This sounds almost exactly what I have setup on my site.
We have a Fire Fighters Union site where there are groups from different departments all accessing one site but each group has pages that only their members can access. There are also plugins for other purposes like allowing some members to edit other user information in their group only. This makes it so that everyone has a front-end profile and I give those front end users the ability to edit the news stories, edit their own perofile, edit other profiles if they are the designated maintainer for that group.
All of these plugins rely on the Passage plugin. So in short YES!