State Department awards $31.5M security services contract to Security Alliance LLC under full and open competition

Contract Overview

Contract Amount: $31,456,720 ($31.5M)

Contractor: Security Alliance LLC

Awarding Agency: Department of State

Start Date: 2017-03-20

End Date: 2024-10-31

Contract Duration: 2,782 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: NEW CONTRACT AWARD IGF::CL::IGF

Plain-Language Summary

Department of State obligated $31.5 million to SECURITY ALLIANCE LLC for work described as: NEW CONTRACT AWARD IGF::CL::IGF Key points: 1. Contract awarded for security guard and patrol services, a critical function for government facilities. 2. The contract duration spans over 7 years, indicating a long-term need for these services. 3. Awarded via full and open competition, suggesting a competitive bidding process. 4. The use of Time and Materials pricing may present cost control challenges if not closely managed. 5. The contract value is substantial, requiring robust oversight to ensure value for taxpayer money. 6. Small business participation is not explicitly mandated, warranting further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The contract value of $31.5 million over approximately 7.5 years averages to about $4.2 million annually. Benchmarking this against similar contracts for security guard and patrol services is challenging without more specific details on the scope of services, geographic locations, and security levels required. However, the Time and Materials pricing structure, while flexible, can lead to higher costs if not managed diligently, potentially impacting the overall value for money. The number of bids received (2) is on the lower side for a full and open competition, which could suggest less aggressive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit a bid. However, only two bids were received. While competition was allowed, the low number of bidders might suggest potential barriers to entry for other firms or a limited pool of qualified contractors for this specific requirement. This level of competition could impact price discovery and potentially lead to less competitive pricing than if more bids had been submitted.

Taxpayer Impact: A limited number of bidders in a full and open competition means taxpayers may not have benefited from the most aggressive pricing possible. While competition existed, it was not as robust as it could have been, potentially leading to a higher overall cost.

Public Impact

The Department of State benefits from continuous security guard and patrol services to protect its personnel and facilities. This contract ensures the physical security of government assets and operations. The services are likely to be delivered across various Department of State locations, potentially impacting multiple geographic areas. The contract supports jobs within the security services industry, contributing to the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure.
Low number of bidders (2) in a full and open competition may indicate limited market responsiveness or high barriers to entry.
Lack of explicit small business set-aside or subcontracting requirements could limit opportunities for small businesses.

Positive Signals

Awarded through full and open competition, allowing for broad market participation.
Long contract duration suggests a stable and ongoing need for essential security services.
The contractor, Security Alliance LLC, is responsible for providing critical security functions.

Sector Analysis

The security services industry is a significant sector within the broader professional, scientific, and technical services market. This contract falls under the Security Guards and Patrol Services sub-sector (NAICS 561612). The market is characterized by a mix of large, established firms and smaller, specialized providers. Government contracts for security services are substantial, driven by the need to protect federal assets and personnel. This award represents a portion of that overall federal spending, competing with other contracts for similar services across various agencies.

Small Business Impact

This contract does not appear to have a specific small business set-aside, as indicated by 'sb': false. There is also no information provided regarding subcontracting plans ('st' and 'sn' are empty). This suggests that opportunities for small businesses may be limited to those that can compete directly as prime contractors or potentially through unsolicited subcontracts if the prime contractor chooses to engage them. Further investigation into the contractor's subcontracting practices would be necessary to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The use of Time and Materials pricing necessitates close monitoring of labor hours and material costs to ensure compliance and prevent overcharging. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency would be enhanced through contract data reporting systems.

Related Government Programs

Department of State Security Contracts
Federal Security Guard Services
Protective Services Contracts
General Services Administration (GSA) Schedules for Security

Risk Flags

Potential for cost overruns due to T&M pricing.
Low number of bidders may indicate limited competition.
Lack of explicit small business subcontracting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $31.5 million to SECURITY ALLIANCE LLC. NEW CONTRACT AWARD IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is SECURITY ALLIANCE LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $31.5 million.

What is the period of performance?

Start: 2017-03-20. End: 2024-10-31.

What is the historical spending pattern for security guard and patrol services by the Department of State?

Analyzing historical spending patterns for security guard and patrol services by the Department of State is crucial for understanding the context of this $31.5 million award. While specific historical data is not provided in the abbreviated input, typical patterns involve consistent, long-term contracts due to the ongoing nature of security needs. Spending often fluctuates based on geopolitical events, changes in security threat levels, and budget allocations. Agencies like the State Department often rely on multiple contracts to cover various geographic regions and specific security requirements. Benchmarking this award against previous years' spending would reveal whether this represents an increase, decrease, or stable level of investment in these services. It would also help identify trends in contract types (e.g., fixed-price vs. T&M) and competition levels over time.

How does the number of bidders (2) compare to similar security services contracts awarded by the Department of State?

The receipt of only two bids for this $31.5 million security services contract, despite being awarded under full and open competition, warrants attention. Typically, full and open competitions aim to attract a larger pool of bidders to foster robust price discovery and ensure the government receives the best value. For contracts of this magnitude and nature (security guards and patrol services), one might expect more than two offers, potentially ranging from 3 to 10 or more, depending on market conditions and the specificity of the requirements. A low number of bidders could indicate several factors: a highly specialized requirement that limits the number of qualified contractors, a market dominated by a few large players, or potentially unattractive contract terms or performance periods that deter broader participation. This limited competition could mean less downward pressure on pricing and potentially higher costs for the government compared to a more competitive scenario.

What are the potential risks associated with the Time and Materials (T&M) pricing structure for this contract?

The Time and Materials (T&M) pricing structure for this security services contract presents several potential risks. T&M contracts pay the contractor for direct labor hours at specified hourly rates and for the actual cost of materials and supplies. The primary risk is the potential for cost overruns, as the final cost is not fixed upfront. If the contractor's labor hours are not efficiently managed or if material costs escalate unexpectedly, the total expenditure can exceed initial estimates. This necessitates stringent oversight from the Department of State to monitor labor hours, verify the necessity of materials, and ensure that rates are reasonable. Without robust oversight, T&M contracts can be less cost-effective than fixed-price alternatives, potentially leading to a lower value for taxpayer money. The contractor also has less incentive to control costs compared to fixed-price arrangements.

What is the track record of Security Alliance LLC in performing similar government contracts?

Information regarding the specific track record of Security Alliance LLC in performing similar government contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or claims, and the successful completion of prior contracts of comparable size and scope. For a contract valued at $31.5 million over 7.5 years, the agency would typically conduct thorough due diligence on the contractor's past performance, financial stability, and technical capabilities. Understanding their history with delivering security guard and patrol services, adherence to schedules, quality of service, and cost control on previous government engagements is vital for ensuring mission success and mitigating performance risks associated with this new award.

How does the annual value of this contract compare to the average annual spending on security services across federal agencies?

The annual value of this contract, approximately $4.2 million ($31.5M / 7.5 years), needs to be benchmarked against the average annual spending on security services across federal agencies. Federal spending on security services is substantial, encompassing guard services, physical security systems, and related protective measures. While precise aggregate figures vary, numerous agencies procure these services. The $4.2 million annual spend for the Department of State is significant for a single contract but represents a fraction of the total federal outlay. To assess its comparability, one would look at data from sources like the Office of Management and Budget (OMB) or the General Services Administration (GSA) regarding total federal security spending. This contract's value appears moderate within the context of large federal procurements, but its specific scope and requirements are key determinants of whether its annual cost is aligned with market rates for similar services.

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

Solicitation ID: SAQMMA16R0254

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8323 NW 12TH ST, DORAL, FL, 33126

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,288,176

Exercised Options: $31,496,305

Current Obligation: $31,456,720

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline