Department of State awards $9.2M contract for embassy security guards in Lima, Peru

Contract Overview

Contract Amount: $9,200,595 ($9.2M)

Contractor: G4S Peru S.A.C.

Awarding Agency: Department of State

Start Date: 2023-10-01

End Date: 2026-06-20

Contract Duration: 993 days

Daily Burn Rate: $9.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: LOCAL GUARD PROGRAM FOR EMBASSY - LIMA, PERU

Plain-Language Summary

Department of State obligated $9.2 million to G4S PERU S.A.C. for work described as: LOCAL GUARD PROGRAM FOR EMBASSY - LIMA, PERU Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract, indicating a firm commitment for services. 3. Services are for security guards and patrol, a critical function for embassy operations. 4. The contract duration is 993 days, spanning over two and a half years. 5. The contractor, G4S PERU S.A.C., is a known entity in the security services sector. 6. The contract is a Time and Materials type, which can pose cost control challenges.

Value Assessment

Rating: fair

The contract value of $9.2 million for security guard services over approximately 2.7 years appears within a reasonable range for embassy security operations in a major capital city. However, without specific benchmarks for security personnel costs in Lima, Peru, a precise value-for-money assessment is difficult. The Time and Materials (T&M) pricing structure introduces inherent risk for cost overruns compared to fixed-price contracts, as the final cost depends on actual labor hours and material usage. Further analysis would require comparing the hourly rates and overhead applied to similar government contracts for security services in comparable geographic regions.

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 a bid. The presence of two bids suggests a moderate level of competition for this requirement. While two bidders participated, it is unclear if this represents the full extent of potential competition or if other qualified firms chose not to bid. A higher number of bidders typically leads to more competitive pricing and better value for the government.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it aims to secure the best possible price and service through a structured bidding environment, preventing potential price inflation associated with limited competition.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel at the Embassy in Lima, Peru, who will receive enhanced security. The services delivered include security guards and patrol, crucial for maintaining a safe and secure environment. The geographic impact is localized to the U.S. Embassy in Lima, Peru. The contract supports employment for security personnel in Peru, contributing to the local economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type increases risk of cost overruns if not closely managed.
Limited competition (2 bidders) may not have yielded the most cost-effective outcome.
Lack of specific performance metrics or KPIs in the provided data makes assessing service quality difficult.

Positive Signals

Awarded through full and open competition, adhering to procurement best practices.
Contractor G4S is a large, established global security provider with experience.
Definitive contract provides a clear commitment for essential embassy security services.

Sector Analysis

The security services sector is a significant component of government contracting, encompassing a wide range of protective services. This contract falls within the 'Security Guards and Patrol Services' category (NAICS 561612). The global market for private security services is substantial, driven by increasing security concerns worldwide. Government contracts for embassy security are critical for diplomatic missions and often involve stringent requirements and vetting processes. Benchmarking this contract's value would require comparing it against similar security contracts awarded by the State Department or other agencies for diplomatic facilities in comparable regions, considering factors like personnel costs, threat levels, and service scope.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) is false, and there is no information regarding subcontracting plans (st and sn fields). This suggests that the contract was not set aside for small businesses, and there is no explicit indication of small business subcontracting requirements. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, though larger prime contractors like G4S may engage small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting officer and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing payments. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected. The Time and Materials nature of the contract necessitates robust oversight to control costs and ensure efficient use of resources.

Related Government Programs

Embassy Security Contracts
Protective Services Contracts
Department of State Contracts
Security Guard Services

Risk Flags

Time and Materials Pricing
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $9.2 million to G4S PERU S.A.C.. LOCAL GUARD PROGRAM FOR EMBASSY - LIMA, PERU

Who is the contractor on this award?

The obligated recipient is G4S PERU S.A.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.2 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-06-20.

What is the historical spending pattern for security guard services at the U.S. Embassy in Lima, Peru?

