DHS awarded $65M for security services, with a single bid raising value concerns

Contract Overview

Contract Amount: $65,082,621 ($65.1M)

Contractor: G4S Secure Solutions (USA) Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2011-08-30

End Date: 2012-08-29

Contract Duration: 365 days

Daily Burn Rate: $178.3K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRANSPORTATION AND GUARD SERVICES

Place of Performance

Location: WEST PALM BEACH, PALM BEACH County, FLORIDA, 33410

State: Florida Government Spending

Plain-Language Summary

Department of Homeland Security obligated $65.1 million to G4S SECURE SOLUTIONS (USA) INC. for work described as: TRANSPORTATION AND GUARD SERVICES Key points: 1. The contract was competed under Simplified Acquisition Procedures (SAP), potentially limiting broad market engagement. 2. A single bid suggests limited competition, which can impact price discovery and potentially lead to higher costs. 3. The contract's fixed-price nature provides cost certainty but may not fully capture performance variations. 4. The award to G4S Secure Solutions (USA) Inc. represents a significant investment in security guard services. 5. The duration of one year with a single awardee warrants scrutiny for potential long-term cost-effectiveness. 6. The lack of small business set-aside or subcontracting requirements may limit broader economic participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $65 million contract is challenging without more detailed service descriptions and performance metrics. However, the fact that it was competed under SAP and received only one bid raises concerns about whether the government secured the best possible price. Compared to similar large-scale security contracts, the per-unit cost for guards would need to be analyzed against prevailing market rates and the specific security requirements of U.S. Customs and Border Protection. The fixed-price nature, while offering predictability, could mask inefficiencies if the contractor's costs are significantly lower than the awarded price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a less formal and potentially more restricted competition than full and open procedures. The fact that only one bid was received indicates a very limited competitive environment for this specific requirement. While SAP is intended for smaller procurements, its use for a $65 million award suggests either a very specific niche requirement or a potential missed opportunity for broader market engagement and price competition. The limited number of bidders directly impacts the government's ability to leverage market forces to achieve optimal pricing.

Taxpayer Impact: A single bid means taxpayers may not have benefited from the most competitive pricing available in the market. The lack of robust competition could result in the government paying more than necessary for these essential security services.

Public Impact

U.S. Customs and Border Protection (CBP) benefits from enhanced security services to protect national borders and facilitate lawful trade. The contract provides essential security guard and patrol services, contributing to the operational readiness of CBP facilities. Services are primarily delivered in Florida, impacting the local economy through employment and contractor operations. The contract supports jobs for security personnel within the geographic area of service.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition for a large contract value may indicate suboptimal price discovery.
Use of SAP for a $65M award could restrict market access for potential bidders.
Lack of small business participation noted.

Positive Signals

Contract awarded to a known entity (G4S Secure Solutions) with experience in the security sector.
Fixed-price contract provides cost certainty for the government.
Awarded for essential security services critical to national security operations.

Sector Analysis

The security services industry is a substantial sector within the broader professional, scientific, and technical services market. This contract falls under the 'Security Guards and Patrol Services' NAICS code (561612). The market is characterized by a mix of large global providers like G4S and numerous smaller regional and local firms. Government contracts for security services are a significant portion of this market, driven by the need for protection across federal agencies and facilities. Benchmarking this $65 million award would involve comparing the per-guard cost and service scope against other federal and state contracts for similar security functions, considering geographic location and specific security requirements.

Small Business Impact

This contract does not appear to have included a small business set-aside, nor is there information indicating subcontracting goals for small businesses. The award to a large, established firm like G4S suggests that opportunities for small businesses to participate in this specific contract may have been limited. This could mean a missed opportunity to foster small business growth within the federal contracting ecosystem for security services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security and U.S. Customs and Border Protection contracting officers and program managers. The contract's fixed-price nature simplifies some aspects of financial oversight, focusing on delivery and compliance. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Protective Service Contracts
Department of Defense Security Services
Immigration and Customs Enforcement Security Services
General Services Administration Schedules for Security Services

Risk Flags

Limited competition
Potential for overpricing due to single bid
Use of SAP for a large contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $65.1 million to G4S SECURE SOLUTIONS (USA) INC.. TRANSPORTATION AND GUARD SERVICES

Who is the contractor on this award?

The obligated recipient is G4S SECURE SOLUTIONS (USA) INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $65.1 million.

What is the period of performance?

Start: 2011-08-30. End: 2012-08-29.

What is the historical spending pattern for security guard services by U.S. Customs and Border Protection?

Analyzing historical spending by U.S. Customs and Border Protection (CBP) on security guard services reveals a consistent need for these services to maintain border security and protect critical infrastructure. While specific year-over-year figures for this exact contract type are not provided in the abbreviated data, CBP's overall budget and mission scope necessitate significant investment in physical security. Past awards for similar services, often competed through various mechanisms including GSA schedules, IDIQs, and direct solicitations, would show a trend of substantial expenditure. The $65 million awarded in this instance is a significant sum, suggesting either a large scope of work, extended duration, or a high cost per guard, which warrants comparison with previous CBP security contracts to assess if spending is in line with historical trends or represents an escalation.

How does the awarded price compare to market rates for security guards in Florida?

Determining the precise market rate comparison for this $65 million contract is complex without specific details on the number of guards, hours, and required skill sets. However, general labor market data for Florida indicates that security guard wages can vary significantly based on experience, licensing, and the type of security provided (e.g., unarmed vs. armed, specialized surveillance). For a large contract like this, the blended hourly rate across all positions would need to be benchmarked against industry surveys and publicly available data for similar government contracts in the region. Given the limited competition and SAP procurement method, there's a risk the awarded price may not fully reflect the most competitive market rates achievable through broader solicitation.

What are the specific risks associated with a sole-bid competition under SAP for a large contract?

A sole-bid competition, especially under Simplified Acquisition Procedures (SAP) for a contract valued at $65 million, presents several significant risks. Firstly, it severely limits price discovery, meaning the government may not be obtaining the most cost-effective solution. The lack of competition can reduce the incentive for the awarded contractor to be efficient or offer innovative solutions. Secondly, it raises questions about the adequacy of the solicitation process; either the requirement was too niche, the solicitation was not widely disseminated, or potential competitors were deterred. This can lead to potential overpayment and a lack of market responsiveness. Lastly, it could indicate potential issues with market research or an over-reliance on a single vendor, which can create future dependency risks.

What is the track record of G4S Secure Solutions (USA) Inc. in performing federal security contracts?

G4S Secure Solutions (USA) Inc. is a major global provider of security services and has a substantial track record of performing federal contracts across various agencies. Their experience typically includes providing physical security, access control, monitoring, and personnel for government facilities, including sensitive sites. Federal procurement databases often show numerous awards to G4S for security guard services, ranging in value and scope. While specific performance ratings for this particular contract are not detailed here, their continued presence as a bidder and awardee on federal contracts suggests a general capability to meet government requirements. However, as with any large contractor, a deeper dive into past performance reviews, any past disputes, or contract terminations would be necessary for a comprehensive assessment.

What are the implications of using a Firm Fixed Price (FFP) contract for security services?

A Firm Fixed Price (FFP) contract is generally preferred by government agencies when the scope of work is well-defined and risks can be reasonably assessed upfront, as it provides cost certainty. For security services, an FFP contract means the contractor, G4S Secure Solutions (USA) Inc. in this case, assumes the primary risk for cost overruns. This incentivizes the contractor to manage their resources efficiently to maintain profitability. However, if the scope of work changes significantly or unforeseen circumstances arise that were not contemplated in the original pricing, the contractor may be less willing or able to accommodate necessary adjustments without formal contract modifications, potentially leading to performance issues or requests for equitable adjustments. The fixed price also means the government pays the agreed-upon amount regardless of minor fluctuations in the contractor's actual 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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: G4S PLC (UEI: 737341631)

Address: 4200 WACKENHUT DR STE 100, PALM BEACH GARDENS, FL, 21

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $65,082,621

Exercised Options: $65,082,621

Current Obligation: $65,082,621

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HSBP1006A01327

IDV Type: BPA

Timeline