Industrial building construction contract awarded to TETRA TECH TESORO, INC. for over $26 million
Contract Overview
Contract Amount: $26,027,902 ($26.0M)
Contractor: Tetra Tech Tesoro, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2009-12-14
Contract Duration: 808 days
Daily Burn Rate: $32.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: BASE YEAR
Place of Performance
Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $26.0 million to TETRA TECH TESORO, INC. for work described as: BASE YEAR Key points: 1. The contract value appears reasonable for industrial building construction services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The firm-fixed-price contract type shifts risk to the contractor. 4. The contract duration of 808 days is substantial, indicating a significant project. 5. The award was a delivery order under a larger contract vehicle. 6. The contractor has a track record with the Department of Defense.
Value Assessment
Rating: good
The base year value of $26,027,902 for industrial building construction is within a typical range for projects of this nature. Without specific details on the scope of work, a direct comparison is challenging. However, the firm-fixed-price contract type suggests that the contractor assumed the risk for cost overruns, which can be a positive indicator of value if the project is completed within budget. Benchmarking against similar industrial construction projects awarded by the Department of Defense would provide a more precise assessment of value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific delivery order. While more bidders would ideally lead to better price discovery, full and open competition generally promotes a more competitive environment than other methods.
Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives competitive pricing.
Public Impact
The Department of the Navy benefits from the construction of industrial facilities, likely supporting military operations and infrastructure. The services delivered include industrial building construction, which is critical for maintaining and expanding defense infrastructure. The geographic impact is primarily within Virginia, where the contract was performed. The contract likely supports a workforce involved in construction, engineering, and project management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if the scope of work expands beyond the initial fixed-price agreement.
- Dependence on the contractor's ability to manage complex construction projects effectively.
- Risk associated with the contractor's past performance on similar large-scale construction projects.
Positive Signals
- Firm-fixed-price contract structure transfers cost risk to the contractor.
- Awarded through full and open competition, suggesting a competitive bidding process.
- Contractor has experience with the Department of Defense, indicating familiarity with government contracting requirements.
Sector Analysis
Industrial building construction is a significant sector within the broader construction industry, often involving specialized engineering and project management. Contracts of this size are typical for the Department of Defense, which requires extensive infrastructure to support its operations. The market for such services is competitive, with numerous firms capable of undertaking large-scale industrial projects. Comparable spending benchmarks would depend on the specific type and scale of the industrial building constructed.
Small Business Impact
This contract does not indicate any specific small business set-aside provisions. The award was made to TETRA TECH TESORO, INC., which is likely a large business. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, though larger prime contractors often engage small businesses for specialized services.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Accountability measures are inherent in the firm-fixed-price contract, which obligates the contractor to deliver the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project-specific oversight information is often internal to the agency.
Related Government Programs
- Department of Defense Construction Contracts
- Naval Facilities Engineering Command Contracts
- Industrial Facility Construction
- Large-Scale Construction Projects
Risk Flags
- Contract awarded as a delivery order, requiring review of the parent contract's terms and competition.
- Firm-fixed-price contract, potential for contractor cost overruns impacting quality or schedule.
- Limited number of bidders (2) for this delivery order, may not represent optimal price discovery.
Tags
construction, industrial-building, department-of-defense, department-of-the-navy, firm-fixed-price, full-and-open-competition, delivery-order, virginia, large-contract, tetra-tech-tesoro-inc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to TETRA TECH TESORO, INC.. BASE YEAR
Who is the contractor on this award?
The obligated recipient is TETRA TECH TESORO, 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 $26.0 million.
What is the period of performance?
Start: 2007-09-28. End: 2009-12-14.
What is the track record of TETRA TECH TESORO, INC. with the Department of Defense for similar industrial building construction projects?
TETRA TECH TESORO, INC. has a history of performing contracts with the Department of Defense. While this specific award is for industrial building construction, their broader portfolio with the DoD likely includes various construction and engineering services. Analyzing their past performance on similar-sized projects, adherence to schedules, and quality of work on previous DoD contracts would provide a clearer picture of their capabilities and reliability. Information on past performance can often be found in federal procurement databases and through agency performance evaluations, though specific details may be sensitive.
How does the awarded price of $26,027,902 compare to market rates for similar industrial building construction projects?
Benchmarking the $26,027,902 award against market rates for similar industrial building construction requires detailed project specifications, including size, complexity, materials, and location. However, for a project of this nature awarded under full and open competition, the price is presumed to be competitive. The firm-fixed-price structure suggests that the contractor has factored in market conditions and their own cost structures to arrive at a bid that they believe is profitable and acceptable to the government. A comprehensive market analysis would involve comparing cost per square foot, labor rates, and material costs for comparable projects in the Virginia region.
What are the primary risks associated with this firm-fixed-price contract for industrial building construction?
The primary risk with a firm-fixed-price (FFP) contract is that the contractor may face financial losses if their costs exceed the agreed-upon price. This can lead to pressure on the contractor to cut corners on quality, safety, or scope to maintain profitability. For the government, risks include potential disputes if the contractor claims unforeseen conditions or scope changes, and the possibility that the contractor may not have the strongest incentive to innovate or improve efficiency beyond what is necessary to meet the contract terms. However, FFP contracts are generally favored for well-defined projects as they provide cost certainty for the buyer.
What is the expected effectiveness of the completed industrial building in supporting Department of the Navy operations?
The effectiveness of the completed industrial building hinges on its design, construction quality, and suitability for its intended purpose within the Department of the Navy's operational framework. Assuming the project meets all specifications and is built to high standards, it should enhance the Navy's capabilities by providing necessary facilities for maintenance, storage, production, or other industrial functions. The contract's success in delivering an effective facility will be measured by its operational readiness, durability, and contribution to the overall mission of the unit it serves. Post-occupancy evaluations and user feedback would provide the best measure of effectiveness.
How has federal spending on industrial building construction by the Department of the Navy trended over the past five years?
Analyzing federal spending trends on industrial building construction by the Department of the Navy over the past five years would require access to detailed historical procurement data. Generally, defense spending on infrastructure, including industrial facilities, can fluctuate based on strategic priorities, aging infrastructure needs, and budget allocations. Periods of increased geopolitical tension or modernization efforts might see higher investment. Conversely, budget constraints or shifts in focus to other areas could lead to reduced spending. Specific data would reveal whether this $26 million contract represents an increase, decrease, or stable level of investment in this category.
What are the implications of awarding a delivery order versus a new standalone contract for this construction project?
Awarding this project as a delivery order (DO) under an existing contract vehicle (like a Multiple Award Construction Contract - MACC) implies that the foundational contract, including terms, conditions, and competition, was already established. This approach can streamline the procurement process for subsequent needs, potentially reducing administrative burden and lead time compared to initiating a new, full-and-open competition for each individual project. For taxpayers, it can offer efficiencies if the underlying contract was competitively awarded and provides good value. However, it's crucial that the original contract vehicle itself was robustly competed and that the DOs remain within the scope and intent of that vehicle.
Industry Classification
NAICS: Construction › Nonresidential Building Construction › Industrial Building Construction
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N4008505R5052
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tetra Tech, Inc. (UEI: 045224250)
Address: 520 S INDEPENDENCE BLVD ST, VIRGINIA BEACH, VA, 23452
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $26,027,902
Exercised Options: $26,027,902
Current Obligation: $26,027,902
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N4008505D5057
IDV Type: IDC
Timeline
Start Date: 2007-09-28
Current End Date: 2009-12-14
Potential End Date: 2009-12-14 00:00:00
Last Modified: 2021-08-04
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