USAID's $123.9M Engineering Services Contract with Tetra Tech Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $123,892,049 ($123.9M)

Contractor: Tetra Tech, Inc.

Awarding Agency: Agency for International Development

Start Date: 2016-07-23

End Date: 2025-02-26

Contract Duration: 3,140 days

Daily Burn Rate: $39.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF USAID OVERSEAS CONTRACT

Plain-Language Summary

Agency for International Development obligated $123.9 million to TETRA TECH, INC. for work described as: IGF::OT::IGF USAID OVERSEAS CONTRACT Key points: 1. The contract's significant value raises questions about cost-effectiveness given the Time and Materials pricing structure. 2. While awarded under full and open competition, the long duration and definitive contract type warrant a review of ongoing value. 3. The absence of small business participation is a notable concern. 4. Engineering services are critical for USAID's mission, but oversight is needed to ensure optimal resource allocation.

Value Assessment

Rating: questionable

The contract's Time and Materials pricing structure, coupled with its substantial value and long duration, suggests potential for cost overruns. Benchmarking against similar engineering services contracts awarded under different pricing models would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which is a positive indicator for price discovery. However, the definitive contract type and long performance period necessitate ongoing monitoring to ensure continued fair pricing.

Taxpayer Impact: The substantial value of this contract means that any inefficiencies or overpricing directly impact taxpayer funds allocated for international development.

Public Impact

Taxpayers are funding a large-scale engineering services contract with potential value concerns. The lack of small business involvement may limit opportunities for diverse contractors. The long-term nature of the contract means sustained oversight is crucial for accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing
Lack of small business participation
Long contract duration

Positive Signals

Full and open competition
Clear agency need

Sector Analysis

Engineering services are vital for infrastructure development and technical assistance, often procured by agencies like USAID. Benchmarks for similar contracts vary widely based on scope, duration, and complexity, but large definitive contracts require diligent oversight.

Small Business Impact

This contract did not involve small businesses, which represents a missed opportunity for economic inclusion and potentially limits the pool of innovative solutions. Future solicitations should consider strategies to encourage small business participation.

Oversight & Accountability

The Agency for International Development is responsible for overseeing this contract. Given its size and duration, robust oversight mechanisms are essential to ensure performance, manage costs, and achieve program objectives effectively.

Related Government Programs

Engineering Services
Agency for International Development Contracting
Agency for International Development Programs

Risk Flags

Potential for cost overruns due to T&M pricing
Lack of small business participation
Long contract duration increases risk exposure
Limited transparency on specific cost drivers
Need for robust ongoing performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Agency for International Development awarded $123.9 million to TETRA TECH, INC.. IGF::OT::IGF USAID OVERSEAS CONTRACT

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 $123.9 million.

What is the period of performance?

Start: 2016-07-23. End: 2025-02-26.

What is the estimated cost per unit of service or deliverable under this contract, and how does it compare to industry benchmarks for similar engineering services?

The provided data does not include specific cost breakdowns for units of service or deliverables, making a direct per-unit cost comparison difficult. The contract's Time and Materials (T&M) structure inherently leads to variable costs based on labor hours and material usage. Benchmarking would require detailed analysis of task orders and comparing them to similar T&M or fixed-price contracts for engineering services, considering factors like labor rates, overhead, and profit margins.

What are the primary risks associated with the Time and Materials pricing structure for this large, long-duration contract, and what mitigation strategies are in place?

The primary risk of T&M contracts is the potential for cost escalation due to undefined scope or inefficient performance, as the government bears the cost risk. Mitigation strategies typically include establishing labor rate ceilings, requiring detailed cost reporting, implementing strong project management oversight, and defining clear milestones and deliverables to control scope creep. The long duration amplifies these risks, necessitating continuous monitoring and potential re-negotiation if costs deviate significantly from expectations.

How effectively has the Agency for International Development ensured that this contract delivers value for money, considering the competition method and the contract's overall performance?

While awarded under full and open competition, the effectiveness of value for money is questionable due to the T&M pricing and long duration. The initial competition likely secured a competitive base, but ongoing value depends heavily on diligent oversight, effective task order management, and performance monitoring. Without specific performance metrics or cost-efficiency reviews, it's difficult to definitively assess value realization, highlighting a need for greater transparency in performance and cost-effectiveness reporting.

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

Solicitation ID: SOL-306-15-000076

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 100 NICKERSON RD STE 100, 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: $125,000,000

Exercised Options: $125,000,000

Current Obligation: $123,892,049

Actual Outlays: $51,313,220

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,898,631

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline