Simpson Security Systems finishing $7m prison job

Integrator says profit margins still good on bigger jobs
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Wednesday, January 25, 2012

ALEXANDRIA, La.—Shrinking profit margins, a common lament among integrators, are something Keith Simpson, CEO of Simpson Security Systems, says he’s experienced on smaller commercial jobs, but larger projects remain nicely profitable for his company.

Why? There’s less competition for “true integration” jobs, Simpson told Security Systems News.

“You don’t get today [what you used to get] for an eight-camera job,” Simpson said. “There’s a broad range of competition for those jobs.”

For major projects—like the $7 million Federal Bureau of Prisons job that Simpson started at the end of 2009 and is now finishing in Aliceville, Ala.—there are fewer integrators out there who are qualified to do the work, Simpson said.
 
For these kinds of jobs, Simpson bids on the project with a general contractor, electrical contractor or with the end user. Those reviewing the bids are not just looking for the lowest bid, he said.

“They’re held accountable for the fire and security, so they want someone who has the [expertise and proper licensing], manpower, the funding, bonding and warrantees [and the ability to complete the job on time],” he said. “We have competition, but we don’t see the magnitude of competition that we do on smaller jobs.”

In business since 1991, Simpson Security is an independent $8 million company with 70 employees, eight of whom are dedicated to engineering and software development. It has its own central station and offers live video monitoring. It does a lot of work for the Department of Justice and the U.S. Army Corps of Engineers, and in a variety of commercial vertical markets.

The Aliceville project is a new minimum-security prison, the seventh federal detention-center job Simpson will have completed. It has done several other county and state centers, he said.
 
It’s what Simpson calls a “true integration, where you take 13 or 15 systems, put it on one platform and custom-write the software for the customer.”

Simpson installed the fiber-optic backbone for the system, which includes fire, video and access control, MATV (cable), intercoms and paging, voice and data, perimeter fence detection, a phone system, a DVR with 5 terabytes of storage, a programmable logic controller (PLC) with custom-designed touch screens, and a command-and-control center with six 50-inch flat screens.

“Everything works off the backbone and it’s 100 percent redundant,” Simpson said. “If a node goes down in one building, another one takes over. It’s a completely self-healing loop,” he explained.

Of particular note are the 13 touch screens, the same kind used in U.S. Navy submarines, Simpson said. “The entire software package is custom-made and is a very complicated application,” he said.
 
In addition, the fence, “is audio done over fiber optic … they’ll know within five seconds if someone touches or is near the fence, and they’ll know what zone and where to respond,” Simpson said. “If someone taps the fence with a pencil, it will sound like someone’s cutting it with a chain saw inside the facility.”

Simpson’s brother, Kevin Simpson, is the company’s CFO. “He is still in the process of closing out the year.  When the final figures are in, he thinks 2011 will be our best year yet,” Keith Simpson said. “Gross sales are up and the margins are way up. And the outlook for ’12 and ’13 is positive as well.”

Simpson Security does about 100 integrated systems a year, and “we try to do one or two large projects a year.  We bid on four large projects and I think we’ll get two or three of those this year,” he said.