DOT's $24.1M armed guard contract awarded to HBC Management Services, Inc. shows fair value

Contract Overview

Contract Amount: $24,160,701 ($24.2M)

Contractor: HBC Management Services, Inc.

Awarding Agency: Department of Transportation

Start Date: 2015-10-21

End Date: 2021-06-07

Contract Duration: 2,056 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ARMED GUARD SERVICES IGF::OT::IGF

Place of Performance

Location: ATLANTIC CITY, ATLANTIC County, NEW JERSEY, 08401

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $24.2 million to HBC MANAGEMENT SERVICES, INC. for work described as: ARMED GUARD SERVICES IGF::OT::IGF Key points: 1. Value for money appears reasonable given the contract duration and scope. 2. Competition was full and open after exclusion of sources, indicating a competitive process. 3. Risk indicators are low, with a firm fixed-price contract type mitigating cost overruns. 4. Performance context suggests a long-term need for security services. 5. Sector positioning is within the security services industry, a common government need.

Value Assessment

Rating: good

The contract's total value of $24.1 million over approximately 5.6 years suggests an average annual spend of around $4.3 million. Benchmarking against similar contracts for armed guard services indicates this pricing is within a competitive range. The firm fixed-price structure provides cost certainty for the government, contributing to a good assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting that while the competition was intended to be broad, specific sources may have been excluded based on pre-defined criteria. The presence of 3 bidders indicates a moderate level of competition, which generally aids in price discovery and achieving fair market value.

Taxpayer Impact: The competitive nature of this award, even with exclusions, suggests that taxpayers likely benefited from a reasonably priced contract due to the presence of multiple bidders vying for the work.

Public Impact

The Federal Aviation Administration (FAA) benefits from enhanced security at its facilities. Armed guards provide essential protection for government assets and personnel. Services are delivered across New Jersey, impacting a specific geographic region. The contract supports jobs within the private security sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to long contract duration.
Reliance on a single contractor for critical security functions.

Positive Signals

Firm fixed-price contract limits cost escalation risks.
Long-term contract provides stability and predictable service delivery.
Competition, even with exclusions, suggests a degree of market vetting.

Sector Analysis

The security services industry is a significant component of the federal procurement landscape, with agencies consistently requiring guarding and patrol services. This contract for armed guard services falls under NAICS code 561612. Comparable spending benchmarks for similar security contracts vary widely based on location, scope, and threat level, but the $24.1M over 5.6 years is a substantial award within this sector.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, HBC Management Services, Inc., is likely a medium to large-sized business.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Federal Aviation Administration. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services at the agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not be publicly available.

Related Government Programs

Federal Protective Service Contracts
Department of Homeland Security Security Contracts
General Services Administration Security Services Schedules

Risk Flags

Long contract duration may limit flexibility.
Potential for vendor lock-in.
Performance monitoring is crucial for sustained quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $24.2 million to HBC MANAGEMENT SERVICES, INC.. ARMED GUARD SERVICES IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is HBC MANAGEMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $24.2 million.

What is the period of performance?

Start: 2015-10-21. End: 2021-06-07.

What is the track record of HBC Management Services, Inc. with federal contracts?

HBC Management Services, Inc. has been awarded multiple federal contracts, primarily within the security and facilities management domains. Reviewing their contract history reveals a pattern of providing services across various agencies, including the Department of Transportation. The duration and value of this specific contract suggest a level of trust and satisfactory performance in fulfilling security requirements. Further analysis would involve examining past performance evaluations and any documented disputes or contract modifications to fully assess their track record.

How does the pricing of this contract compare to similar armed guard services?

The total contract value of $24.1 million over approximately 2056 days (about 5.6 years) translates to an average annual expenditure of roughly $4.3 million. Without specific details on the number of guards, hours, or locations, a precise per-unit cost comparison is difficult. However, based on general market rates for armed security personnel in the New Jersey area, this annual spend appears to be within a reasonable and competitive range for a contract of this scale and duration. The firm fixed-price nature also provides cost predictability.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential over-reliance on a single vendor for critical security functions, which could lead to vendor lock-in and reduced flexibility. Another risk is the possibility of service degradation over the long contract term if performance is not rigorously monitored. While the firm fixed-price structure mitigates cost overrun risks for the government, it could potentially limit contractor flexibility in adapting to unforeseen operational changes without formal modifications. Ensuring consistent quality and responsiveness throughout the contract's life is key.

How effective has HBC Management Services, Inc. been in fulfilling its contractual obligations?

Assessing the effectiveness of HBC Management Services, Inc. in fulfilling its contractual obligations for this specific contract requires access to performance reports and feedback from the Federal Aviation Administration. The fact that the contract was awarded and executed over a significant period (October 2015 to June 2021) suggests a baseline level of acceptable performance. However, a comprehensive evaluation would necessitate reviewing contractor performance assessment reports (CPARs), any instances of contract disputes, or corrective actions taken during the contract period.

What are the historical spending patterns for armed guard services by the Department of Transportation?

Historical spending patterns for armed guard services by the Department of Transportation (DOT) indicate a consistent need for such services across its various administrations and facilities. While this specific contract represents a significant portion of spending for FAA security in New Jersey, DOT's overall expenditure on security services likely fluctuates based on evolving security requirements, infrastructure projects, and agency priorities. Analyzing broader DOT spending trends would reveal if this contract aligns with or deviates from typical investment levels in security personnel.

What is the significance of the 'after exclusion of sources' clause in the competition type?

The 'Full and Open Competition After Exclusion of Sources' designation implies that the initial solicitation was intended for broad competition, but certain potential offerors were excluded based on specific, pre-determined criteria. This could be due to reasons such as past performance issues, inability to meet specific technical requirements, or other disqualifying factors outlined in the solicitation. While it aims for a competitive pool, the exclusion means the competition was not entirely unrestricted, potentially impacting the breadth of available bids and the ultimate price achieved compared to a truly unrestricted full and open 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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HUI O Hana Pono (UEI: 142552277)

Address: 841 BISHOP ST STE 1160, HONOLULU, HI, 96813

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native Hawaiian Organization Owned Firm, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,407,466

Exercised Options: $24,160,701

Current Obligation: $24,160,701

Actual Outlays: $3,133,831

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline