DoD's $1.98B environmental assessment contract with Tetra Tech Inc. awarded under full and open competition

Contract Overview

Contract Amount: $19,771,003 ($19.8M)

Contractor: Tetra Tech Inc

Awarding Agency: Department of Defense

Start Date: 2008-08-08

End Date: 2014-09-30

Contract Duration: 2,244 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: NSA, NAPLES, CONTINUING ENVIRONMENTAL SITE ASSESSMENT

Plain-Language Summary

Department of Defense obligated $19.8 million to TETRA TECH INC for work described as: NSA, NAPLES, CONTINUING ENVIRONMENTAL SITE ASSESSMENT Key points: 1. The contract's significant value suggests a long-term, large-scale environmental remediation or assessment need. 2. Awarded under full and open competition, this indicates a robust market for environmental services within the DoD. 3. The Cost Plus Award Fee (CPAF) structure incentivizes performance but requires careful monitoring of costs and award criteria. 4. The duration of the contract (over 6 years) points to the complexity and ongoing nature of environmental site assessments. 5. The absence of small business set-aside suggests the primary contractor is a large entity, with potential subcontracting opportunities. 6. The engineering services NAICS code (541330) covers a broad range of technical expertise required for environmental work.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and scope. However, a nearly $2 billion spend over six years for environmental site assessments indicates a substantial investment. The Cost Plus Award Fee (CPAF) structure means the final cost could vary based on performance, making direct price comparisons difficult. It's crucial to assess if the awarded fees align with industry standards for similar large-scale environmental services and if the performance metrics driving award fees are appropriately stringent.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified firms were able to bid. This level of competition is generally positive for price discovery and ensures the government can select from a wide pool of capable contractors. The fact that it was competed broadly implies that the market for these specialized environmental services is healthy and accessible to various players.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, potentially saving taxpayer dollars by ensuring the government receives the best value. It also promotes a more dynamic market, encouraging innovation and efficiency among service providers.

Public Impact

The Department of the Navy benefits from comprehensive environmental site assessments, crucial for compliance and land management. This contract supports the cleanup and monitoring of environmental hazards at various Navy installations. The services delivered ensure compliance with federal environmental regulations, protecting public health and natural resources. Geographic impact is likely widespread, covering multiple Navy facilities requiring environmental assessment. The contract supports a workforce of environmental scientists, engineers, and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not managed diligently, as contractor incentives are tied to performance metrics that may not always align with strict cost control.
The large contract value and long duration present a significant financial commitment for the government, requiring ongoing budget allocation and oversight.
Ensuring the 'award fee' component is justified by exceptional performance and not merely routine execution is critical for value for money.
The broad scope of 'engineering services' could lead to scope creep if not clearly defined and managed.
Reliance on a single large contractor for such a critical and extensive service raises concerns about contractor dependency and potential single points of failure.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process that should yield favorable pricing and quality.
The Cost Plus Award Fee structure, when managed effectively, can incentivize high performance and quality outcomes.
Tetra Tech Inc. is a well-established firm in the environmental services sector, suggesting a track record of capability.
The contract addresses critical environmental compliance and remediation needs for the Department of Defense.
The long-term nature of the contract allows for sustained focus and expertise on complex environmental challenges.

Sector Analysis

The environmental consulting and engineering services sector is a significant market driven by regulatory compliance, infrastructure development, and remediation needs. Federal agencies, particularly the Department of Defense, are major clients due to extensive land holdings and historical environmental impacts. This contract falls within the broader engineering services (NAICS 541330) category, which includes firms specializing in environmental assessments, site remediation, and compliance monitoring. Comparable spending benchmarks for large-scale environmental contracts can range from tens of millions to billions of dollars, depending on the scope and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). The prime contractor, Tetra Tech Inc., is a large corporation. This suggests that small businesses are unlikely to be direct prime contractors on this specific award. However, there may be opportunities for small businesses to participate as subcontractors to Tetra Tech, particularly for specialized environmental services or regional support, depending on Tetra Tech's subcontracting plan and the specific needs of the project.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The Cost Plus Award Fee (CPAF) structure necessitates robust performance monitoring to ensure award fees are earned appropriately. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, but detailed performance reports and cost breakdowns may not be publicly available.

Related Government Programs

Environmental Remediation Services
Base Realignment and Closure (BRAC) Environmental Programs
Defense Environmental Security
Federal Facilities Cleanup Programs
Engineering and Technical Services Contracts

Risk Flags

Potential for cost overruns due to CPAF structure.
Need for rigorous performance monitoring to justify award fees.
Risk of scope creep in broad engineering services.
Contractor dependency for critical environmental services.
Ensuring fair competition for potential subcontractors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.8 million to TETRA TECH INC. NSA, NAPLES, CONTINUING ENVIRONMENTAL SITE ASSESSMENT

Who is the contractor on this award?

The obligated recipient is TETRA TECH INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $19.8 million.

What is the period of performance?

Start: 2008-08-08. End: 2014-09-30.

What is Tetra Tech Inc.'s track record with the Department of Defense for environmental services?

Tetra Tech Inc. has a significant history of contracting with the Department of Defense (DoD) and its various branches, including the Navy, Army, and Air Force, for a wide array of environmental services. This includes site assessments, remediation, compliance support, and engineering design. Their extensive portfolio with the DoD suggests a demonstrated capability to manage large, complex environmental projects. Analyzing past performance reviews, any contract disputes, and the successful completion of similar-sized contracts would provide a more granular understanding of their track record specifically within the DoD context. Their longevity and continued awards indicate a generally positive relationship and perceived competence by the agency.

How does the $1.98 billion contract value compare to other large federal environmental services contracts?

A contract valued at nearly $2 billion over approximately six years is considered a very large award within the federal environmental services sector. While the federal government spends billions annually on environmental services across various agencies (EPA, DOE, DoD, etc.), contracts of this magnitude are typically reserved for extensive, long-term, and geographically widespread projects. For instance, major environmental remediation efforts at Superfund sites or comprehensive environmental management contracts for large military installations often reach these figures. It signifies a substantial commitment by the Department of the Navy to address significant environmental challenges, likely involving multiple sites and complex remediation or assessment activities.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this size?

The primary risks with a large CPAF contract like this revolve around cost control and the definition of 'award fee' criteria. While CPAF incentivizes performance, there's a risk that the contractor may focus on achieving award fee targets at the expense of strict cost efficiency, potentially leading to higher overall costs than anticipated. Ensuring the performance metrics are clearly defined, measurable, and truly indicative of exceptional value is crucial. Additionally, the government must maintain rigorous oversight to prevent scope creep and ensure that costs are reasonable and allocable. Without diligent management, the 'cost plus' aspect can inflate expenditures, and the 'award fee' might be granted for performance that is merely satisfactory rather than truly outstanding.

How effective are environmental site assessments in achieving long-term environmental protection goals?

Environmental site assessments (ESAs) are a foundational tool for achieving long-term environmental protection goals. They identify existing contamination, assess potential risks to human health and the environment, and inform decisions about remediation strategies. Effective ESAs, like those presumably conducted under this contract, provide the critical data needed to prioritize cleanup efforts, ensure regulatory compliance, and prevent future environmental degradation. The long-term effectiveness hinges on the thoroughness of the assessments, the accuracy of the data collected, and the subsequent implementation of appropriate remediation and management plans based on the findings. This contract's significant investment suggests a commitment to thoroughness and long-term environmental stewardship by the Navy.

What is the historical spending trend for environmental services within the Department of the Navy?

Historical spending for environmental services within the Department of the Navy (DoD) has consistently been substantial, driven by the need to manage environmental liabilities across its numerous installations worldwide. Factors such as regulatory changes (e.g., CERCLA, RCRA), increased focus on sustainability, and the ongoing management of legacy contamination contribute to sustained high spending levels. While specific annual figures fluctuate based on program priorities and funding appropriations, the Navy's environmental budget typically runs into the hundreds of millions, and often billions, of dollars annually when considering major cleanup and compliance initiatives. This $1.98 billion contract represents a significant portion of that ongoing investment, reflecting the scale of environmental challenges faced.

What are the potential implications of this contract on environmental technology innovation?

Large, long-term contracts like this can have a dual impact on environmental technology innovation. On one hand, they provide a stable funding source and a large platform for deploying and testing new technologies, potentially encouraging contractors to invest in R&D to gain a competitive edge or meet stringent performance requirements. On the other hand, the sheer size and duration might favor established, proven methods and contractors, potentially creating barriers for smaller, innovative firms introducing novel solutions. The specific contract requirements and the government's willingness to incorporate innovative approaches within the CPAF framework will largely determine the extent to which this contract fosters or hinders technological advancement in environmental services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Tetra Tech, Inc. (UEI: 045224250)

Address: 5700 LAKE WRIGHT DR STE 309, NORFOLK, VA, 23502

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,771,003

Exercised Options: $19,771,003

Current Obligation: $19,771,003

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: N6247008D1001

IDV Type: IDC

Timeline