Analyzing historical spending for security guard services at the U.S. Embassy in Lima, Peru, requires accessing past contract awards for similar services at that specific location. Without direct access to historical data for this particular embassy, a precise pattern cannot be established. However, generally, government agencies like the Department of State maintain consistent requirements for embassy security due to ongoing geopolitical and safety considerations. Spending typically fluctuates based on contract renewals, changes in security threat assessments, and adjustments in service scope or personnel levels. The current award of $9.2 million over approximately 2.7 years suggests a sustained need for these services. A deeper dive into the Federal Procurement Data System (FPDS) or similar databases, filtering by the specific embassy and service type, would be necessary to identify trends, previous contract values, and incumbent contractors.

How does the per-hour labor cost for security guards under this contract compare to market rates in Lima, Peru?

Determining the precise per-hour labor cost for security guards under this contract is challenging without the detailed breakdown of labor rates, overhead, and profit margins within the Time and Materials (T&M) structure. The total contract value of $9.2 million over 993 days (approximately 714,960 hours, assuming 24/7 coverage) yields an average blended rate of roughly $12.87 per hour. This figure represents the total cost divided by estimated hours and does not reflect the actual labor rate paid to guards. Market rates for security guards in Lima can vary significantly based on experience, licensing, and the specific security firm. General estimates suggest that entry-level security guard wages in Lima might range from $3-$5 per hour, with more experienced or specialized personnel earning higher rates. The government contract rate likely includes significant overhead, benefits, insurance, and profit for the contractor, G4S PERU S.A.C. Therefore, the $12.87/hour average is likely higher than base wages but needs to be benchmarked against comparable government contracts for security services in similar regions to assess value.

What are the specific performance standards and metrics required for G4S PERU S.A.C. under this contract?

The provided contract data does not include specific performance standards or metrics required for G4S PERU S.A.C. Typically, government contracts, especially for critical services like embassy security, include a Performance Work Statement (PWS) or Statement of Work (SOW) that details the required services, performance standards, and metrics. These often cover aspects such as response times, guard attentiveness, incident reporting accuracy, adherence to post orders, and personnel qualifications. For security contracts, metrics might include the number of security incidents, response times to alarms, and successful completion of patrols. The Department of State's Contracting Officer's Representative (COR) is responsible for monitoring contractor performance against these standards. Without the PWS/SOW, a thorough assessment of the contractor's expected performance quality and accountability is not possible from the summary data alone.

What is the track record of G4S PERU S.A.C. in performing similar government security contracts?

G4S is a large, multinational security services company with a significant presence in Peru and globally. While this specific award is to 'G4S PERU S.A.C.', the parent company has a long history of providing security services to governments and private entities worldwide. Assessing the specific track record of 'G4S PERU S.A.C.' in performing similar government security contracts would require examining their past performance evaluations and contract history within the U.S. federal procurement system. Generally, large security firms like G4S are awarded contracts based on their demonstrated capabilities, financial stability, and past performance. However, individual subsidiary performance can vary. Government contract databases often contain past performance information, including ratings and any disputes or terminations, which would provide a clearer picture of their reliability and effectiveness in fulfilling similar government requirements.

What are the potential risks associated with the Time and Materials (T&M) contract type for this embassy security service?

The primary risk associated with a Time and Materials (T&M) contract type for embassy security services is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual hours worked and materials used, plus a fixed fee or labor rate. If not managed diligently, this structure can lead to costs exceeding initial estimates, as the government bears the risk of inefficiencies or scope creep. For security services, this could manifest as excessive overtime, unnecessary personnel deployment, or inflated material costs. Effective oversight by the government's Contracting Officer's Representative (COR) is crucial to monitor labor hours, approve expenditures, and ensure that the services provided are necessary and efficient. Without strong controls, T&M contracts can be less cost-predictable and potentially more expensive than other contract types.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 19AQMM22R0281

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: JR. JOSE GALVEZ NO. 1766 AND 1780, LIMA

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,037,966

Exercised Options: $9,332,765

Current Obligation: $9,200,595

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline