DoD's $160M Engineering Services Contract Awarded to Tetra Tech Inc. Faces Scrutiny
Contract Overview
Contract Amount: $16,004,432 ($16.0M)
Contractor: Tetra Tech Inc
Awarding Agency: Department of Defense
Start Date: 2016-07-28
End Date: 2027-03-31
Contract Duration: 3,898 days
Daily Burn Rate: $4.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: IGF::OT::IGF PROGRAM MANAGEMENT OFFICE (PMO)
Place of Performance
Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23508
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $16.0 million to TETRA TECH INC for work described as: IGF::OT::IGF PROGRAM MANAGEMENT OFFICE (PMO) Key points: 1. The contract value of $160 million over 11 years raises questions about long-term cost-effectiveness. 2. Awarded under full and open competition, the pricing and value require further assessment. 3. The Cost Plus Award Fee (CPAF) structure introduces potential for cost overruns. 4. The Engineering Services sector is broad; specific benchmarks are needed for accurate comparison.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee (CPAF) structure, with a base fee and award incentives, makes direct pricing comparison difficult without detailed performance data. The significant duration and value suggest a need for robust cost tracking and justification against market rates for similar engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a broad solicitation process. However, the CPAF pricing structure may not always yield the most competitive pricing compared to fixed-price contracts, depending on the clarity of performance metrics and the agency's oversight.
Taxpayer Impact: The use of CPAF, while allowing flexibility, could potentially lead to higher costs for taxpayers if not managed diligently, as contractor incentives are tied to performance metrics that may inflate the final price.
Public Impact
Taxpayers may be subject to costs exceeding initial estimates due to the CPAF structure. The long contract duration could impact the adoption of newer, potentially more cost-effective technologies. The Department of the Navy's reliance on a single contractor for extensive engineering services warrants ongoing performance monitoring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee (CPAF) structure
- Long contract duration (approx. 11 years)
- Lack of specific performance metrics for award fee calculation in provided data
Positive Signals
- Awarded under full and open competition
- Contract supports critical Department of Defense needs
Sector Analysis
This contract falls within the Engineering Services sector, which is vital for infrastructure development and project management across government agencies. Benchmarks for similar large-scale engineering support contracts are typically in the tens to hundreds of millions, depending on scope and duration.
Small Business Impact
The provided data does not indicate any specific subcontracting goals or participation by small businesses in this contract. Further investigation is needed to determine if small businesses had opportunities to compete for portions of this work.
Oversight & Accountability
The Cost Plus Award Fee (CPAF) structure necessitates strong oversight from the Department of the Navy to ensure that award fees are justified by performance and that costs remain reasonable. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns due to CPAF structure
- Long contract duration may limit flexibility and innovation
- Lack of transparency in award fee determination criteria
- Insufficient data on small business participation
Tags
engineering-services, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.0 million to TETRA TECH INC. IGF::OT::IGF PROGRAM MANAGEMENT OFFICE (PMO)
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 $16.0 million.
What is the period of performance?
Start: 2016-07-28. End: 2027-03-31.
How does the final awarded cost compare to the initial estimated cost, considering the CPAF structure?
Without access to the detailed award fee calculations and the contractor's performance against specific metrics, it's challenging to determine the final awarded cost relative to initial estimates. The CPAF structure allows for variability, making direct comparison difficult. Agencies must rigorously track performance and justification for awarded fees to ensure value.
What are the specific performance metrics used to determine the award fee, and how are they monitored?
The provided data does not specify the performance metrics used for the award fee. Effective oversight requires clearly defined, measurable, achievable, relevant, and time-bound (SMART) criteria. The Department of the Navy must have robust systems in place to monitor contractor performance against these metrics and ensure fair, objective fee determination.
Are there opportunities for small businesses to participate in subcontracting for this contract?
The data indicates that the prime contractor, Tetra Tech Inc., was awarded the contract, and there is no explicit mention of small business participation or subcontracting goals. A review of the contract details and the contractor's subcontracting plan would be necessary to ascertain the extent of small business involvement.
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
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tetra Tech, Inc.
Address: 4433 CORPORATION LN STE 300, VIRGINIA BEACH, VA, 23462
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $16,004,432
Exercised Options: $16,004,432
Current Obligation: $16,004,432
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $347,623
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6247016D9008
IDV Type: IDC
Timeline
Start Date: 2016-07-28
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 00:00:00
Last Modified: 2025-09-25
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