State Department spent $56.3M on overseas security guards, a contract awarded without competition

Contract Overview

Contract Amount: $56,294,958 ($56.3M)

Contractor: Domestic Awardees (undisclosed)

Awarding Agency: Department of State

Start Date: 2006-07-01

End Date: 2008-06-30

Contract Duration: 730 days

Daily Burn Rate: $77.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: OVERSEAS CONTRACT

Plain-Language Summary

Department of State obligated $56.3 million to DOMESTIC AWARDEES (UNDISCLOSED) for work described as: OVERSEAS CONTRACT Key points: 1. The contract focused on security guard services, a critical function for overseas operations. 2. Awarded without competition, raising questions about potential cost savings and market responsiveness. 3. The contract duration was two years, suggesting a need for ongoing security support. 4. The use of a Time and Materials contract type can lead to cost overruns if not managed carefully. 5. The lack of disclosed domestic awardees makes it difficult to assess the contractor's track record and capacity. 6. The NAICS code 561612 indicates a focus on security guards and patrol services.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of disclosed awardees and the 'not competed' status. Without competitive bids, it's difficult to ascertain if the $56.3 million price tag represents fair market value. The Time and Materials pricing structure, while flexible, can be prone to higher costs compared to fixed-price contracts if not rigorously monitored for efficiency and necessity of labor hours. The absence of specific performance metrics or comparisons makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach bypasses the standard procurement process where multiple vendors submit bids, which typically drives down prices and encourages innovation. The rationale for a sole-source award is often based on specific circumstances, such as the urgency of the need or the unique capabilities of a single provider. However, it limits the government's ability to explore a wider range of options and potentially secure better pricing.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefit of competitive bidding, which usually results in lower prices, is lost. It also reduces transparency in the procurement process.

Public Impact

U.S. diplomatic missions and personnel overseas benefit from enhanced security. The contract provides essential security guard and patrol services to protect government assets and personnel abroad. The geographic impact is global, covering overseas locations where U.S. diplomatic presence requires security. The contract supports the employment of security personnel, likely including both U.S. citizens and local nationals in overseas locations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to inflated costs for taxpayers.
Time and Materials contract type poses a risk of cost overruns without strict oversight.
Undisclosed domestic awardees make it difficult to assess contractor responsibility and past performance.
Limited transparency in the procurement process due to sole-source award.

Positive Signals

Ensures critical security services are provided to protect U.S. interests abroad.
Contract duration of two years indicates a stable security solution was established.
The contract addresses a fundamental need for physical security in potentially high-risk environments.

Sector Analysis

The security and guard services sector is a significant part of the broader professional, scientific, and technical services industry. This contract falls under the Security Guards and Patrol Services category (NAICS 561612). The market for these services is substantial, driven by the need for physical security across various sectors, including government facilities, commercial properties, and critical infrastructure. Government contracts for security services often represent a large portion of this market, with agencies like the Department of State having a consistent need for such services, particularly in overseas locations.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting goals. As a sole-source award, it is less likely to have been structured to specifically benefit small businesses through set-asides. Further investigation would be needed to determine if any subcontracting opportunities were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting officer and program managers within the Department of State. Given the sole-source nature and the overseas deployment of services, robust oversight would be crucial to manage costs, ensure service quality, and verify performance against contract requirements. Transparency is limited by the lack of disclosed awardee information and competitive bidding. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of State Diplomatic Security Service
Overseas Security Operations
Physical Security Services Contracts
Government Security Guard Contracts

Risk Flags

Sole-source award
Time and Materials contract type
Undisclosed awardee
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $56.3 million to DOMESTIC AWARDEES (UNDISCLOSED). OVERSEAS CONTRACT

Who is the contractor on this award?

The obligated recipient is DOMESTIC AWARDEES (UNDISCLOSED).

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $56.3 million.

What is the period of performance?

Start: 2006-07-01. End: 2008-06-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. However, the specific justification for this determination is not included in the abbreviated data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required services, there is an urgent need, or the contract is a follow-on to a previously competed contract where it's not practical to compete again. Without the official justification document, the precise reason remains unknown from this dataset.

Can the value of this contract be benchmarked against similar security contracts?

Benchmarking this $56.3 million contract is difficult without more specific information. The data identifies the service as 'Security Guards and Patrol Services' (NAICS 561612) for overseas operations. However, the exact scope of services, geographic locations, required security levels, and contract duration (730 days) are crucial for a meaningful comparison. Furthermore, the 'not competed' status means there were no competing bids to establish a market price. To benchmark effectively, one would need to compare it to other government contracts for similar overseas security services, considering factors like the number of guards, hours of service, and specific security requirements, which are not detailed here.

What are the potential risks associated with a Time and Materials contract for security services?

Time and Materials (T&M) contracts, like the one used here, carry inherent risks, primarily related to cost control. In a T&M contract, the government pays the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. The primary risk is that the contractor may not have a strong incentive to control labor hours or material costs, potentially leading to cost overruns if not meticulously monitored. For security services, this could mean extended hours, unnecessary personnel deployment, or inflated material costs. Effective oversight, detailed reporting, and clear task definitions are essential to mitigate these risks and ensure value for money.

What does the 'DOMESTIC AWARDEES (UNDISCLOSED)' status imply for accountability?

The 'DOMESTIC AWARDEES (UNDISCLOSED)' status is highly problematic for accountability and transparency. It prevents the public, and potentially other oversight bodies, from knowing which specific company or companies were awarded this significant contract. This lack of disclosure hinders the ability to assess the contractor's track record, financial stability, and past performance, which are critical factors in responsible contracting. It also makes it difficult to hold the awardee accountable for performance issues or to verify compliance with contract terms and conditions. Ideally, awardee information should be publicly available to ensure a basic level of transparency.

How does the duration of this contract (730 days) impact its overall value and risk?

A contract duration of 730 days (two years) suggests a need for sustained, ongoing security services rather than a short-term or project-specific requirement. For the government, a longer duration can offer stability and reduce the administrative burden associated with frequent re-procurement. However, it also means a longer commitment to a specific vendor, especially in a sole-source scenario. The risk associated with the duration is amplified by the T&M contract type; a two-year T&M contract without stringent oversight could lead to significantly higher costs over its lifespan compared to a fixed-price contract or a shorter duration. Conversely, if well-managed, it provides consistent security coverage.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1800 F ST NW, WASHINGTON, DC, 20405

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $121,400,516

Exercised Options: $121,400,143

Current Obligation: $56,294,958

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline