EPA's $51.3M Remediation Services Contract with Tetra Tech Faces Scrutiny Over Cost and Competition

Contract Overview

Contract Amount: $51,371,133 ($51.4M)

Contractor: Tetra Tech, Inc.

Awarding Agency: Environmental Protection Agency

Start Date: 2007-06-07

End Date: 2020-06-06

Contract Duration: 4,748 days

Daily Burn Rate: $10.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: RESPONSE ACTION CONTRACTS II

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $51.4 million to TETRA TECH, INC. for work described as: RESPONSE ACTION CONTRACTS II Key points: 1. The contract awarded to Tetra Tech, Inc. for remediation services totals over $51.3 million. 2. Awarded under full and open competition, the contract's effectiveness and pricing warrant further review. 3. The long duration and cost-plus-fixed-fee structure raise potential concerns about cost control and taxpayer value. 4. The lack of small business participation is noted, despite the contract's significant value.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, while common for complex projects, can lead to cost overruns if not tightly managed. Benchmarking against similar large-scale environmental remediation contracts is difficult without more granular cost data, but the total value and duration suggest a need for careful oversight.

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 long performance period (over 12 years) and the CPFF pricing model may have diminished the competitive pressure over time, potentially impacting the final cost to taxpayers.

Taxpayer Impact: The significant value of this contract means that any inefficiencies or cost escalations directly impact taxpayer funds. While competition was initially robust, the long-term nature of the contract necessitates ongoing vigilance to ensure value for money.

Public Impact

Environmental cleanup efforts are critical for public health and safety, making the effectiveness of such contracts paramount. The long duration of the contract raises questions about the initial scope definition and adaptability to changing environmental conditions or regulations. Transparency in reporting on project milestones, cost expenditures, and environmental outcomes is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration
Cost-plus-fixed-fee pricing
Lack of small business participation

Positive Signals

Awarded under full and open competition
Essential environmental remediation services

Sector Analysis

Environmental remediation services are critical for addressing pollution and restoring damaged ecosystems. Spending in this sector can vary significantly based on regulatory requirements, historical contamination, and the scale of cleanup efforts. This contract falls within a substantial spending category for the EPA.

Small Business Impact

The contract data indicates that small businesses were not involved in this award, which is a missed opportunity for economic inclusion. Agencies should strive to ensure that contracting vehicles, even large ones, provide avenues for small business participation where feasible.

Oversight & Accountability

The long duration and CPFF structure of this contract necessitate robust oversight from the Environmental Protection Agency to ensure that costs are controlled and that the remediation objectives are met efficiently and effectively. Regular performance reviews and audits are essential.

Related Government Programs

Remediation Services
Environmental Protection Agency Contracting
Environmental Protection Agency Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Extended contract duration may reduce competitive pressure
Lack of small business participation
Limited transparency on specific remediation outcomes

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $51.4 million to TETRA TECH, INC.. RESPONSE ACTION CONTRACTS II

Who is the contractor on this award?

The obligated recipient is TETRA TECH, INC..

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $51.4 million.

What is the period of performance?

Start: 2007-06-07. End: 2020-06-06.

What specific remediation activities were performed under this contract, and how do they align with the EPA's long-term environmental goals?

The contract was for Remediation Services, a broad category. To assess value, a detailed breakdown of specific sites, the nature of contamination addressed (e.g., hazardous waste, Superfund sites), and the environmental outcomes achieved (e.g., reduction in pollutant levels, land restored) would be necessary. This information is crucial for understanding the contract's contribution to the EPA's mission.

How effectively did the Cost Plus Fixed Fee structure manage costs over the contract's extensive 12-year period?

The CPFF structure incentivizes cost control through a fixed fee, but its effectiveness hinges on rigorous oversight and accurate initial cost estimations. Over a 12-year period, unforeseen challenges or scope creep could inflate costs. Analyzing the variance between initial estimates and final costs, along with the frequency and nature of any contract modifications, would reveal the efficiency of cost management.

Given the full and open competition, were there any indications that the pricing was not competitive throughout the contract's lifecycle?

While the initial award was competitive, the long duration of the contract raises questions about sustained price competitiveness. Market conditions, contractor efficiency, and evolving technologies can impact pricing. A review of task order pricing, comparison with industry benchmarks at different points in time, and analysis of any sole-source extensions or modifications would indicate if the pricing remained competitive.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation 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: PRR30610088

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 600 CLARK AVE STE 3, KING OF PRUSSIA, PA, 19406

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $86,686,998

Exercised Options: $86,686,998

Current Obligation: $51,371,133

Actual Outlays: $38,706

Contract Characteristics

Multi-Year Contract: Yes

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline