DLA-E Fuels Maintenance Contract Awarded to Tetra Tech Inc. for $18.6 Million

Contract Overview

Contract Amount: $18,622,265 ($18.6M)

Contractor: Tetra Tech Inc

Awarding Agency: Department of Defense

Start Date: 2024-08-08

End Date: 2026-08-07

Contract Duration: 729 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DLA-E FUELS RMMR NORTHWESTERN DIVISION. THE SCOPE WILL REQUIRE THE CONTRACTOR PROPERLY MAINTAIN AND REPAIR FEDERALLY FUNDED PETROLEUM SYSTEMS AND FACILITIES IN COMPLIANCE WITH APPLICABLE CODE, CRITERIA, AND FEDERAL, STATE, AND LOCAL REGULATIONS.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92101

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.6 million to TETRA TECH INC for work described as: DLA-E FUELS RMMR NORTHWESTERN DIVISION. THE SCOPE WILL REQUIRE THE CONTRACTOR PROPERLY MAINTAIN AND REPAIR FEDERALLY FUNDED PETROLEUM SYSTEMS AND FACILITIES IN COMPLIANCE WITH APPLICABLE CODE, CRITERIA, AND FEDERAL, STATE, AND LOCAL REGULATIONS. Key points: 1. Contract focuses on essential maintenance and repair of federally funded petroleum systems. 2. Scope includes compliance with federal, state, and local regulations. 3. Awarded via full and open competition, suggesting a competitive bidding process. 4. Firm Fixed Price contract type aims to control costs. 5. Duration of 729 days indicates a medium-term service requirement. 6. Geographic focus on California for petroleum system upkeep.

Value Assessment

Rating: good

The contract value of $18.6 million over two years for petroleum system maintenance in California appears reasonable given the scope. Benchmarking against similar federal contracts for facility maintenance and repair, especially those involving specialized petroleum systems, would provide a more precise value assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the scope was well-defined to avoid change orders.

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. With 5 bidders participating, this suggests a healthy level of competition for this service. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition and multiple bidders indicate that taxpayer dollars are likely being used efficiently, as the government received proposals from several companies, driving down the final award price.

Public Impact

Ensures the operational readiness and safety of critical federal petroleum infrastructure. Supports the Department of the Army's logistical and fuel supply chain capabilities. Services are geographically concentrated within California. Maintains compliance with environmental and safety regulations for petroleum handling. Indirectly supports military operations reliant on secure fuel supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for unforeseen repair needs in aging petroleum systems could lead to cost overruns despite fixed-price.
Ensuring consistent quality of maintenance across all specified facilities in California.
Dependence on specialized contractors for critical infrastructure maintenance.

Positive Signals

Firm Fixed Price contract structure provides cost certainty.
Full and open competition with multiple bidders suggests a competitive award.
Clear scope of work focused on essential maintenance and repair.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to facility maintenance and repair of specialized infrastructure. The market for such services is driven by government and industrial needs for maintaining critical assets, often involving stringent regulatory compliance. Comparable spending benchmarks would typically be found within broader facility support services or specialized infrastructure maintenance contracts awarded by various federal agencies.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions. Therefore, it is unlikely that small businesses were specifically targeted for this award. Subcontracting opportunities for small businesses may exist at the discretion of the prime contractor, Tetra Tech Inc., but are not explicitly mandated by the contract details provided.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting officers and technical representatives responsible for ensuring compliance with the contract terms and performance standards. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Fuels Management
Facility Maintenance and Repair Services
Petroleum Systems Operations
Department of Defense Infrastructure Support

Risk Flags

Potential for environmental contamination from aging petroleum systems.
Risk of service disruption impacting military fuel supply chain.
Ensuring consistent adherence to complex regulatory requirements.
Contractor performance risk in delivering timely and quality maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to TETRA TECH INC. DLA-E FUELS RMMR NORTHWESTERN DIVISION. THE SCOPE WILL REQUIRE THE CONTRACTOR PROPERLY MAINTAIN AND REPAIR FEDERALLY FUNDED PETROLEUM SYSTEMS AND FACILITIES IN COMPLIANCE WITH APPLICABLE CODE, CRITERIA, AND FEDERAL, STATE, AND LOCAL REGULATIONS.

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 Army).

What is the total obligated amount?

The obligated amount is $18.6 million.

What is the period of performance?

Start: 2024-08-08. End: 2026-08-07.

What is Tetra Tech Inc.'s track record with similar federal petroleum system maintenance contracts?

Tetra Tech Inc. has a significant history of performing engineering, construction, and technical services for federal agencies, including the Department of Defense. While specific details on their past performance with petroleum system maintenance contracts require deeper database analysis, their broad experience in infrastructure projects suggests a capacity to handle such requirements. Reviewing past performance evaluations and contract histories within federal procurement databases would provide a clearer picture of their success rate, any past issues, and client satisfaction on similar projects. This would include examining their experience with regulatory compliance, emergency repairs, and long-term maintenance plans for fuel storage and distribution systems.

How does the $18.6 million award compare to similar federal contracts for petroleum system maintenance?

Comparing the $18.6 million award for a 729-day contract requires analyzing the scope, geographic area, and specific services rendered against a benchmark of similar federal contracts. Contracts for maintaining large-scale petroleum infrastructure, especially those involving compliance with stringent environmental and safety regulations, can vary significantly in cost. Factors such as the number and type of facilities, complexity of the systems, and regional labor costs influence pricing. A preliminary assessment suggests the value is within a plausible range for a two-year service contract of this nature, but a detailed comparison with contracts of similar scope and duration awarded by agencies like the DLA, Navy, or Air Force would be necessary for a definitive value-for-money judgment.

What are the primary risks associated with maintaining federal petroleum systems under this contract?

The primary risks associated with maintaining federal petroleum systems include the potential for unforeseen structural failures or leaks in aging infrastructure, leading to environmental hazards and costly emergency repairs. Compliance risks are also significant, as failure to adhere to federal, state, and local regulations can result in fines and operational shutdowns. Operational risks involve ensuring uninterrupted fuel supply and preventing system downtime. Furthermore, the risk of contractor performance issues, such as inadequate maintenance or delayed repairs, could impact mission readiness. The firm fixed-price nature of the contract mitigates some financial risk for the government but places it on the contractor, potentially leading to pressure on quality if not properly managed.

How effective is the firm fixed-price contract type in ensuring value for this type of service?

The firm fixed-price (FFP) contract type is generally effective in controlling costs for services where the scope of work is well-defined and unlikely to change significantly. For routine maintenance and repair of petroleum systems, FFP provides cost certainty for the government, as the contractor assumes the risk of cost overruns. This encourages the contractor to be efficient and manage resources effectively. However, if unforeseen complexities or extensive repairs arise that were not adequately anticipated in the initial scope, the contractor might be incentivized to cut corners on quality to maintain profitability, or significant change orders could be requested, negating some of the cost certainty benefits. Robust government oversight is crucial to ensure quality standards are met under an FFP arrangement.

What is the historical spending pattern for petroleum system maintenance by the Department of the Army in California?

Analyzing historical spending patterns for petroleum system maintenance by the Department of the Army in California requires accessing detailed procurement data over several fiscal years. This would involve identifying contracts specifically for the maintenance, repair, and upkeep of fuel storage tanks, pipelines, and related facilities within the state. Trends might reveal an increasing or decreasing need for such services, potential shifts in contracting strategies (e.g., from sole-source to competitive), and average contract values. Understanding these patterns can help assess whether the current $18.6 million award is consistent with historical investment levels or represents a significant deviation, potentially indicating changes in infrastructure condition or operational requirements.

Industry Classification

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

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: W912DY23R0033

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1230 COLUMBIA ST STE 1000, SAN DIEGO, CA, 92101

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

Financial Breakdown

Contract Ceiling: $52,434,095

Exercised Options: $18,622,265

Current Obligation: $18,622,265

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QSHA20D000R

IDV Type: FSS

Timeline