USAID awards $24.1M A&E II contract for Bien Hoa dioxin remediation, with a 5-year performance period

Contract Overview

Contract Amount: $24,119,851 ($24.1M)

Contractor: Tetra Tech, Inc.

Awarding Agency: Agency for International Development

Start Date: 2023-05-05

End Date: 2028-05-07

Contract Duration: 1,829 days

Daily Burn Rate: $13.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ARCHITECT-ENGINEERING SERVICES II FOR DIOXIN REMEDIATION AT BIEN HOA AIRBASE AREA ACTIVITY (A&E II)

Plain-Language Summary

Agency for International Development obligated $24.1 million to TETRA TECH, INC. for work described as: ARCHITECT-ENGINEERING SERVICES II FOR DIOXIN REMEDIATION AT BIEN HOA AIRBASE AREA ACTIVITY (A&E II) Key points: 1. Contract aims to address environmental contamination at a former U.S. military base in Vietnam. 2. The contract utilizes a Cost Plus Fixed Fee (CPFF) pricing structure. 3. Competition was robust, indicating potential for competitive pricing. 4. Performance period extends over five years, suggesting a long-term commitment to the project. 5. The contract is for architectural and engineering services related to remediation. 6. This award is part of a larger U.S. government effort to address environmental legacies.

Value Assessment

Rating: good

The contract value of $24.1 million for architectural and engineering services over five years appears reasonable given the complexity and scale of dioxin remediation at Bien Hoa Airbase. While specific benchmarks for similar large-scale environmental remediation projects are difficult to pinpoint without more granular data, the pricing structure (CPFF) allows for cost reimbursement plus a fixed fee, which is common for complex, evolving projects. The agency's commitment to a multi-year effort suggests a strategic approach to managing this significant environmental challenge.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive, suggesting that multiple firms were interested and capable of performing the required services. A competitive process helps ensure that the government receives fair market value and encourages contractors to offer their best pricing and technical solutions. The presence of four bidders indicates a healthy market for these specialized services.

Taxpayer Impact: Full and open competition typically leads to better price discovery and can result in cost savings for taxpayers by fostering a competitive environment among qualified contractors.

Public Impact

The primary beneficiaries are the Vietnamese population in the vicinity of Bien Hoa Airbase, who will experience improved environmental conditions. Services delivered include architectural and engineering expertise crucial for planning and executing dioxin remediation efforts. The geographic impact is localized to Bien Hoa Airbase and surrounding areas in Vietnam. The contract supports U.S. foreign policy objectives related to environmental security and international cooperation. This project contributes to the long-term environmental cleanup and restoration of a significant former military site.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs if the fixed fee is substantial relative to the effort.
Long-term contracts require careful monitoring to ensure continued performance and adherence to scope.
Geopolitical factors in Vietnam could potentially impact project timelines or execution.
The complexity of dioxin remediation presents inherent technical and environmental risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potentially fair pricing.
The multi-year duration indicates a sustained commitment to addressing a critical environmental issue.
The contract is managed by USAID, an agency with experience in international development and environmental projects.
The specific focus on dioxin remediation addresses a known and significant environmental hazard.

Sector Analysis

This contract falls within the Architectural Services (NAICS 541310) sector, specifically focusing on environmental engineering and remediation. The market for such specialized services is driven by government and private sector needs for environmental cleanup, particularly at former industrial or military sites. Comparable spending benchmarks are highly project-specific due to the unique nature of contamination and remediation requirements. The global market for environmental consulting and engineering services is substantial, with significant government contracts awarded for large-scale cleanup operations.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized support.

Oversight & Accountability

Oversight will likely be provided by USAID's contracting officers and program managers, who are responsible for monitoring contract performance, costs, and adherence to the statement of work. Given the nature of the project, there may also be involvement from environmental experts and potentially Inspector General oversight for fraud, waste, and abuse. Transparency will depend on USAID's public reporting practices regarding the project's progress and outcomes.

Related Government Programs

Environmental Remediation Services
Architectural and Engineering Services
International Development Projects
Department of Defense Environmental Programs
Superfund Site Remediation

Risk Flags

Environmental Remediation Complexity
Long-Term Project Management
International Operations Risks
Cost Control in CPFF Contracts

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $24.1 million to TETRA TECH, INC.. ARCHITECT-ENGINEERING SERVICES II FOR DIOXIN REMEDIATION AT BIEN HOA AIRBASE AREA ACTIVITY (A&E II)

Who is the contractor on this award?

The obligated recipient is TETRA TECH, INC..

Which agency awarded this contract?

Awarding agency: Agency for International Development (Agency for International Development).

What is the total obligated amount?

The obligated amount is $24.1 million.

What is the period of performance?

Start: 2023-05-05. End: 2028-05-07.

What is the historical spending by USAID on dioxin remediation projects, and how does this contract compare?

USAID's historical spending on dioxin remediation, particularly in Vietnam, has been significant, reflecting the U.S. commitment to addressing environmental legacies. The Bien Hoa Airbase dioxin cleanup is a multi-year, multi-phase effort. This specific $24.1 million contract for Architect-Engineer (A&E) II services represents a substantial investment within that broader initiative. While precise historical figures for all USAID remediation contracts are not readily available in a consolidated format, this award is consistent with the scale and long-term nature of such complex environmental projects. Previous phases and related contracts for the Bien Hoa site have also involved significant funding, underscoring the ongoing commitment and the substantial resources required for effective remediation.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for environmental remediation, and what are its implications for cost control?

The Cost Plus Fixed Fee (CPFF) contract structure is often employed for complex projects where the scope of work may evolve or is not fully defined at the outset, such as large-scale environmental remediation. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This structure provides flexibility to adapt to unforeseen challenges inherent in remediation. However, it can also incentivize cost incurrence, as the contractor's profit (the fixed fee) is not directly tied to cost savings. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to ensure cost control and value for money under a CPFF arrangement. Alternative structures like Firm-Fixed-Price (FFP) offer greater cost certainty but are less suitable for projects with high uncertainty.

What are the key performance indicators (KPIs) that will be used to evaluate the success of this Architect-Engineer II contract?

Key performance indicators (KPIs) for this Architect-Engineer II contract will likely focus on the quality and timeliness of the architectural and engineering deliverables, adherence to project milestones, and the effectiveness of the proposed remediation strategies. Specific KPIs could include the accuracy and completeness of design documents, the feasibility and cost-effectiveness of remediation plans, compliance with environmental regulations, and the successful integration of technical expertise. Performance will also be assessed based on the contractor's ability to manage project risks, coordinate with stakeholders (including USAID and Vietnamese authorities), and provide timely technical support throughout the remediation process. Regular progress reports and site inspections will be critical for monitoring these KPIs.

What is the track record of TETRA TECH, INC. in managing large-scale environmental remediation contracts, particularly those involving international agencies?

Tetra Tech, Inc. has a well-established track record in managing complex environmental engineering and remediation projects globally, including significant work for U.S. government agencies like USAID, the Department of Defense (DoD), and the Environmental Protection Agency (EPA). They have extensive experience in areas such as hazardous waste management, site assessment, and environmental restoration. Their portfolio includes numerous large-scale projects involving contaminated sites, similar to the Bien Hoa Airbase dioxin remediation. Tetra Tech's experience with international agencies demonstrates their capability to navigate diverse regulatory environments, manage logistics in foreign countries, and collaborate with local stakeholders. This background suggests they are well-equipped to handle the technical and logistical challenges of this specific contract.

How does the competition level (4 bidders) for this contract influence the potential value for taxpayers compared to sole-source or limited competition awards?

A full and open competition with four bidders generally provides a strong basis for achieving good value for taxpayers. This level of competition suggests that multiple capable firms were interested in the contract, leading to a more robust bidding process where companies strive to offer competitive pricing and technical solutions to win the award. Compared to sole-source or limited competition, where options are restricted, full competition allows the government to explore a wider range of capabilities and price points. This typically results in lower prices, better quality services, and increased innovation. The presence of four bidders indicates a healthy market for these services, which is a positive signal for taxpayer value.

What are the potential risks associated with the long duration (5 years) of this contract, and what mitigation strategies are typically employed?

The primary risks associated with a long-duration contract like this five-year A&E II award include potential scope creep, changes in project requirements or regulations over time, contractor performance degradation, and economic fluctuations affecting costs. Mitigation strategies typically involve robust contract management, including regular performance reviews, clear change control processes, and mechanisms for adjusting contract terms if necessary (e.g., for significant regulatory changes). USAID will likely employ strong oversight to ensure the contractor remains focused on objectives and maintains performance standards. Furthermore, periodic re-evaluation of project needs and contractor performance can help identify and address issues proactively, ensuring the project stays on track and within budget.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 72044022R00007

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 100 NICKERSON RD 2ND FL, MARLBOROUGH, MA, 01752

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,248,690

Exercised Options: $32,248,690

Current Obligation: $24,119,851

Actual Outlays: $11,560,379

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 7200AA21D00002

IDV Type: IDC

Timeline