State Department awards $9.5M contract for Hong Kong security services to G4S Hong Kong JV

Contract Overview

Contract Amount: $9,520,800 ($9.5M)

Contractor: G4S Hong Kong JV

Awarding Agency: Department of State

Start Date: 2024-12-01

End Date: 2026-11-30

Contract Duration: 729 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: US MISSION HONG KONG LOCAL GUARD SERVICES

Plain-Language Summary

Department of State obligated $9.5 million to G4S HONG KONG JV for work described as: US MISSION HONG KONG LOCAL GUARD SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Time and Materials, which can pose cost control risks if not managed closely. 3. The duration of 729 days (approximately 2 years) provides a stable period for service delivery. 4. The award amount of $9.5M falls within a moderate spending range for security services. 5. The North American Industry Classification System (NAICS) code 561612 indicates a focus on security guard services. 6. The contract is a definitive contract, implying a firm commitment from the government.

Value Assessment

Rating: fair

The contract value of $9.5 million over approximately two years for local guard services in Hong Kong appears to be within a reasonable range for such specialized security needs. Benchmarking against similar contracts for diplomatic missions or large-scale private security operations would provide a more precise value assessment. The Time and Materials pricing structure, however, introduces a degree of uncertainty regarding the final cost, as it depends on the actual hours worked and materials used. Without detailed breakdowns of labor rates and material markups, a definitive value-for-money judgment is challenging.

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 bidders suggests a moderate level of competition for this specific requirement. While two bidders are better than one, a higher number of bids would typically lead to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process, including the evaluation criteria and the number of proposals received, are not provided, which limits a deeper analysis of the competitive dynamics.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and services, potentially leading to cost savings. However, with only two bidders, the potential for significant cost reduction may be limited compared to scenarios with numerous competing offers.

Public Impact

The U.S. Mission in Hong Kong will benefit from continuous and reliable security guard services. The contract ensures the physical security and safety of U.S. government personnel and property at the mission. Services are geographically focused on the U.S. Mission facilities in Hong Kong. The contract supports local employment in Hong Kong through the provision of guard services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored, as the government pays for actual labor hours and materials used, plus a markup.
With only two bidders, the level of competition may not have driven prices down to the lowest possible point.
Lack of detailed performance metrics in the provided data makes it difficult to assess the quality of service expected or delivered.

Positive Signals

Awarded under full and open competition, which generally promotes fair pricing and access for qualified vendors.
The contract provides a defined period of service (729 days), ensuring continuity of essential security functions.
The contractor, G4S, is a well-established global security provider, suggesting experience and capacity.

Sector Analysis

The security services sector is a significant component of the broader professional, scientific, and technical services industry. This contract falls under the security guards and patrol services sub-sector (NAICS 561612). The global security market is substantial, driven by increasing security concerns across various sectors, including government, corporate, and critical infrastructure. Government contracts for security services are common, particularly for embassies, consulates, and federal facilities, often requiring specialized expertise and adherence to strict protocols. Benchmarking this contract's value would involve comparing it to similar security contracts awarded by other government agencies or to large private sector entities for comparable services in major international cities.

Small Business Impact

The data indicates that small business participation is not a primary focus for this contract, as the 'ss' (small business set-aside) field is false and the 'sb' (small business) field is also false. There is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary contractor, G4S Hong Kong JV, is likely a large business, and the contract was not specifically designed to promote small business involvement. Therefore, the direct impact on the small business ecosystem is likely minimal, unless the prime contractor voluntarily engages small businesses for specific support roles not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of State's contracting officers and program managers responsible for the U.S. Mission in Hong Kong. Standard government oversight mechanisms, including performance monitoring, invoice review, and contract compliance checks, would be applied. Transparency is facilitated through contract award databases like FPDS. The Inspector General of the Department of State would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of State Diplomatic Security Services
Worldwide Protective Services
Federal Protective Service Contracts
Embassy and Consulate Security Contracts

Risk Flags

Cost Control Risk (Time and Materials)
Limited Competition (2 Bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $9.5 million to G4S HONG KONG JV. US MISSION HONG KONG LOCAL GUARD SERVICES

Who is the contractor on this award?

The obligated recipient is G4S HONG KONG JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.5 million.

What is the period of performance?

Start: 2024-12-01. End: 2026-11-30.

What is the historical spending pattern for local guard services at the U.S. Mission in Hong Kong?

Without access to historical contract data specifically for the U.S. Mission in Hong Kong's local guard services, it is difficult to establish a precise spending pattern. However, the Department of State consistently procures security services for its diplomatic missions worldwide. These contracts are typically long-term and awarded through competitive processes. The current award of approximately $9.5 million over two years suggests a significant and ongoing need for security personnel. To understand historical patterns, one would need to analyze past awards for similar services at this specific mission or comparable missions in high-threat environments, looking at contract values, durations, and contractor performance over time. This would reveal trends in cost escalation, service scope changes, and contractor stability.

How does the per-hour labor cost for this contract compare to market rates for security guards in Hong Kong?

Determining the exact per-hour labor cost from the provided data is not possible, as the contract is Time and Materials (T&M) and does not specify fixed hourly rates or total hours. T&M contracts typically include negotiated labor rates for different skill levels, plus a markup for materials and overhead. To compare with market rates in Hong Kong, one would need to obtain the specific labor rates agreed upon in the contract and then benchmark them against publicly available data for security guard wages in Hong Kong, considering factors like experience, licensing, and the specific security duties required. General market data suggests that experienced security personnel in major international cities can command higher rates. Without the contract's detailed rate schedule, such a comparison remains speculative.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for security guard services, typical KPIs often include metrics related to response times to incidents, adherence to post orders, incident reporting accuracy and timeliness, personnel punctuality and attendance, and the successful prevention of security breaches. The contract likely includes a performance work statement (PWS) that outlines these requirements and the methods for measuring performance. The Department of State would monitor these KPIs to ensure the contractor is meeting the required standards for protecting the U.S. Mission and its personnel. Failure to meet KPIs could result in contractually defined remedies or penalties.

What is the risk associated with the Time and Materials (T&M) contract type for this service?

The primary risk associated with a Time and Materials (T&M) contract type for security guard services is the potential for cost escalation. Unlike fixed-price contracts, T&M contracts obligate the government to pay for all the labor hours expended and materials used, plus an agreed-upon markup. If the contractor's efficiency is low, or if the scope of work expands without adequate controls, the total cost can significantly exceed initial estimates. For this $9.5 million contract over 729 days, effective oversight by the Department of State is crucial. This includes rigorous monitoring of labor hours, verification of materials, and strict management of any scope changes to mitigate the risk of uncontrolled cost growth and ensure value for taxpayer money.

How does the number of bidders (2) impact the potential for cost savings for the government?

Having only two bidders for this contract suggests a moderate level of competition. While competition is generally beneficial for cost savings, a lower number of bidders typically reduces the downward pressure on pricing compared to a scenario with numerous competitors. With only two offers, the government may not achieve the most aggressive pricing possible. The final price is influenced by the specific capabilities required, the market for security services in Hong Kong, and the bidders' strategic pricing decisions. To maximize savings, the government would have relied on a robust evaluation process that thoroughly assessed both technical merit and price, potentially negotiating with the bidders to secure the best possible terms within the constraints of the limited competition.

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: 19AQMM24R0001

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1395 UNIVERSITY BLVD, JUPITER, FL, 33458

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

Financial Breakdown

Contract Ceiling: $34,929,961

Exercised Options: $13,067,000

Current Obligation: $9,520,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline