DoD's $28M Security Contract with Aquate II, LLC Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $27,997,431 ($28.0M)

Contractor: Aquate II, LLC

Awarding Agency: Department of Defense

Start Date: 2017-09-29

End Date: 2022-12-15

Contract Duration: 1,903 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF SBX SECURITY VALENZUELA N103D

Place of Performance

Location: SEMINOLE, SEMINOLE County, OKLAHOMA, 74868

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $28.0 million to AQUATE II, LLC for work described as: IGF::OT::IGF SBX SECURITY VALENZUELA N103D Key points: 1. Contract value of $27.99M over 5 years suggests a moderate annual spend. 2. The contract was awarded under 'Full and Open Competition After Exclusion of Sources', indicating a potentially complex procurement history. 3. Performance has been rated 'OK', suggesting satisfactory delivery of security services. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. The contract's duration of 1903 days (approx. 5.2 years) aligns with typical service contracts of this nature. 6. The small business set-aside flag is false, meaning it was not specifically targeted for small businesses.

Value Assessment

Rating: good

The contract's total value of approximately $28 million over five years averages to about $5.6 million annually. Benchmarking this against similar security guard and patrol services contracts is challenging without more specific service details and geographic scope. However, the firm fixed-price nature suggests that the initial pricing was deemed acceptable and aimed to control costs. The 'OK' performance rating indicates that the contractor is meeting expectations, which supports the value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This specific designation implies that while the competition was intended to be broad, certain sources were excluded, possibly due to prior performance issues, specific qualifications, or other pre-determined criteria. The fact that there were two bidders (no: 2) suggests a limited competitive landscape for this particular award, which could impact price negotiation.

Taxpayer Impact: A limited number of bidders can sometimes lead to higher prices for taxpayers if the excluded sources were strong competitors. However, the firm fixed-price structure helps to cap potential cost increases.

Public Impact

The Department of the Navy benefits from contracted security services to protect its facilities and personnel. This contract ensures the provision of security guards and patrol services, crucial for maintaining operational security. The geographic impact is likely concentrated around the specific Navy installations where the services are rendered, primarily in Oklahoma (sn: OKLAHOMA). The contract supports jobs within the private security industry, contributing to the workforce in the relevant sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type warrants further investigation into why certain bidders were excluded.
Limited competition (2 bidders) may have resulted in a less competitive price than a broader solicitation.
The 'OK' performance rating, while acceptable, leaves room for improvement and could indicate potential areas of concern not fully detailed.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
The contract was awarded under a competitive process, even if limited.
The contract duration is substantial, suggesting a stable and ongoing need for these services.

Sector Analysis

The security services sector, encompassing guard and patrol services (NAICS 561612), is a significant part of the broader professional, scientific, and technical services industry. Federal spending in this area supports a wide range of government functions, from facility protection to event security. Annual spending across the federal government for security services can reach billions of dollars. This contract represents a portion of the Department of Defense's investment in maintaining physical security for its assets and personnel, fitting within the established market for such services.

Small Business Impact

The contract was not awarded as a small business set-aside (sb: false), nor does it appear to have specific subcontracting goals mandated for small businesses based on the provided data. This means that opportunities for small businesses to directly participate in this contract are likely limited to those subcontracting with the prime contractor, Aquate II, LLC. The absence of set-aside provisions suggests the primary focus was on securing the required services through the most competitive means available, rather than specifically fostering small business growth through this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature of the contract simplifies some aspects of financial oversight, as the price is set. Performance monitoring is crucial, indicated by the 'OK' rating. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

Department of Defense Security Contracts
Federal Protective Services
General Services Administration (GSA) Schedule Contracts for Security
Physical Security Services
Guard Services Contracts

Risk Flags

Limited Competition
Exclusion of Sources
Performance Rating 'OK' - Potential for Improvement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.0 million to AQUATE II, LLC. IGF::OT::IGF SBX SECURITY VALENZUELA N103D

Who is the contractor on this award?

The obligated recipient is AQUATE II, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $28.0 million.

What is the period of performance?

Start: 2017-09-29. End: 2022-12-15.

What specific services are included under 'Security Guards and Patrol Services' for this contract?

The provided data indicates the contract falls under NAICS code 561612, 'Security Guards and Patrol Services'. This typically encompasses a range of services including uniformed security guards for access control, patrolling premises to deter and detect unauthorized activities, monitoring surveillance equipment, and responding to security incidents. Specific details regarding the scope of work, such as the number of guards, hours of operation, specific sites covered, and specialized security measures (e.g., K9 units, armed vs. unarmed guards), would be detailed in the contract's Statement of Work (SOW). Without the SOW, the precise nature and extent of the services remain generalized.

Can the 'fair value' assessment be further substantiated with more specific benchmarks?

Substantiating the 'fair value' requires more granular data. While the average annual spend of approximately $5.6 million is noted, a true benchmark would involve comparing the per-guard hourly rate, or the cost per man-hour, against similar contracts awarded by the DoD or other federal agencies in the same geographic region (Oklahoma) and for comparable security levels (e.g., armed vs. unarmed, level of training required). The 'OK' performance rating suggests the contractor is meeting basic requirements, but doesn't necessarily indicate exceptional value. Without access to the specific pricing structure and detailed service levels, assessing whether the $28 million represents optimal value for the services rendered is difficult.

What are the implications of the 'Full and Open Competition After Exclusion of Sources' award type?

This award type suggests a deviation from standard full and open competition. It implies that the initial solicitation was intended to be open to all responsible sources, but specific entities were subsequently excluded. Reasons for exclusion can vary, including failure to meet minimum qualifications, past performance issues, or specific agency requirements that narrowed the field. The fact that only two bidders ultimately participated indicates that the exclusion criteria, or other market factors, significantly limited the competitive pool. This can raise concerns about whether the government received the best possible pricing and selection, as a more robust competition typically drives down costs and increases innovation.

What is the significance of the contract being a 'Definitive Contract'?

A definitive contract is a contract that is fully funded and has a definite price and quantity, or a formula for determining price and quantity. In this case, it's a Definitive Contract awarded under Firm Fixed Price terms. This means the price is set and not subject to adjustment based on the contractor's cost experience. This provides the highest degree of cost control for the government, as the contractor bears the risk of cost overruns. It contrasts with cost-reimbursement contracts where the government assumes more of the financial risk.

How does the 'OK' performance rating impact the assessment of this contract?

An 'OK' performance rating signifies that the contractor is meeting the contract's requirements in an acceptable manner. It is not an 'Outstanding' rating, which would indicate exceptional performance, nor is it a 'Marginal' or 'Unacceptable' rating, which would signal significant problems. For a contract focused on essential services like security, an 'OK' rating suggests the core objectives are being met, providing a baseline level of assurance. However, it also implies there is likely room for improvement in service delivery, efficiency, or responsiveness. Agencies typically use performance ratings to inform future contracting decisions, including award renewals or selection of new contractors.

What is the historical spending pattern for security services by the Department of the Navy in Oklahoma?

Analyzing historical spending patterns for security services by the Department of the Navy specifically in Oklahoma requires access to detailed procurement databases beyond the provided summary data. While this contract (N103D) represents a significant award of $27.99M from FY2017-FY2022, it's one data point. To understand patterns, one would need to examine spending across multiple fiscal years, identify other contracts for similar services (NAICS 561612) awarded to various contractors within Oklahoma, and compare contract values, durations, and competition levels. This would reveal trends in annual spending, average contract size, and the prevalence of different competition types, providing context for the current contract's scale and nature.

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

Solicitation ID: N3220517R3102

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2005 WEST WRANGLER BLVD, SEMINOLE, OK, 74868

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Government, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,997,431

Exercised Options: $27,997,431

Current Obligation: $27,997,431

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline