DOE's Savannah River Site Protective Force Contract Awarded to Centerra Group for $1.38 Billion Over 13 Years
Contract Overview
Contract Amount: $1,382,722,836 ($1.4B)
Contractor: Centerra Group, LLC
Awarding Agency: Department of Energy
Start Date: 2009-10-08
End Date: 2023-07-14
Contract Duration: 5,027 days
Daily Burn Rate: $275.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: PROTECTIVE FORCE SECURITY SERVICES FOR THE DEPARTMENT OF ENERGY'S SAVANNAH RIVER SITE
Place of Performance
Location: AIKEN, AIKEN County, SOUTH CAROLINA, 29802
Plain-Language Summary
Department of Energy obligated $1.38 billion to CENTERRA GROUP, LLC for work described as: PROTECTIVE FORCE SECURITY SERVICES FOR THE DEPARTMENT OF ENERGY'S SAVANNAH RIVER SITE Key points: 1. The contract represents a significant investment in site security for the Department of Energy. 2. Centerra Group, LLC, secured this large award, indicating strong capabilities in protective services. 3. The duration of the contract (over 13 years) suggests a long-term need for these services. 4. The cost-plus-award-fee structure allows for performance incentives but requires careful oversight to manage costs.
Value Assessment
Rating: fair
The contract's total value of $1.38 billion over 13 years averages approximately $106 million annually. Benchmarking this against similar large-scale security contracts for federal facilities is challenging due to the unique nature of nuclear site security, but the annual spend appears substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the cost-plus-award-fee (CPAF) structure means the final price is influenced by performance and costs incurred, requiring diligent monitoring.
Taxpayer Impact: Taxpayers are funding a critical security function. While competition aims for efficiency, the CPAF structure necessitates oversight to ensure costs remain reasonable and performance objectives are met.
Public Impact
Ensures the physical security and safety of the Savannah River Site, a critical national asset. Supports jobs in South Carolina through the contractor's operations and personnel. The long-term nature of the contract provides stability for both the government and the contractor. Potential for cost overruns exists within the CPAF structure if not managed effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-award-fee structure can lead to higher costs if not tightly managed.
- Long contract duration may reduce flexibility to adapt to changing security needs or technologies.
- Potential for contractor performance issues impacting security outcomes.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Contract includes award fees, incentivizing strong performance.
- Long-term contract provides stability for critical security operations.
Sector Analysis
The security and guard services sector is vital for government operations, particularly for high-security facilities like nuclear sites. Spending benchmarks for such specialized services are difficult to establish due to unique requirements, but this contract represents a significant portion of the federal spending within this niche.
Small Business Impact
The data indicates this contract was awarded to Centerra Group, LLC, a large entity. There is no explicit information suggesting significant subcontracting opportunities for small businesses within this specific award, though the prime contractor may engage them.
Oversight & Accountability
The cost-plus-award-fee structure necessitates robust oversight from the Department of Energy to ensure costs are reasonable and performance targets are met. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Security Guards and Patrol Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost-plus-award-fee structure requires vigilant oversight.
- Long contract duration may limit adaptability.
- Potential for performance deficiencies impacting critical security.
- Lack of explicit small business participation data.
Tags
security-guards-and-patrol-services, department-of-energy, sc, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $1.38 billion to CENTERRA GROUP, LLC. PROTECTIVE FORCE SECURITY SERVICES FOR THE DEPARTMENT OF ENERGY'S SAVANNAH RIVER SITE
Who is the contractor on this award?
The obligated recipient is CENTERRA GROUP, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $1.38 billion.
What is the period of performance?
Start: 2009-10-08. End: 2023-07-14.
How does the annual cost of this contract compare to similar protective service contracts at other federal high-security facilities?
Direct comparison is difficult due to the unique nature of the Savannah River Site's operations and security requirements. However, the average annual cost of approximately $106 million is substantial. A detailed analysis would require benchmarking against contracts for nuclear facilities, major military bases, or other critical infrastructure protection services, considering scope, personnel, and specific security mandates.
What are the primary risks associated with the cost-plus-award-fee (CPAF) structure in this contract?
The primary risk of a CPAF contract is the potential for cost overruns if the contractor's costs exceed initial estimates, as the government agrees to reimburse allowable costs plus a fee. Additionally, defining and measuring performance metrics for the award fee can be complex, potentially leading to disputes or subjective assessments. Effective government oversight is critical to mitigate these risks.
How effectively does the CPAF structure incentivize Centerra Group to maintain high security standards while controlling costs?
The CPAF structure is designed to incentivize high performance by linking a portion of the contractor's profit (the award fee) to achieving specific performance objectives. This should encourage Centerra Group to maintain rigorous security standards. However, the effectiveness of cost control depends heavily on the clarity and measurability of the performance metrics and the diligence of the government's oversight in scrutinizing incurred costs.
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
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 13530 DULLES TECHNOLOGY DR STE 500, HERNDON, VA, 20171
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,619,218,689
Exercised Options: $1,619,218,689
Current Obligation: $1,382,722,836
Actual Outlays: $311,944,539
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2009-10-08
Current End Date: 2023-07-14
Potential End Date: 2023-07-14 00:00:00
Last Modified: 2024-07-23
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