DoD's $20.9M Remedial Action Contract for Environmental Cleanup Shows Fair Value and Strong Competition
Contract Overview
Contract Amount: $20,936,319 ($20.9M)
Contractor: Tetra Tech EC, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-04-01
End Date: 2020-07-31
Contract Duration: 1,948 days
Daily Burn Rate: $10.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: IGF::OT::IGF REMEDIAL ACTION CONTRACT (RAC VI)
Place of Performance
Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841
Plain-Language Summary
Department of Defense obligated $20.9 million to TETRA TECH EC, INC. for work described as: IGF::OT::IGF REMEDIAL ACTION CONTRACT (RAC VI) Key points: 1. The contract demonstrates a commitment to environmental remediation, aligning with federal priorities for hazardous waste management. 2. Full and open competition suggests a robust marketplace for environmental services, potentially driving competitive pricing. 3. The cost-plus award fee structure incentivizes contractor performance and cost control. 4. The contract duration of nearly five years indicates a significant, long-term environmental challenge being addressed. 5. Geographic focus on Rhode Island highlights targeted environmental cleanup efforts in specific regions. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.
Value Assessment
Rating: good
The contract's total value of $20.9 million over approximately five years for environmental remediation services appears reasonable given the scope of work. Benchmarking against similar large-scale environmental cleanup contracts managed by the Department of Defense suggests that the pricing is within an expected range. The cost-plus award fee (CPAF) structure, while potentially leading to higher final costs than fixed-price contracts, allows for flexibility in addressing unforeseen environmental conditions and incentivizes contractor efficiency and performance through award fees.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The specific number of bidders is not provided, but the competitive nature of the award process suggests that the government sought the best value from a range of potential providers. This approach is generally expected to yield more favorable pricing and innovative solutions compared to sole-source or limited competition awards.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is likely to result in more cost-effective environmental remediation services, ensuring that federal funds are used efficiently to address environmental liabilities.
Public Impact
The primary beneficiaries are the Department of Defense and potentially the surrounding communities in Rhode Island, through the cleanup of hazardous environmental sites. The contract delivers essential environmental remediation services, likely involving the assessment, containment, and removal of hazardous substances. The geographic impact is concentrated in Rhode Island, addressing specific environmental concerns within that state. Workforce implications include the creation of jobs for environmental scientists, engineers, technicians, and support staff involved in the cleanup operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of explicit small business set-aside or subcontracting goals may limit opportunities for smaller firms in the environmental services sector.
- The cost-plus award fee structure, while incentivizing performance, can lead to cost overruns if not closely monitored.
- The long duration of the contract could indicate complex or persistent environmental issues that may pose ongoing risks.
Positive Signals
- Awarded under full and open competition, suggesting a healthy market and potential for competitive pricing.
- The contract addresses critical environmental remediation needs for the Department of Defense, fulfilling regulatory and stewardship responsibilities.
- The use of an award fee structure provides an incentive for the contractor to achieve high levels of performance and cost efficiency.
Sector Analysis
The environmental remediation services sector is a significant part of the broader professional, scientific, and technical services industry. Federal agencies, particularly the Department of Defense, are major clients due to the extensive environmental liabilities associated with military bases and operations. Spending in this sector is driven by regulatory compliance (e.g., CERCLA, RCRA), cleanup initiatives, and ongoing environmental management. Comparable contracts often involve large dollar values and long durations, reflecting the complexity and scale of environmental challenges.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business (Tetra Tech EC, Inc.). While full and open competition was utilized, there is no explicit information regarding subcontracting plans or goals for small businesses. This could mean that small businesses may not be significantly involved in performing the work under this specific contract, potentially limiting their participation in this large federal remediation effort.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. The cost-plus award fee structure necessitates close monitoring of costs, performance, and adherence to contract requirements to ensure that award fees are justified. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Environmental Remediation Services
- Hazardous Waste Management
- Defense Environmental Cleanup Program
- Superfund Remedial Actions
- Military Base Realignment and Closure (BRAC) Environmental Activities
Risk Flags
- Potential for cost overruns due to CPAF structure
- Limited visibility into small business subcontracting opportunities
- Complexity of environmental remediation can lead to unforeseen challenges
Tags
department-of-defense, department-of-the-navy, environmental-remediation, remediation-services, cost-plus-award-fee, full-and-open-competition, rhode-island, large-contract, hazardous-waste, environmental-cleanup
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.9 million to TETRA TECH EC, INC.. IGF::OT::IGF REMEDIAL ACTION CONTRACT (RAC VI)
Who is the contractor on this award?
The obligated recipient is TETRA TECH EC, 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 $20.9 million.
What is the period of performance?
Start: 2015-04-01. End: 2020-07-31.
What is the historical spending trend for environmental remediation services by the Department of the Navy?
The Department of the Navy has consistently allocated significant funding towards environmental remediation over the past decade. While specific figures fluctuate annually based on program needs, regulatory changes, and site-specific requirements, the overall trend indicates a sustained commitment to addressing environmental liabilities. Factors influencing spending include the number of active cleanup sites, the complexity of contamination, and the phase of remediation (investigation, design, remediation, monitoring). The Navy's environmental program is one of the largest within the federal government, reflecting the extensive environmental footprint of its operations and installations worldwide. Analyzing historical spending patterns reveals a focus on compliance with federal laws like CERCLA and RCRA, as well as proactive environmental stewardship initiatives.
How does the performance of Tetra Tech EC, Inc. on similar contracts compare?
Tetra Tech EC, Inc. is a large, established government contractor with extensive experience in environmental services, including remediation. Assessing their performance on similar contracts requires a review of past performance evaluations, contract awards, and any documented issues or successes. Generally, large firms like Tetra Tech are awarded significant contracts due to their capacity, technical expertise, and established track record. Performance can vary by contract, but agencies typically evaluate contractors based on technical execution, schedule adherence, cost control, and management effectiveness. Information on specific past performance ratings or disputes would provide a more precise comparison, but their continued success in winning competitive bids suggests a generally positive performance history.
What are the key risks associated with this type of cost-plus award fee contract for environmental remediation?
Cost-plus award fee (CPAF) contracts, while offering flexibility for complex projects like environmental remediation, carry inherent risks. A primary risk is the potential for cost growth, as the contractor is reimbursed for allowable costs incurred. While the 'award fee' component incentivizes performance and cost control, it doesn't guarantee savings. If the scope of work expands due to unforeseen site conditions (common in environmental cleanup), costs can escalate. Another risk is the potential for contractor focus to shift towards maximizing the award fee rather than the most efficient or cost-effective remediation strategy, if performance metrics are not carefully defined and monitored. Robust government oversight is crucial to mitigate these risks, ensuring that costs are reasonable and allocable, and that performance objectives are met.
What is the typical duration and cost range for large-scale environmental remediation contracts awarded by the DoD?
Large-scale environmental remediation contracts awarded by the Department of Defense (DoD) typically span several years and involve substantial financial commitments. Contract durations can range from 3 to 10 years, or even longer, depending on the complexity of the contamination, the remediation technologies employed, and the regulatory requirements for site closure. The total contract values often fall within the tens to hundreds of millions of dollars. Factors influencing cost include the type and extent of contamination (e.g., soil, groundwater, sediment), the physical characteristics of the site, the required cleanup standards, and the specific remediation methods chosen. Contracts like the one awarded to Tetra Tech EC, Inc. for $20.9 million over nearly five years are representative of significant, but not the largest, remediation efforts undertaken by the DoD.
How does the PSC code (if available) or NAICS code relate to the services provided under this contract?
The North American Industry Classification System (NAICS) code provided is 562910, which corresponds to 'Remediation Services'. This classification accurately reflects the primary nature of the work performed under this contract, encompassing the cleanup or restoration of properties contaminated by pollution or other hazardous substances. Services under this NAICS code can include site investigation, hazard assessment, soil and groundwater remediation, demolition of contaminated structures, and waste treatment and disposal. The Product Service Code (PSC) is not provided in the data, but if it were, it would offer a more granular classification of the specific goods or services procured, such as environmental engineering, hazardous material removal, or waste management services.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tetra Tech, Inc. (UEI: 045224250)
Address: 1230 COLUMBIA ST STE 750, 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: $20,936,319
Exercised Options: $20,936,319
Current Obligation: $20,936,319
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6247313D4808
IDV Type: IDC
Timeline
Start Date: 2015-04-01
Current End Date: 2020-07-31
Potential End Date: 2020-07-31 00:00:00
Last Modified: 2021-03-08
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