Ares Group Inc. secured $15.9M in security guard services from Treasury's IRS, awarded via full and open competition

Contract Overview

Contract Amount: $15,899,449 ($15.9M)

Contractor: Ares Group Incorporated

Awarding Agency: Department of the Treasury

Start Date: 2006-01-12

End Date: 2011-03-31

Contract Duration: 1,904 days

Daily Burn Rate: $8.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SECURITY GUARD SERVICE

Place of Performance

Location: FRESNO, FRESNO County, CALIFORNIA, 93727

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $15.9 million to ARES GROUP INCORPORATED for work described as: SECURITY GUARD SERVICE Key points: 1. Value for money appears reasonable given the contract duration and scope. 2. Competition dynamics indicate a robust bidding process, likely driving competitive pricing. 3. Risk indicators are low, with a firm fixed-price contract and established contractor. 4. Performance context suggests a long-term need for security services at the IRS. 5. Sector positioning places this contract within the broader government security services market.

Value Assessment

Rating: good

The contract value of $15.9M over approximately 5 years (1904 days) suggests an average annual spend of around $3.18M. Benchmarking against similar federal contracts for security guard services indicates this is within a reasonable range, considering the scope and duration. The firm fixed-price nature of the contract helps control costs and provides predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', indicating that while sources were initially excluded, the final award was made through a competitive process open to all eligible bidders. With 11 bids received, the level of competition was substantial, suggesting that multiple firms were interested and capable of providing the required services. This high number of bidders generally leads to better price discovery and more favorable terms for the government.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are being used efficiently, as multiple companies vied to offer the best price and service. This competitive environment helps prevent overpayment and encourages contractors to be cost-conscious.

Public Impact

Federal employees and government facilities at the Internal Revenue Service benefit from enhanced security. Essential security guard services are delivered to protect sensitive information and assets. The geographic impact is primarily within California, where the contract was performed. The contract supports jobs within the security services industry, contributing to the local workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor performance issues over a long contract duration.
Reliance on a single contractor for critical security functions.

Positive Signals

Firm fixed-price contract limits cost overruns.
High number of bids suggests strong market interest and potential for quality service.
Contractor has a track record with the government, implying some level of familiarity and established processes.

Sector Analysis

This contract falls within the security and protective services sector, a significant area of government spending. The North American Industry Classification System (NAICS) code 561612 for Security Guards and Patrol Services represents a market focused on providing personnel for guarding property and preventing theft and disorder. Government spending in this sector is consistent across various agencies requiring physical security for facilities and personnel.

Small Business Impact

The contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

The firm fixed-price contract structure provides a degree of cost control. Oversight would typically be managed by the contracting officer and contract specialists within the IRS, ensuring adherence to the contract terms and performance standards. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics are not publicly disclosed.

Related Government Programs

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

Risk Flags

Long contract duration may increase risk of performance degradation.
Reliance on a single contractor for critical security functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $15.9 million to ARES GROUP INCORPORATED. SECURITY GUARD SERVICE

Who is the contractor on this award?

The obligated recipient is ARES GROUP INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $15.9 million.

What is the period of performance?

Start: 2006-01-12. End: 2011-03-31.

What is the historical spending trend for security guard services by the IRS?

Analyzing historical IRS spending on security guard services requires access to detailed procurement data beyond this single contract. However, general trends in federal spending on security services indicate a consistent and often increasing demand, driven by evolving security threats and the need to protect federal assets and personnel. The IRS, managing sensitive taxpayer information and significant financial operations, would likely maintain a steady requirement for robust security. Comparing this $15.9M contract over its ~5-year duration to previous IRS contracts for similar services would reveal if spending has increased, decreased, or remained stable. Factors like changes in facility needs, security protocols, and the number of personnel requiring protection would influence these trends.

How does the per-unit cost of this contract compare to industry benchmarks for security guards?

Determining a precise per-unit cost requires more granular data on the number of guards, hours worked, and specific service levels. However, we can estimate an average daily cost per guard if we assume a certain number of guards and hours. Given the total contract value of $15.9M over 1904 days, the average daily cost is approximately $8,351. If we assume, for example, 20 guards working 8-hour shifts, the average hourly rate would be around $20.88. This rate is competitive within the federal contracting space for security guards, especially considering overhead, benefits, and profit margins. However, without knowing the exact number of guards and their specific duties, a definitive comparison to industry benchmarks is challenging. Federal contracts often include specific requirements that can influence pricing compared to purely commercial contracts.

What is Ares Group Incorporated's track record with federal contracts, particularly in security services?

Ares Group Incorporated has a history of performing federal contracts, as evidenced by this award. To fully assess their track record, a deeper dive into their contract history with agencies like the Department of the Treasury and others would be necessary. This would involve examining past performance evaluations, any contract disputes or terminations, and the types and values of contracts they have successfully managed. Their ability to win a 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' contract with 11 bidders suggests a demonstrated capability and a competitive standing within the security services market. Further analysis would confirm their experience in delivering similar security guard services across different government entities and their overall reliability as a federal contractor.

What are the key performance indicators (KPIs) used to measure the success of this security guard service contract?

Key performance indicators for a security guard service contract typically focus on the effectiveness and reliability of the guards and the overall security posture. Common KPIs include response times to incidents, adherence to post orders, guard attendance and punctuality, incident reporting accuracy and timeliness, and the absence of security breaches or unauthorized access. For this specific contract with the IRS, KPIs would likely be tailored to protect sensitive government facilities and information. Performance would be monitored through regular reports, site inspections, and feedback from IRS personnel. Failure to meet these KPIs could result in corrective actions or penalties, as stipulated in the contract.

Are there any specific risks associated with relying on Ares Group Incorporated for these security services?

The primary risks associated with relying on any single contractor for critical services like security include potential performance degradation over time, financial instability of the contractor, or unforeseen events impacting their ability to deliver. For Ares Group Incorporated, a thorough risk assessment would involve reviewing their financial health, their history of compliance with labor laws and security regulations, and their capacity to scale services if needed. Given this is a firm fixed-price contract, there's also a risk that the contractor might cut corners on quality to maintain profitability if not adequately overseen. However, the competitive nature of the award and the established oversight mechanisms within the IRS are intended to mitigate these risks.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8625C ENGLESIDE OFFICE PA, ALEXANDRIA, VA, 08

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $15,899,449

Exercised Options: $15,899,449

Current Obligation: $15,899,449

Contract Characteristics

Cost or Pricing Data: NO

Timeline