Industrial building construction contract awarded to TETRA TECH TESORO, INC. for over $30 million
Contract Overview
Contract Amount: $30,263,883 ($30.3M)
Contractor: Tetra Tech Tesoro, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-09-29
End Date: 2010-04-03
Contract Duration: 917 days
Daily Burn Rate: $33.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
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 $30.3 million to TETRA TECH TESORO, INC. for work described as: BASE YEAR Key points: 1. Contract value appears reasonable for industrial building construction services. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of over 900 days indicates a significant project scope. 4. Fixed-price contract type shifts risk to the contractor. 5. Awarded by the Department of Defense, indicating a focus on national security infrastructure. 6. The North American Industry Classification System (NAICS) code 236210 points to the construction of nonresidential buildings.
Value Assessment
Rating: good
The contract's base year value of approximately $30.26 million for industrial building construction is within a typical range for projects of this nature. Benchmarking against similar Department of Defense construction contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor is responsible for cost overruns, which is generally favorable for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a healthy level of competition for this contract, which typically leads to more favorable pricing for the government.
Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging the submission of the most cost-effective proposals.
Public Impact
The primary beneficiaries are the Department of Defense and its personnel, who will receive improved or new industrial facilities. The services delivered include the construction of industrial buildings, essential for military operations and logistics. The geographic impact is likely concentrated in Virginia, where the contract is being performed. Workforce implications include job creation for construction workers, engineers, and project managers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
- Ensuring timely completion within the 917-day duration is critical for operational readiness.
Positive Signals
- Full and open competition generally leads to better pricing and quality.
- Firm fixed-price contract shifts performance risk to the contractor.
- Awarded by a major federal agency (Department of Defense) suggests adherence to rigorous standards.
Sector Analysis
This contract falls within the Industrial Building Construction sector, a segment of the broader construction industry focused on specialized facilities for manufacturing, warehousing, and other industrial purposes. The market for such construction is driven by industrial growth, infrastructure investment, and specific agency needs, such as those of the Department of Defense. Comparable spending benchmarks would involve analyzing other large-scale industrial construction projects awarded by federal agencies.
Small Business Impact
There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The award to TETRA TECH TESORO, INC. suggests a larger prime contractor, and further analysis would be needed to determine the extent of small business participation through subcontracting opportunities.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant Department of Defense contracting command. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver the specified construction within budget. Transparency is generally facilitated through contract award databases, though specific project details may be limited.
Related Government Programs
- Military Construction
- Department of Defense Facilities
- Industrial Infrastructure Projects
Risk Flags
- Potential for cost overruns if unforeseen site conditions arise.
- Risk of quality compromise if contractor faces financial pressure.
- Ensuring timely completion within the specified duration.
Tags
construction, department-of-defense, department-of-the-navy, industrial-building, firm-fixed-price, full-and-open-competition, delivery-order, virginia, large-contract, infrastructure
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.3 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 $30.3 million.
What is the period of performance?
Start: 2007-09-29. End: 2010-04-03.
What is the track record of TETRA TECH TESORO, INC. with federal contracts, particularly in industrial construction?
A review of federal contract databases would be necessary to fully assess TETRA TECH TESORO, INC.'s track record. This would involve examining past performance on similar industrial construction projects, including contract values, completion timeliness, and any history of disputes or performance issues. Understanding their experience with firm fixed-price contracts and their ability to manage large-scale projects for agencies like the Department of Defense would provide crucial context for evaluating their suitability and reliability on this specific award.
How does the awarded price compare to similar industrial building construction contracts by the Department of Defense?
To benchmark the value, one would compare the approximately $30.26 million base year award to similar industrial building construction contracts awarded by the Department of Defense over the past several years. Key comparison points would include project scope, size, complexity, location, and contract type. Analyzing the price per square foot or price per unit of construction for comparable projects would offer a quantitative measure of whether this contract represents good value for money. Without access to a detailed database of comparable projects, a precise benchmark is difficult, but the full and open competition suggests a competitive pricing environment.
What are the primary risks associated with this firm fixed-price industrial construction contract?
The primary risks for the government in a firm fixed-price contract are generally lower than in cost-reimbursement contracts, as the contractor assumes most of the financial risk. However, risks can include potential for contractor default if they underestimate costs, leading to delays or a need for contract modification. There's also a risk that the contractor might cut corners on quality to maintain profitability, necessitating robust government oversight and quality assurance. For this specific contract, risks related to unforeseen site conditions, material price fluctuations, or labor availability could impact the contractor's ability to deliver on time and within budget, potentially leading to disputes or claims.
How effective is the full and open competition process in ensuring competitive pricing for large-scale construction projects like this?
Full and open competition is generally considered the most effective method for ensuring competitive pricing for large-scale construction projects. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids. The presence of 5 bidders in this case suggests that the process was successful in attracting multiple interested parties. This competition drives down prices as contractors vie for the award. However, the effectiveness can be influenced by the complexity of the solicitation, the clarity of requirements, and the overall market conditions for construction services at the time of bidding.
What is the historical spending pattern for industrial building construction by the Department of the Navy?
Analyzing historical spending patterns for industrial building construction by the Department of the Navy would require access to detailed federal procurement data over several fiscal years. This would involve identifying all contracts awarded under NAICS code 236210 (Industrial Building Construction) or similar codes, filtering them by the Department of the Navy as the awarding agency, and aggregating the total dollar amounts. Such an analysis would reveal trends in spending, average contract values, typical contract durations, and the frequency of awards. It could also highlight any significant shifts in investment in industrial facilities over time, potentially influenced by geopolitical events, modernization efforts, or changes in operational requirements.
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: 5
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: $32,763,883
Exercised Options: $30,263,883
Current Obligation: $30,263,883
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: 2007-09-29
Current End Date: 2010-04-03
Potential End Date: 2010-04-03 00:00:00
Last Modified: 2021-08-04
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