, which is broad. Spending benchmarks for specialized overseas security installations are not readily available, but the scale suggests a significant investment in critical infrastructure.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. Given the specialized nature and large value, it's possible that small businesses were either subcontractors or not primary bidders.

Oversight & Accountability

The Cost Plus Fixed Fee structure requires diligent oversight from the Department of State to monitor costs, ensure performance, and validate the fixed fee. Regular audits and performance reviews are crucial for accountability.

Related Government Programs

Electrical Contractors and Other Wiring Installation Contractors
Department of State Contracting
Department of State Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Limited visibility into fixed fee justification
Complexity of overseas operations introduces inherent risks
Lack of specific small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $557.6 million to XATOR LLC. OVERSEAS SECURITY INSTALLATION SERVICES

Who is the contractor on this award?

The obligated recipient is XATOR LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $557.6 million.

What is the period of performance?

Start: 2019-12-03. End: 2027-01-05.

What is the breakdown of the fixed fee relative to the estimated costs, and how was this fee determined to be fair and reasonable?

The contract type is Cost Plus Fixed Fee (CPFF), meaning the contractor is reimbursed for allowable costs plus a fixed fee. The determination of the fixed fee's reasonableness is critical. It should be based on factors like complexity, risk, and profit margin. Without this breakdown, it's hard to assess if taxpayers are getting good value or if the fee is excessive for the services rendered.

What specific risks are associated with performing security installations in overseas environments, and how are these risks mitigated by the contract terms?

Overseas security installations face risks such as geopolitical instability, logistical challenges, varying local regulations, and potential security threats to personnel. The contract should clearly define responsibilities for risk mitigation, insurance, and contingency planning. The CPFF structure might incentivize cost-reimbursement for unforeseen issues, necessitating clear definitions of what constitutes an allowable cost.

How does the performance of Xator LLC on similar contracts inform the assessment of this award's effectiveness and value?

Assessing the effectiveness and value requires examining Xator LLC's past performance on comparable contracts. Positive performance indicators would include on-time delivery, adherence to budget (within the CPFF structure), quality of work, and successful security outcomes. Negative indicators could include cost overruns, delays, or security breaches. A review of past performance reports and client feedback is essential.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 19AQMM19R0182

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Parsons Corporation

Address: 1835 ALEXANDER BELL DR STE 210, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $1,015,530,561

Exercised Options: $660,061,340

Current Obligation: $557,615,002

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline