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NAICS NewsletterMay 11, 2007

NAICS 561621

Security Systems Services

Government Contract and Procurement Analysis Report

Report Summary

This report, offered by epipeline, contains a brief analysis of the Federal government's procurement practices with regards to purchasing the services of Security Systems Services.


You will find information on the top federal government agencies that purchase these services, as well as their procurement strategy (i.e. full and open competition, set-asides and more). Finally, there is a review of the top companies that are awarded federal government contracts for Security Systems Services.


To get a more comprehensive analysis and learn more about how epipeline can help you identify current and future bid opportunities, register for a live Demo.

This report takes an in-depth look at the 'Security Systems Services (except Locksmiths)' industry, NAICS 561621. To understand the future, one must study the past. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enables you to develop the best positioning and strategy for your company to more effectively compete for government contracts. The following graph illustrates one such perspective: the top Government departments buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY03 through FY06 for NAICS 561621

WHAT IS NAICS 561621?

NAICS 561621 represents companies that sell, install, repair and/or monitor security alarm systems, such as burglar and fire alarms. This also includes remote monitoring of electronic security alarm systems. It does not include locksmith services. This NAICS was previously represented by Standard Industrial Classification (SIC) code 7382. This code covered a wide variety of topics, as listed below:

  • Alarm system monitoring services
  • Alarm systems sales combined with installation, repair, or monitoring services
  • Burglar alarm monitoring services
  • Burglar alarm sales combined with installation, repair, or monitoring services
  • Fire alarm monitoring services
  • Fire alarm sales combined with installation, repair, or monitoring services
  • Security alarm systems sales combined with installation, repair, or monitoring services
  • Security system monitoring services

The size standard associated with NAICS 561621 is $11.5 Million (effective July 31, 2006), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross revenue does not exceed $11.5 Million for the past three years.

Total reported spending under NAICS 561621 in FY03 was over $277 Million. FY04 saw an increase, to over $295 Million. Spending for FY05 and FY06 are not as widely reported as the previous fiscal years, so those values are lower ($187 Million for FY05 and $66 Million for FY06). This does not necessarily mean those years saw decreased spending, rather, it indicates that many agencies have not reported all of their contract data to the FPDS yet. These numbers may increase as more departments and agencies report their contract spending.

WHO ISSUES THE CONTRACTS?

The Department of Defense (DoD) was the largest buyer for these services for the last four fiscal years (FY03 through FY06), with over $470 Million in contract spending, comprising over 57% of the market share for NAICS 561621. This value may include all components of the Defense Department (Army, Navy, Air Force, DLA, etc.), however, FY05 and FY06 contract dollars have not been as widely reported yet (at least as far as FPDS data). The Department of State was a distant second, with just under $146 Million over the same period. The Department of Homeland Security (DHS) was less than half that number, with just over $60 Million and 7% of the market share. The Department of Interior (DOI) and the General Services Administration (GSA) rounded out the top five.

Top 10 Federal Agencies by % of Total Market FY03 through FY06 for NAICS 561621

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 3,910 companies registered under NAICS 561621 (source: active registrants, www.ccr.gov as of 05/01/2007). Of this number, 3,148 qualify as small businesses. The two charts below identify the top 10 Companies, by market share, for the period of FY03 through FY06. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the following acquisition strategies:

  • 8(a) Competed
  • 8(a) Small Disadvantaged (SDB) set-aside
  • 8(a) sole-source
  • SDB set-aside
  • SDB, 8(a) with HUBZone
  • Combination HUBZone and 8(a)
  • HUBZone set-aside
  • HUBZone sole-source
  • Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside
  • SDVOSB sole-source
  • Emerging Small Business set-aside
  • Very Small Business set-aside
  • Reserved for Small Businesses ($2501 to $100,000)
  • Total Small Business set-aside

EMBSEC LLC holds the top spot on the unrestricted competition list, with over $85 Million in total contract dollars for FY03 through FY06 - over 13% of the market share. The next two contractors on the list, Johnson Controls Inc, and Adesta LLC both have total contract values over $50 Million for the same period, at $60 Million and $53 Million, respectively. The remaining seven firms on the list, along with four companies all have total contract spending over $10 Million. Wackenhut appears twice in the top ten, at the fifth and ninth positions. These multiple listings represent the individual companies (or "doing business as - dba") within their Parent corporation. Other divisions may be listed more times outside the top ten, based on the contract spending levels for the FY03 through FY06 period.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 561621 Contractors by % of Total Market for FY03 through FY06 - Unrestricted

The combined contract spending for contracts awarded under "restricted competition" totaled over $93 Million for FY03 through FY06. EMBSEC LLC, takes top honors again, by a large margin, on the restricted chart, with over 27% of the restricted contract spending, which equates to over $25 Million. Ares Group, which holds the tenth spot on the unrestricted chart, holds the second spot here. Their 10% of the market share represents just under $10 Million in reported contract spending for the period of FY03 through FY06 under NAICS 561621. Trofholz Technologies Inc., is the only other firm on this list with a contract spending total over $5 Million. The remaining seven companies, along with an additional seven firms all have total contract spending of at least $1 Million for this timeframe.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 561621 Contractors by % of Total Market for FY05 through FY06 - RESTRICTED Competition

HOW ARE THESE CONTRACTS PROCURED?

Over half of the contract dollars spend during the FY03 through FY06 timeframe did not report their acquisition strategy. This could include contracts awarded using full and open competition, small business set-aside, or any manner of restriction. This accounted for 53% of the market share - over $435 Million in contract dollars.

Full and Open (unrestricted) competition held 35% of the market share, equating to over $288 Million. Businesses of any size and type can compete for these contracts. By comparison, the combined reported contract dollar totals for this period for all other acquisition strategies was just 12%. The breakout of the combined acquisition strategies segment is described in the second pie chart below.

Acquisition Breakout under NAICS 561621 - FY03 through FY06

Over half of contract dollars (from the 'All Other Strategies' described in the chart above) were sole sourced to 8(a) firms (this may include those sole sourced to Alaska Native Corporations). This represented over $50 Million in reported contract spending over the FY03-FY06 period. Almost 30% of the market share was set-aside for small businesses, or about $30 Million. Another $16 Million in contract spending for this time period was awarded to 8(a) firms through competitive acquisitions. The remaining acquisition strategies all reported less than $1 Million under NAICS 561621 during this same timeframe.

Acquisition Breakout Other than Free and Open under NAICS 561621 - FY03 through FY06
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