DoD's $31.6M Real Estate Support Contract with Tetra Tech Faces Scrutiny Over Cost and Competition
Contract Overview
Contract Amount: $31,594,763 ($31.6M)
Contractor: Tetra Tech Inc
Awarding Agency: Department of Defense
Start Date: 2016-08-16
End Date: 2027-06-30
Contract Duration: 3,970 days
Daily Burn Rate: $8.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: IGF::OT::IGF CERCLA AND REAL ESTATE SUPPORT
Place of Performance
Location: HORSHAM, MONTGOMERY County, PENNSYLVANIA, 19044
Plain-Language Summary
Department of Defense obligated $31.6 million to TETRA TECH INC for work described as: IGF::OT::IGF CERCLA AND REAL ESTATE SUPPORT Key points: 1. The contract's cost-plus award fee structure and extended duration raise questions about cost control. 2. Full and open competition was cited, but the effectiveness of price discovery needs further examination. 3. The lack of small business participation is a notable concern. 4. Engineering services sector benchmarks suggest potential for cost efficiencies.
Value Assessment
Rating: questionable
The Cost Plus Award Fee (CPAF) structure, while allowing flexibility, can incentivize cost escalation. Without detailed performance metrics and award fee criteria, assessing value for money is difficult. The total award value of $31.6M over nearly 11 years warrants close monitoring.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the long duration and multiple delivery orders could potentially limit the impact of initial competition over time. Further analysis of the bidding process and awarded price is needed.
Taxpayer Impact: The significant taxpayer investment necessitates robust oversight to ensure fair pricing and efficient service delivery, especially given the contract's extended timeline.
Public Impact
Taxpayers are funding extensive engineering and real estate support services for the Department of the Navy. The contract's duration spans over a decade, impacting long-term budget planning. Potential for cost overruns exists due to the CPAF structure and lack of small business involvement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure
- Long contract duration (nearly 11 years)
- No small business participation
- Lack of specific performance metrics for award fee
Positive Signals
- Awarded under full and open competition
- Services support critical real estate functions
Sector Analysis
This contract falls within the Engineering Services sector, which is characterized by a wide range of specialized expertise. Benchmarks for similar long-term, comprehensive support contracts vary significantly based on scope and complexity. The $31.6M value over 11 years suggests a substantial, ongoing requirement.
Small Business Impact
The contract explicitly states no small business participation (sb: false). This is a significant missed opportunity to foster small business growth and potentially introduce innovative solutions at competitive prices. Agencies should actively seek ways to include small businesses in contracting opportunities.
Oversight & Accountability
The contract's extended duration and CPAF structure necessitate strong oversight to ensure accountability and prevent cost creep. Regular reviews of performance, award fee determinations, and adherence to contract terms are crucial for effective management.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Overruns Potential (CPAF)
- Lack of Small Business Participation
- Contract Duration Risk
- Limited Agility/Adaptability
- Oversight Burden
Tags
engineering-services, department-of-defense, pa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.6 million to TETRA TECH INC. IGF::OT::IGF CERCLA AND REAL ESTATE SUPPORT
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 Navy).
What is the total obligated amount?
The obligated amount is $31.6 million.
What is the period of performance?
Start: 2016-08-16. End: 2027-06-30.
What specific performance metrics are used to determine the award fee, and how do these metrics ensure value for money?
The specific performance metrics for the award fee are not detailed in the provided data. A thorough review would require access to the contract's Statement of Work and award fee plan. Without these, it's challenging to ascertain if the fee structure truly incentivizes optimal performance and cost efficiency for the taxpayer.
How does the long duration of this contract impact the government's ability to adapt to changing real estate needs or leverage new technologies?
The nearly 11-year duration presents a risk of obsolescence and reduced agility. Market conditions, technological advancements, and evolving real estate requirements can occur rapidly. While delivery orders allow for some adjustments, the fundamental contract structure may not be nimble enough to fully capitalize on emerging opportunities or mitigate unforeseen challenges effectively.
Given the full and open competition, why was there no small business participation, and what steps are being taken to address this?
The absence of small business participation is concerning, especially for a contract of this magnitude. It's unclear if specific set-aside goals were considered or if the scope was deemed too large. Agencies should proactively analyze contract requirements to identify opportunities for small business involvement, potentially through subcontracting or breaking down requirements.
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
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Tetra Tech, Inc.
Address: 4433 CORPORATION LN STE 300, VIRGINIA BEACH, VA, 23462
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,594,763
Exercised Options: $31,594,763
Current Obligation: $31,594,763
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $279,126
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6247016D9008
IDV Type: IDC
Timeline
Start Date: 2016-08-16
Current End Date: 2027-06-30
Potential End Date: 2027-06-30 00:00:00
Last Modified: 2025-09-23
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