The U.S. Contract Security Guard Industry: an Introduction to Services and Firms

The U.S. Contract Security Guard Industry: an Introduction to Services and Firms

Order Code RL32523
CRS Report for Congress
Received through the CRS Web
The U.S. Contract Security Guard
Industry: an Introduction to
Services and Firms
August 13, 2004
-name redacted-
Specialist in Science and Technology
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

The U.S. Contract Security Guard Industry:
an Introduction to Services and Firms
Summary
Private security guards have long supplemented public law enforcement in the
United States; however they face new requirements since the terror attacks of
September 11, 2001. The 9/11 Commission report has noted: “homeland security
and national preparedness ... often begins with the private sector.” The use of
contract guards for public security raises policy issues related to capabilities,
oversight, and cost-effectiveness. To assist Congress in addressing these issues, this
report provides background information concerning the contract guard industry.
According to the Bureau of Labor Statistics (BLS), in 2003 there were
approximately 960,000 private security guards employed in the United States —
compared to 650,000 U.S. police officers working that year. Security guard
employment in the United States declined over the last five years, notwithstanding
the nation’s heightened terrorism concerns since 2001. Overall, the number of
private guards fell by approximately 124,000 (11%) between 1999 and 2003, while
the number of police increased by approximately 34,000 (6%) during the same
period. According to the BLS, approximately 533,000, or 55%, of private security
guards in the United States were employed by contract guard companies in 2003.
According to the BLS, contract guards earned average salaries below $19,400
per year in 2003, less than half the average salary for police. Many contract guard
companies have no specific educational requirements, although they prefer high
school graduation or equivalent certification for armed employees. Most states
require guards to be licensed by the state, which typically requires a guard to be over
18 years old, pass background and drug checks, and complete classroom training in
property rights, emergency procedures, and criminal detention. The amount of
additional training guards receive depends upon their assignments.
Contract guard services is one of the largest segments of the broader security
industry, with U.S. revenues of approximately $11 billion in 2003. The contract
guard industry is somewhat fragmented, however, with several large national
companies and thousands of smaller regional and local companies. The four largest
contractors in the United States, Securitas, Wackenhut, Allied/Barton, and Akal
Security, collectively account for 50% of industry revenues and 35% of contract
employees. The two largest contractors are foreign-owned.
In its terrorism alert of August 1, 2004, the Department of Homeland Security
(DHS) revealed that surveillance by terrorists included the deployment, armament,
and activity of private guards at key financial institutions. This alert demonstrated
that, in addition to their traditional roles, private security guards could be the first line
of defense against future terrorist attacks in the United States.
This report will not be updated.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Contract Guarding in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Employment Trends for Guards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Pay, Qualifications and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Union Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Major U.S. Contract Guard Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Securitas Security Services USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Wackenhut Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Allied / Barton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Akal Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Appendix:
References for Contractor Operating Statistics . . . . . . . . . . . . . . . . . . . . . . . 8
List of Figures
Figure 1: Total U.S. Police and Private Guards . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2: Average Annual Salaries for U.S. Occupations, 2003 . . . . . . . . . . . . . . 4
List of Tables
Table 1: U.S. Private Guard Contractor Key Operating Statistics 2003 . . . . . . . . 5

The U.S. Contract Security Guard Industry:
an Introduction to Services and Firms
Introduction
The United States depends heavily upon private guards to meet its public
security needs. According to the Bureau of Labor Statistics (BLS), there were
approximately 960,000 private security guards employed in the United States in 2003
— compared to 650,000 U.S. police officers working that year.1 While private
guards have long supplemented public law enforcement, they face new requirements
and greater scrutiny since the terror attacks of September 11, 2001. As the 9/11
Commission report noted, “homeland security and national preparedness . . . . often
begins with the private sector.”2
According to the BLS, in 2003 approximately 533,000, or 55%, of private
security guards in the United States were employed by contract guard companies.3
The remaining non-contract (“staff”) guards are employed directly by
institutions—especially schools, hospitals, restaurants, taverns, hotels, department
stores, manufacturing firms, real estate management firms, and governments.
Although this report focuses on contract guards, both contract and staff guards have
similar responsibilities and face similar challenges.
The use of contract guards for public security may raise policy issues related to
training and conduct; accountability; foreign control; and cost-effectiveness. This
report provides background information concerning the nature of contract guard
services and the workforce that provides them. It characterizes those services, and
profiles the major guard contractors currently operating in the United States.
1 Bureau of Labor Statistics (BLS). “National employment and wage data from the
Occupational Employment Statistics survey by occupation, May 2003.” Table 1. and U.S.
Census Bureau. Statistics of U.S. Businesses: 2001. “Armored car services.” Note that
“security guards” includes approximately 32,000 armored transport guards and excludes
private investigation, private corrections, airport screening, and gaming surveillance
workers. “Police” includes bailiffs, fish and game wardens, parking enforcement workers,
police and sheriff’s patrol officers, and transit and railroad police.
2 9/11 Commission. Final Report of the National Commission on Terrorist Attacks Upon the
United States. U.S. Government Printing Office. July 22, 2004. P 398.
3 Bureau of Labor Statistics (BLS). Occupational Employment and Wages, May 2003. Table
33–9032. “Security guards.” 2003.

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Contract Guarding in the United States
Contract guards generally monitor, patrol, and inspect property to protect against
fire, theft, vandalism, and other illegal activity. They may enforce laws on their
employer’s property, conduct incident interviews, prepare incident reports, and
provide legal testimony. Guards may work at one location, or may patrol among
multiple locations to conduct security checks. Contract guards typically use radios
and telephones to call for assistance from police, fire, or other emergency services
as required. They may be armed.
Specific contract guard responsibilities vary depending upon the nature of the
employer. In retail stores, for example, guards protect customers, records,
merchandise, money, and equipment. They may work with store detectives to prevent
merchandise losses and apprehend shoplifting suspects before police arrive. By
comparison, guards in factories, laboratories, or government buildings may protect
information, products, computer codes, and government secrets. They may also
check the credentials of individuals and vehicles entering and leaving the premises.4
Since September 11, 2001, contract guards are increasingly viewed by many as
a first line of protection against possible terrorist attacks. Many contend that they are
particularly important in protecting critical infrastructure, since 85% of U.S. critical
infrastructure and key assets are privately owned and operated.5 Security guards are
viewed by many as a necessary supplement to public law enforcement agencies
which deal with limited resources and broad responsibilities.6 This increased counter
terrorism role for security guards has become apparent in private sector security
plans. In the refinery industry, for example, security guidelines during a Department
of Homeland Security (DHS) “orange” alert call for engaging a “trained and
knowledgeable” security workforce, increasing patrols, inspecting vehicles, and other
security activities that may rely on contract guards.7
Employment Trends for Guards
Security guard employment in the United States declined over the last five years,
notwithstanding the nation’s heightened terrorism concerns since 2001. Figure 1
shows total police and private security guard employment from 1999 to 2003. As the
figure shows, the number of private guards fell by approximately 124,000 (11%)
between 1999 and 2003, while the number of police increased by approximately
34,000 (6%) during the same period.
4 BLS. Occupational Outlook Handbook 2004-05 Edition. “Security Guards and Gaming
Surveillance Officers.” 2004.
5 Office of the President. The Physical Protection of Critical Infrastructure and Key Assets.
Washington, DC. February, 2003. P.8.
6 Walker, Don W., Chairman, Securitas Security Services USA, Inc. Testimony before the
House Judiciary Committee; Crime, Terrorism, and Homeland Security Subcommittee.
Washington, DC. March 30, 2004.
7 American Petroleum Institute (API). Security Guidance for the Petroleum Industry. 1st
Edition. Washington, DC. March 2002. P.21.

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Figure 1: Total U.S. Police and Private Guards
1,200
1,000
00s)
,0
800
1
600
yees (
400
lo
p
m
200
E
-
1999
2000
2001
2002
2003
Police
Private Guards
Source: Bureau of Labor Statistics (BLS). National Occupational Employment and Wage Estimates
(1999-2003). “Protective Service Occupations.” Published annually, 2000-2004.
Total employment figures for contract guards, specifically, are not readily
available prior to 2003. Industry reports indicate, however, that contract guarding
firms overall have not been experiencing a sustained increase in U.S. guarding
requirements. As one major guard contractor noted in a recent investor publication,
“Following September 11, 2001, there was a sharp increase in demand for
security, particularly in the USA . . . . Most of this additional demand has proved
to be short-term. . . . Total market growth in 2003 was around zero percent.”8
According to the BLS, over 14% of all security guards work part-time. A
significant number of part-time guards are off-duty police officers supplementing
their incomes.9 The number of part-time employees is higher among contract guards
than among staff guards. According to a 2002 survey of major contractors, 20% to
30% of contract guards worked part-time.10 Security guard employers also
experience high employee turnover. A recent labor union report estimated that 35%
of security guards had been working as guards for less than one year.11
Pay, Qualifications and Training
Security guards are relatively low paid workers. As Figure 2 shows, contract
guard salaries averaged below $19,400 per year in 2003, less than half of the average
salary for police and well below the average U.S. salary for all occupations. Staff
guards earned nearly 25% more than contract guards in 2003, but still over $20,000
less than police officers.
8 Securitas, Inc. “The Security Industry - The Security Market.” Company Web page.
[http://www.securitasgroup.com]. 2004.
9 BLS. Occupational Outlook Handbook 2004-05 Edition. “Security Guards and Gaming
Surveillance Officers.” 2004.
10 Security Magazine. “Security’s Top Guarding Companies.” January, 2004.
11 Service Employees International Union (SEIU). “Building a Security Workforce for the
New Security Environment.” Washington, DC. 2002. P.3.

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Figure 2: Average Annual Salaries for U.S. Occupations, 2003
Source: Bureau of Labor Statistics (BLS). May 2003 National Occupational Employment and Wage
Estimates. “All Occupations” and “Protective Service Occupations.” 2004.
According to the BLS, many contract guard companies have no specific
educational requirements, although they prefer high school graduation or equivalent
certification for armed employees. Most states require guards to be licensed, which
typically requires a guard to be over 18 years old, pass background and drug checks,
and complete classroom training in property rights, emergency procedures, and
criminal detention. Armed guards must be licensed by appropriate government
authorities and may receive special police certification allowing them to make some
types of arrests. The amount of additional training guards receive depends upon their
assignments. Nuclear power plant guards, for example, are required to receive
several months of training in areas such as firearms, first aid, alarms, and electronic
security systems.12
Union Membership
Labor unions represent a significant number of security guards, although there
are no published statistics detailing overall union membership. Three of the largest
guard unions are Service Employees International Union, AFL/CIO (SEIU), which
claims over 50,000 guards; Security, Police and Fire Professionals of America
(SPFPA), which claims over 20,000 guards; and United Government Security
Officers of America (UGSOA), which claims 8,000 guards.13 (These membership
estimates may include law enforcement and corrections employees.) In recent years
there has been competition and conflict among the SEIU, SPFPA, and UGSOA,
including local union defections and legal action, so their membership levels have
fluctuated.14 In addition to the nationwide unions, there are many smaller
12 BLS. Occupational Outlook Handbook 2004-05 Edition. “Security Guards and Gaming
Surveillance Officers.” 2004.
13 Service Employees International Union (SEIU) Local 82. Web page.
[http://www.seiu82.org/security/index.cfm]. (Includes Canada); Security, Police and Fire
Professionals of America (SPFPA). “SPFPA Leads Battle to Protect Security Unions and
Members!” Press release. July 25, 2003; and, United Government Security Officers of
America (UGSOA). Web page. [http://www.ugsoa.com]. 2004.
14 Gallagher, John. “GM, Delphi Security Guards’ Union Could Face Labor Turf War.”
(continued...)

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independent unions, such as the International Guards Union of America (IGUA) and
the Minnesota Court Security Officers Association (MCSOA) representing
subsegments of the contract guard population.
Major U.S. Contract Guard Companies
As a business, contract guard services is one of the largest segments of the
broader security industry in the United States; its revenues of approximately $11
billion accounted for 30% of total security industry revenues in 2003.15 Contract
guarding is a somewhat fragmented industry, however, with several large national
companies and thousands of smaller regional and local companies.16 Table 1
summarizes 2003 operating statistics for the largest U.S. guard contractors. As Table
1 shows, the four largest contractors account for 50% of industry revenues and 35%
of contract employees. These four contractors are listed among the companies
profiled below.
Table 1: U.S. Private Guard Contractor Key Operating Statistics 2003
Revenues
Market Share
Employees
Owner
Company (Parent)
($ million)
(%)
(1,000)
Country
Securitas U.S.A. (Securitas)
2,608
23.7
100
Sweden
Wackenhut (Group 4 Securicor)*
1,489
13.5
38
U.K
Allied / Barton
900
8.2
36
U.S.
Akal Security*
500
4.5
8
U.S.
Guardsmark
465
4.2
18
U.S.
TransNational Security Grp.
386
4.0
15
U.S.
U.S. Security Associates
375
3.5
17
U.S.
Initial (Rentokil-Initial)*
293
3.4
14
U.K.
ABM Security Services
250
2.7
12
U.S.
Cognisa (Group 4 Securicor)
146
1.3
6
U.K.
Other Guard Contractors
3,610
32.8
258
U.S.
U.S. Total
11,022
100.0
522
--
* Statistics include North American guard operations outside the United States.
Sources: Regulatory filings, annual reports, Web pages, press reports (see Appendix for details).
Financial reporting period may vary by company due to differing accounting practices.
14 (...continued)
Detroit Free Press. Nov. 2, 2002.
15 Freedonia Group, Inc. Private Security Services. Study # 1773. Marketing materials.
Cleveland, OH. March, 2004. P.1. Guarding revenues adjusted by CRS to exclude
corrections services based on reported revenues of major U.S. corrections contractors.
16 U.S. Census Bureau. Statistics of U.S. Businesses:2001. “Security guards & patrol
services.” 2004.

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Securitas Security Services USA. Securitas Security Services USA
(Securitas USA) is the U.S. subsidiary of the Swedish company Securitas AB, the
world’s second largest security services provider. In addition to its U.S. guarding
business, Securitas AB provides guarding, alarm systems and cash handling services
to more than 20 countries, primarily in Europe and the Americas. The U.S. guard
business operates nationwide from 650 branch offices and serves a wide range of
customers including government agencies and energy companies.17 Securitas USA
established its leading U.S. guard market position by acquiring Pinkerton’s in 1999
and Burns International Services in 2000, as well as other, smaller guard
contractors.18
Wackenhut Corp. Wackenhut is a U.S. subsidiary of the U.K.-based Group
4 Securicor. This is the world’s largest security company providing manned security,
security systems, cash management and corrections services in 100 countries
worldwide.19 Wackenhut’s U.S. security services include contract security guards,
investigations, background checks, emergency protection, and security audits and
assessments. Other U.S. services include facility operations and management, fire
suppression and prevention, and airport crash fire and rescue. Wackenhut provides
nationwide services with offices throughout the United States. The company
provides contract guard services to “major corporations, government agencies, and
a wide range of industrial and commercial customers.”20 The company is reportedly
the largest U.S. nuclear security provider in the country, with guards at 30 of the
nation’s 103 nuclear power plants and 7 Department of Energy facilities.21
Wackenhut’s sister subsidiary, Cognisa Security, Inc., (formerly known as
Argenbright Security) was responsible for screening passengers on two of the flights
in the September 11 terror attacks. Cognisa exited the airport screening business
when that activity was federalized. The company currently “provides security
officers, concierge attendants, valet services and shuttle bus transportation at
businesses, colleges, airports and office parks.”22
Allied / Barton. Upon completion of their merger in 2004, Allied Security and
Barton Protective Services will be the largest contract guard company based in the
United States. The companies have served 100 of the nation’s largest companies,
specializing in office buildings, corporate complexes, high-tech facilities, regional
17 Securitas AB. Annual Report 2003. March, 22, 2004. P.3.
18 Security Director’s Report. “What Does Industry Consolidation Mean for Your
Company?” August, 2004. P.6.
19 Group 4 Securicor. “Group 4 Securicor First Day of Dealings.” Company press release.
London, England. July 20, 2004.
2 0 W a c k e n h u t C o r p . “ A b o u t W a c k e n h u t . ” C o m p a n y w e b s i t e .
[http://www.wackenhut.com/object.php?obj=b000c].
21 Rose, T.J. “Private Security Protects Sensitive Sites.” United Press Int. April 9, 2004. P.1.
22 Cognisa Security, Inc. “About Us.” Company Web page. Atlanta, Ga.
[http://www.cognisa.com/about.asp].

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shopping malls, hospitals, other commercial facilities and toll booth operations.23
The companies’ primary business line has been contract guards, although they also
offer other security services including alarm systems, security systems, and remote
monitoring.24
Akal Security. A privately owned company based in New Mexico, Akal
security provides nationwide contract guard services. Akal serves primarily
government agencies, guarding facilities for the U.S. Marshals Service, the U.S.
Army, and the Department of Homeland Security, as well as transportation terminals,
harbors, and some corporate facilities.25 Akal provides guarding services (except
passenger screening) to the Baltimore-Washington International Airport and other
airports. In Los Angeles, Tucson and Albuquerque, Akal workers guard city
buildings, water utilities, parks, and other facilities.26 Approximately 1,700 Akal
guards provide access control services at eight U.S. Army bases including Fort Hood
(TX), Fort Riley (KS) and three army weapons depots.27
Conclusion
On August 1, 2004, the Department of Homeland Security (DHS) issued a
terrorism alert for financial institutions in New York and Washington, DC, and
Newark, NJ. Press reports noted that these institutions employed private security
guards, and that surveillance by terrorists included the deployment, armament, and
activity of those guards.28 This alert demonstrated that, in addition to their traditional
roles, private security guards may well be the first line of defense against future
terrorist attacks. As noted earlier in this report, dependence on contract guards for
public security may raise policy concerns about their capabilities, oversight and
cost-effectiveness. Because more than half of private security guards in the United
States are employed by contract guard companies, it may be important for policy
makers to understand the key characteristics of the contract guard industry when
considering security policy. In addition, these issues may be addressed as Congress
reviews the recommendations of the 9/11 Commission report.
23 Barton Protective Services Inc. “Allied Security and Barton Protective Services Agree to
Merge.” Company press release. King of Prussia, PA. May 24, 2004.
2 4 Allied Security. “About Allied Security.” Company website.
[http://www.alliedsecurity.com/pages.html].
25 Akal Security. Capability Statement. Albuquerque, NM. 2004. P.2.
26 Salem, N. “Akal Wins $100 Million Security Pact.” Albuquerque Tribune. March 11,
2004.
27 Akal Security. Akal Security Newsline. “Akal ‘Scores High’ with Army.” Company
newsletter. Spring 2004. P.4. and Salem, N. Op. Cit., March 11, 2004.
28 Eggen, D. and Mintz, J. “Washington and N.Y. Put on Alert.” Washington Post. August
2, 2004. P. A1.

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Appendix:
References for Contractor Operating Statistics
Securitas U.S.A. (Securitas)
Securitas AB Full Year Report, January-December 2003. Stockholm, Sweden. pp4-5.
[http://www.securitasgroup.com/www/secgroup/secgroupwww.nsf/dummyview2/
7 c d 2 4 2 9 1 c 8 3 2 7 d 3 4 8 0 2 5 6 c f 2 0 0 5 f b 0 6 8 / $ f i l e / j a n -
dec%202003_eng_2.pdf?openelement&lang=1].
Wackenhut (Group 4 Securicor)
Group 4 Falck and Securicor. “Group 4 Falck and Securicor Announce Merger to
Create a Global Leader in Security Services.” Joint press release. No. 04/04 February
24, 2004. Revenues converted from British pounds using U.S. Federal Reserve 2003
average daily foreign currency exchange rate ($1.635/£1.0). Employee data from
company Web page: [http://www.wackenhut.com/object.php?obj=b000c].
Allied / Barton
Allied Security company web page. [http://www.alliedsecurity.com/pages.html];
Barton Protective Services. “Allied Security and Barton Protective Services Agree
t o M e r g e . ” P r e s s r e l e a s e . M a y 2 4 , 2 0 0 4 .
[http://www.bartonsolutions.com/news.htm.].
Merger pending in 2004; data reflect consolidated 2003 operations.
Akal Security
Associated Press. “Akal Wins Army Contracts.” Albuquerque Business Journal.
October 13, 2003. Privately held company.
Guardsmark
Guardsmark, LLC. “Guardsmark Reports Record Revenue for First Nine Months of
Fiscal Year 2003.” Press release. April 30, 2003. Data are for FY2003. Revenues
estimated based on first nine months results.
TransNational Security Group
Hoover’s, Inc. “TransNational Security Group, LLC.” Online company profile.
[http://www.hoovers.com]. TransNational is an alliance of 11 regional
"member-owner" companies. Data are for 2002.
U.S. Security Associates
U.S. Security Associates, Inc. “Company Overview.” Company Web page.
[http://www.greatguards.com/overview.htm]; EmploymentGuide.com. “Company
P r o f i l e – U . S . S e c u r i t y A s s o c i a t e s , I n c . ” W e b p a g e .
[http://www.employmentguide.com/browse_employers/13434/13434/view_comp
any_profile.html].
Initial (Rentokil-Initial)
Rentokil-Initial, PLC. 2003 Annual Report. p7. Revenues converted from British
pounds using U.S. Federal Reserve 2003 average daily foreign currency exchange
rate ($1.635/£1.0). [http://www.rentokil-initial.com/rentokil-frameset.htm]; Initial

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Security (USA). “About Initial Security.” Company Web page.
[http://www.initialsecurity.com/coinfo/index.asp].
ABM Security Services
ABM Industries, Inc. “ABM Industries Incorporated Acquires Operations Of Security
Services of America.” Press release. March 9, 2004; and “ABM Security Services
Awarded Contract With the United States Postal Service.” Press release. June 24,
2004; Hoover’s, Inc. “American Commercial Security Services, Inc.” Online
company profile. [http://www.hoovers.com]. Data reflect consolidated 2003
operations of American Commercial Security Services and Security Services of
America.
Cognisa (Group 4 Securicor)
Group 4 Falck and Securicor. “Group 4 Falck and Securicor Announce Merger to
Create a Global Leader in Security Services.” Joint press release. No. 04/04 February
24, 2004. Revenues converted from British pounds using U.S. Federal Reserve 2003
average daily foreign currency exchange rate ($1.635/£1.0). Employee data from
company Web page: [http://www.cognisa.com/about.asp].

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