SEC370 Contracted Versus Proprietary Security Comparison

Contracted

Contracted Versus Proprietary Security Comparison

Name

SEC370

Date

Professor

Contracted Versus Proprietary Security Comparison

An important budget consideration involves the types of security operation that will be used by the company to prevent loss and intrusion. One important consideration is whether or not the company will employ a contractual security group or have proprietary security department within the organization. The need for a proprietary security department will depend on the size of the organization, sensitivity of information and products, and the funds available to the organization. In this case the organization is a college campus that encompasses a large geographical area and contains a large population of students and staff.

Security Licensing

The security department of the Acme College is responsible for securing the campus, preventing crime, providing security to educational staff and students, and preventing loss of private information both physical and cyber means. Determining the type of security, contracted or proprietary will depend on the needs of the organizations and the licensing laws of the state. In the state of Texas they are the Private Security Program of the Texas Department of Public Safety regulates security licenses for the contractual and proprietary security firms. Texas has the authority to regulate the private security industry and the individual as well as authority over private investigators. This authority originated from Texas Occupations Code Chapter 1702.

The licensing of the security firm or personnel falls under Private Security Act and requires that security company and individuals receive a license to provide security in Texas. Providing or offering to provide a regulated service without a license, or knowingly employing or contracting with an unlicensed company to perform a regulated service, is a Class A misdemeanor (TDPS, 2012). If the security license is for security firms they will need to complete a company license application and pay the necessary fees or apply for complete an individual’s security licensing application and pay necessary fees.

Contract and Proprietary Company Security

In recent years organizations have been leaning more towards the contractual security company over the proprietary security department. One reason is to focus more on the core competencies of the organization instead of spending operational time focusing on securing the industries product, service, or information systems. By focusing on the core competencies the organization they will be better equipped to meet the needs of the consumer and provide a quality product or service. With increased competition and the market becoming more focused on the use of new technologies the company can be distracted from the company’s main goals.

For example Acme College needs to be focused on providing students with a quality education and being competitive in the higher education market not focused on ensuring the college has the necessary security that is required on a college campus on the 21st Century. A contractual security company would provide the experience and necessary skills to ensure the college campus is properly secured. The contractual company can provide the college with the necessary security to prevent the risk of violence on the college campus as well as meet all other security needs of a college campus. The potential challenges associated with the contractual security firm are the potential for ineffective security staff or security staff that engages in illegal activity.

Another reason for the trend towards the use of the contractual security firm is due to the increase cost and liability. Because college campuses are experiencing elevated securing incidents due to increased incidents of college violence the risk for a law suit has increased. Because American society has become more and more litigious, the risk of liability from in house personnel-related issues is steadily increasing (Zalud, 2007). In order to reduce this cost organizations are leaning towards the contractual security firm that would be liable in the event of a violent incident or harm coming to a student or a staff member.

On the other hand the proprietary security department can meet the daily security requirements of the college and the security department would be more familiar with the needs of the college. When there is an in house security staff there is less turnover and students and staff members become familiar with the security personnel. In house security would provide the college with more control over security incidents and what is released to the press as well as ensure hotel administration is made fully aware of all security incidents. In the college environment site knowledge as well as customs and practices are very important. An in house security team would be better aware of these practices.

The potential challenges that can surface with the use of the in house security department are staff members or students could become too familiar with staff creating lapses in security. When the proprietary security firm is faced with dealing with the operational functions of the organization it can distract them from their main goal as well as the in house security department can be more costly that the contractual firm. When security companies are forced to bid on contracts the college can get the lowest price. Another challenge with the in house security department is the added cost of Workers Compensation, unemployment insurance, discrimination training and costs as well as sexual harassment and general liability. Contract security is more flexible and the college will not be concerned with turnover costs.

Cost Analysis

A cost analysis can provide an overview of the costs of employing an in house security team or contracting out for security. One of the most significant considerations for the college is the cost of the security choice. If it is more expensive to choose the in house or contractual security team this will weigh into the decision on what type of security function that will be chosen. Other considerations that will weigh into the decision include operating cost, control, liability and consistency (Strom, 2010). The cost analysis involves a comparison of the cost of funding the in house security team versus the cost of funding contractual security firm. If the firm hires a contract security firm the price that will be paid by the organization is the price agreed upon in the contract.

The college has allotted $720,000 of the budget for security. If the college selects the contract security contract bid comes in under the $720,000 the college will save money on security. If the college determines it is more important to employ an in house security team the types of costs that will need to be considered include first direct labor costs. This includes the salaries that will be paid to the chief security officer and the security staff as well as any overtime costs that eventuate. Additional labor costs for the in house security team would include vacation pay, sick pay, and employee training.

Next Acme College would be responsible for paying for employee insurance, as well as ensuring employees pay payroll taxes such as unemployment, disability, and social security expenses as well as being responsible for paying workers compensation expenses as well as offering the security employee which results in expenses such as medical & dental premiums, life insurance bonuses, and retirement pensions (Allied Security, 2012). The company would also be required for paying liability and property damage insurance premiums and the cost of supplying the security personnel’s uniforms and equipment needed to secure the campus.

Decision and Rationale

After conducting a comparison on the best type of security function for Acme College the most beneficial choice would be the contractual security firm. The contractual security firm would relieve the attention that would be taken away from the core competencies of the organization and instead allow them to focus on providing a quality educational environment for students and staff. The contractual security firm would relieve the additional cost of associated with labor and training costs associated with security personnel.

The organization would have less control over every day security processes but has the option of replacing ineffective security teams through new contracts. The organization will not be responsible for the everyday function of the security department and can focus on other operational aspects. Security guards will not create emotional bonds with students or staff which can result in liability issues or be responsible for covering the expense if security staff member’s engage in behavior that could make the department liable. While there are benefits to both types of security functions the contractual security department would most benefit Acme College. Contract security is cheaper and reduces the risk to the organization.

References

Allied Barton Security Service. (2012). Contracting Sources: Contracting versus Proprietary.

Retrieved June 17, 2012 from

http://www.alliedbarton.pipitonegroup.net/SecurityResourceCenter/ContractingResources/

Strom, K. (2010).The Private Security Industry: A Review of the Definitions, Available Data

Sources, and Paths Moving Forward. Retrieved June 17, 2012 from

https://www.ncjrs.1/bjs/grants/232781.pdf

Texas Department of Public Safety. (2012). General Requirements for Licensing. Retrieved June

17, 2012 from http://www.txdps.state.tx.us/rsd/psb/docs/InstrForOrigCoLicAppl.pdf

Zalud, B. (2007). Enterprise-Wide Alignment Drives Contract or Proprietary Decision. Retrieved

June 17, 2012 from http://www.securitymagazine.com/articles/enterprise-wide-alignment