On a typical day from the headquarters of C&D Security in Colorado Springs, nearly 700 security guards will be dispatched to keep a watchful eye on some of America’s most high-value targets.
The guards will screen thousands of employees and visitors through the X-ray and magnetometers at the Internal Revenue Service headquarters in Washington D.C.; they will patrol the parking lots of federal buildings in nine states; and they’ll keep to themselves whatever they have heard these past few weeks about the scandal at the General Services Administration headquarters, where they have been employed for several years.
The security guard business ebbs and flows, but has not gone the way of the dinosaur as predicted back in the dot-com era when fancy surveillance cameras and alarms became the building security norm, said Troy Thames, C&D Security executive vice president.
“Instead of a guy in the front lobby, walking the perimeter, now he’s in a control center watching a camera,” Thames said. “If the alarm goes off, someone still has to see what set it off.”
And so is the reason for C&D Security’s long-term business life in the security guard business — a company with $40 million in annual revenue and a contender for some of the largest federal government security contracts.
“Right now, government security is one of the few growth industries,” Thames said.
Since 9/11, the federal government has spent an estimated $360 billion on homeland security. C&D Security is only too happy to accommodate, Thames said. In February, C&D was awarded an $85 million, five-year contract to provide security guards and roving armed security at dozens of high-profile buildings in Philadelphia. And the requests for proposals don’t stop there, Thames said.
“I have over 30 major proposals out right now,” Thames said.
The company’s main mission has always been security services. C&D started in 1959 as a security and ambulance service. In the 1960s, two couples, the Creamers and the Derringtons, bought the business and named it C&D Bonded Security. Back then, they were providing uniformed security guards for Colorado Springs manufacturers and construction sites. They even had a K-9 unit. It was a good gig and the company grew.
In the 1970s, the Derringtons bought out the Creamers and in 1991, Peter Derrington bought the company from his parents and took over as president, joined by his wife Debbie as vice president. C&D was 200 employees strong, but still only doing business in Colorado.
The Derringtons and Thames hold top secret security clearances and started contracting with the Air Force bases. Their firm provided security for Schriever Air Force Base when it was under construction “just a hole in the ground,” Thames said.
But, relying on local businesses was limiting and the company wasn’t growing. Setbacks, like when Apple moved its laptop production out of the Springs in the 1990s, cost them jobs, Thames said.
“You either grow, or you shrink,” Thames said.
In 1993, the company landed its first out of state contract in Kentucky, guarding an IRS building. Expansion into other states means state business licenses and gun licenses, but that IRS contract led to more lucrative government contracts. And, in the wake of the 9/11 attacks, C&D was poised to take on the tidal wave of government security contracts as everyone from private business to government scrambled to pump up security. Since 9/11, C&D’s annual revenue has gone from $13 million in 2006 to $40 million in 2011.
“We were working at the defense finance buildings in Denver,” Thames said. “Pre 9/11 we had 15 guards there; two weeks after 9/11 we had 55.”
In a 2011 interview with Security Sales and Integration Sales Magazine, GSA Schedules Inc. president Lyne de Seve said that pre-9/11, the GSA contract for security was very small.
“Even going back to 1996, it was probably about $16 million and most of those sales were from ADT,” she said. “Today it is more than $2 billion.”
That means lots of competition. C&D bid against 29 other firms for the Philadelphia contract. But that does not mean its easy work, Thames said. The Department of Homeland Security’s Federal Protective Services requires guards to have a minimum of three years in law enforcement or military experience and 150 hours of training before they even step foot in a federal building as an armed guard.
That comes with risk, Thames said. C&D will spend $500,000 to train and equip the new guards for the Philadelphia contract.
“The first year there is a lot of upfront costs, radios, vehicles, cell phones, guns, ammo — in that first year, the goal is to try to break even,” Thames said. “Then, if you can control costs, you can make money in years three, four and five.”
It’s a business that takes an understanding banker, he said, as some times they operate in the red when gearing up for big contracts.
“We’ve got to continue to grow,” Thames said. “I’ve got a bid in Georgia, if we get it, we would add 430 people.”