Homeland Security awards $2.2M for PSO services in Northern NJ, highlighting security guard sector spending

Contract Overview

Contract Amount: $2,211,631 ($2.2M)

Contractor: Paragon Systems Inc

Awarding Agency: Department of Homeland Security

Start Date: 2022-10-01

End Date: 2022-11-30

Contract Duration: 60 days

Daily Burn Rate: $36.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROTECTIVE SECURITY OFFICER (PSO) SERVICES IN NORTHERN NJ

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2.2 million to PARAGON SYSTEMS INC for work described as: PROTECTIVE SECURITY OFFICER (PSO) SERVICES IN NORTHERN NJ Key points: 1. Contract value represents a portion of broader federal spending on security services. 2. Competition dynamics for this contract are assessed to understand price discovery. 3. Risk indicators are evaluated based on contract type and performance history. 4. Performance context is provided by comparing to similar security service contracts. 5. Sector positioning is analyzed within the context of the security guard industry. 6. The contract's fixed-price nature aims to control costs for the government.

Value Assessment

Rating: good

The contract value of approximately $2.2 million for two months of Protective Security Officer (PSO) services in Northern New Jersey appears reasonable when benchmarked against similar federal contracts for security guard services. The firm-fixed-price structure suggests that the government has a clear understanding of the costs involved, and the awarded amount is within expected ranges for the scope of work. Without specific per-unit cost data, a direct comparison is challenging, but the overall award size does not immediately raise concerns about overpricing for the duration and geographic coverage.

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. The specific number of bidders is not provided, but the use of full and open competition generally fosters a competitive environment, which is expected to lead to more favorable pricing for the government. This approach allows for a wider pool of potential contractors to be considered, potentially bringing innovative solutions and competitive bids to the table.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for cost savings through robust bidding and encourages a wider range of service providers to compete, driving down prices.

Public Impact

Federal facilities and personnel in Northern New Jersey are protected by the services rendered. The contract ensures the provision of essential security guard services, contributing to public safety. Geographic impact is focused on the Northern New Jersey region, securing specific federal sites. Workforce implications include employment opportunities for security personnel within the contracted region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (2 months) may limit long-term contractor investment and potentially lead to higher per-diem rates if not managed carefully.
Lack of detailed performance metrics in the provided data makes it difficult to assess the quality of services delivered.
The specific nature of 'protective security officer' duties requires clear definition to ensure appropriate service levels are met.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that should yield fair pricing.
Firm-fixed-price contract type helps to control costs and provides budget certainty for the agency.
The contract is managed by the Office of Procurement Operations, indicating established procurement processes are in place.

Sector Analysis

The security guard services sector is a significant component of the broader security and protective services industry. Federal spending in this area is substantial, driven by the need to protect government facilities, personnel, and assets. This contract, valued at approximately $2.2 million for a two-month period, falls within the typical range for localized security guard services. Comparable contracts often involve similar firm-fixed-price structures and are awarded through competitive processes to ensure value for money.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Further analysis would be needed to determine if small businesses were precluded from bidding or if they participated in the competition.

Oversight & Accountability

The contract is managed by the Department of Homeland Security's Office of Procurement Operations, which is responsible for overseeing federal procurement activities. Oversight mechanisms would typically include contract performance monitoring, financial reviews, and adherence to federal acquisition regulations. Transparency is generally maintained through contract award databases, though specific performance details may be internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Protective Service Contracts
Security Guard Services
Department of Homeland Security Procurement
General Services Administration Schedules (potential overlap)

Risk Flags

Potential for cost-cutting on service quality due to fixed-price nature.
Short contract duration may not reflect long-term security needs.
Limited transparency on specific performance metrics and bidder numbers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2.2 million to PARAGON SYSTEMS INC. PROTECTIVE SECURITY OFFICER (PSO) SERVICES IN NORTHERN NJ

Who is the contractor on this award?

The obligated recipient is PARAGON SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $2.2 million.

What is the period of performance?

Start: 2022-10-01. End: 2022-11-30.

What is the typical cost per PSO per day for similar contracts in the Northern New Jersey region?

Determining the precise per-day cost per Protective Security Officer (PSO) requires detailed data on the number of officers deployed, hours worked, and specific service requirements. However, based on industry benchmarks and publicly available contract data for security guard services, daily rates can range significantly. For a contract of this nature, assuming a standard 8-hour shift and factoring in overhead, benefits, and profit, a typical rate might fall between $300 to $500 per officer per day. The total award of $2,211,631.23 over approximately 60 days suggests an average daily expenditure of around $36,860. If we assume a team of PSOs working concurrently, this could translate to roughly 75-120 officers per day, depending on the exact rate. This estimate is highly dependent on the specific security level required and the competitive landscape.

How does the awarded amount compare to the total federal spending on security guards and patrol services annually?

The awarded amount of approximately $2.2 million for two months of PSO services in Northern New Jersey represents a localized expenditure within the broader federal spending on security guards and patrol services. Annually, federal agencies collectively spend billions of dollars on these services across various departments and locations. For instance, the General Services Administration (GSA) alone manages numerous security contracts. While this specific contract is a modest portion of the total, it reflects the ongoing demand and significant investment the federal government makes in maintaining security infrastructure nationwide. The North American Industry Classification System (NAICS) code 561612 (Security Guards and Patrol Services) encompasses a vast market, and this contract is one of many contributing to the overall federal outlay in this sector.

What are the key performance indicators (KPIs) typically used for Protective Security Officer contracts?

Key Performance Indicators (KPIs) for Protective Security Officer (PSO) contracts are crucial for ensuring the effectiveness and quality of services. Common KPIs include response times to incidents, adherence to post orders, officer punctuality and attendance rates, successful completion of patrols and checks, incident reporting accuracy and timeliness, and customer satisfaction surveys (if applicable to facility occupants). For PSO services, metrics related to the prevention of unauthorized access, detection of security breaches, and the overall security posture of the protected area are paramount. The Department of Homeland Security, like other agencies, would typically establish specific, measurable, achievable, relevant, and time-bound (SMART) KPIs within the contract's Performance Work Statement (PWS) to evaluate contractor performance.

What is the track record of Paragon Systems Inc. in providing similar security services to the federal government?

Paragon Systems Inc. is a well-established government contractor with a significant history of providing security services, including Protective Security Officer (PSO) functions, to various federal agencies. They have held numerous contracts with departments such as Homeland Security, Defense, and others, often involving physical security, access control, and guard services. Their track record generally includes experience with firm-fixed-price contracts awarded through full and open competition, similar to this delivery order. Performance evaluations for Paragon Systems can be found in federal contract databases like the Federal Procurement Data System (FPDS) and through sources like the Contractor Performance Assessment Reporting System (CPARS), which provide insights into their past performance, including any issues or commendations received on previous engagements.

Are there any specific risks associated with firm-fixed-price contracts for security services?

Firm-fixed-price (FFP) contracts, while beneficial for cost control, can introduce certain risks, particularly in service-based contracts like PSO services. A primary risk is that the contractor may be incentivized to cut corners on service quality to maximize profit if the initial price estimate was too low or if unforeseen operational challenges arise. Conversely, if the price was set too high due to overly conservative estimates by the contractor, taxpayers may bear a higher cost than necessary. For the government, the risk lies in ensuring that the defined scope of work is comprehensive enough to cover all necessary security functions without leading to change orders that could inflate costs. Effective government oversight and clear performance standards are critical to mitigating these risks with FFP contracts.

How does the geographic focus (Northern New Jersey) influence the cost and competition for this contract?

The geographic focus on Northern New Jersey can influence both the cost and competition for this PSO contract. Labor costs in this region are generally higher than in many other parts of the country due to the cost of living and prevailing wage rates, which would naturally increase the contract's overall price. Competition might be influenced by the presence of established security firms operating within that specific geographic area. While full and open competition allows any qualified bidder, local or national, to participate, regional firms may have an advantage due to established infrastructure, local knowledge, and existing personnel pools. However, a highly competitive regional market could also drive prices down. The specific number of bidders would provide a clearer picture of the competitive dynamics.

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

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

Financial Breakdown

Contract Ceiling: $2,211,631

Exercised Options: $2,211,631

Current Obligation: $2,211,631

Actual Outlays: $2,184,605

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70RFP120DE2000003

IDV Type: IDC

Timeline