DoD's $39.1M Navy contract for environmental investigation awarded to Tetra Tech Inc. shows fair value

Contract Overview

Contract Amount: $39,102,699 ($39.1M)

Contractor: Tetra Tech Inc

Awarding Agency: Department of Defense

Start Date: 2016-09-28

End Date: 2026-07-31

Contract Duration: 3,593 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: IGF::OT::IGF NWIRP BETHPAGE SITE 1 REGIONAL GW INVESTIGATION

Place of Performance

Location: BETHPAGE, NASSAU County, NEW YORK, 11714

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to TETRA TECH INC for work described as: IGF::OT::IGF NWIRP BETHPAGE SITE 1 REGIONAL GW INVESTIGATION Key points: 1. The contract's value appears reasonable when benchmarked against similar environmental consulting services. 2. Full and open competition suggests a healthy market for these specialized engineering services. 3. The contract duration and phased delivery order structure mitigate performance risks. 4. This contract supports critical environmental remediation efforts at a naval facility. 5. Tetra Tech's extensive experience in environmental services positions them well for this work. 6. The cost-plus award fee structure incentivizes performance and cost control.

Value Assessment

Rating: good

The contract's total value of approximately $39.1 million over its period of performance appears to be within a reasonable range for large-scale environmental investigation and remediation services. Benchmarking against similar contracts for engineering and environmental consulting services awarded by the Department of Defense and other federal agencies suggests that the pricing structure, while a cost-plus award fee, is competitive. The phased nature of the delivery orders allows for better cost management and oversight throughout the project lifecycle.

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 firms were likely solicited and submitted proposals. The presence of robust competition is a positive sign for price discovery and ensures that the government receives competitive offers. The specific number of bidders is not provided, but the designation implies a broad solicitation process.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among potential contractors, driving down costs and improving the quality of services offered.

Public Impact

The primary beneficiaries are the Department of the Navy and the public, through the remediation of environmental hazards. Services delivered include regional groundwater investigation and site remediation. The geographic impact is focused on the Bethpage, New York site. The contract supports specialized jobs in environmental engineering and consulting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not rigorously managed.
Complexity of environmental investigations can lead to unforeseen challenges and scope adjustments.
Reliance on a single contractor for a critical, long-term environmental project.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Cost-plus award fee structure incentivizes contractor performance and efficiency.
Long contract duration allows for thorough investigation and remediation planning.
Contractor (Tetra Tech) has significant experience in environmental services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on environmental consulting and remediation. The market for these services is substantial, driven by regulatory requirements and ongoing environmental management needs across government and industry. Comparable spending benchmarks for large-scale environmental investigations and remediation projects can vary widely based on site complexity, geographic location, and specific contaminants, but this contract appears to be of significant scale within its niche.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though larger prime contractors may engage small businesses for specialized support services.

Oversight & Accountability

Oversight is likely managed by the contracting officer's representative (COR) within the Department of the Navy, responsible for monitoring performance, costs, and compliance. The cost-plus award fee structure necessitates close financial oversight to ensure costs are reasonable and allocable, and that award fees are justified. Transparency is facilitated through contract reporting mechanisms, though specific public access details are not provided.

Related Government Programs

Environmental Remediation Services
Naval Facilities Engineering Command Contracts
Department of Defense Environmental Programs
Groundwater Investigation Contracts

Risk Flags

Potential for cost growth in CPAF contracts.
Complexity of environmental remediation projects.
Long contract duration may increase risk of performance issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to TETRA TECH INC. IGF::OT::IGF NWIRP BETHPAGE SITE 1 REGIONAL GW INVESTIGATION

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 $39.1 million.

What is the period of performance?

Start: 2016-09-28. End: 2026-07-31.

What is Tetra Tech's track record with similar environmental contracts for the Department of Defense?

Tetra Tech Inc. has a substantial track record of performing environmental services for the Department of Defense and other federal agencies. They frequently engage in large-scale remediation, investigation, and compliance projects. Their experience often includes managing complex groundwater contamination, hazardous waste site cleanup, and environmental compliance assessments. Reviewing their past performance on similar contracts, particularly those involving naval facilities or large-scale groundwater investigations, would provide further context on their capabilities and historical cost performance. While specific contract values and performance ratings are often proprietary, their consistent award of such contracts suggests a generally positive performance history.

How does the cost-plus award fee (CPAF) structure compare to other contract types for this type of service?

The Cost-Plus Award Fee (CPAF) structure is often used for complex, research-oriented, or technically challenging projects where the scope may evolve or where performance incentives are crucial. Unlike fixed-price contracts, CPAF allows the contractor to recover allowable costs plus a fee that is composed of a base fee (typically a small percentage of estimated costs) and an award fee. The award fee is determined by the government based on the contractor's performance against pre-defined criteria. This structure incentivizes the contractor to perform well and control costs, as a higher performance rating can lead to a larger total fee. However, it requires robust government oversight to ensure costs are reasonable and that award fee determinations are objective and fair. For environmental investigations, where scientific uncertainty and evolving site conditions are common, CPAF can be more appropriate than fixed-price contracts, which might lead to change orders or disputes.

What are the primary risks associated with this specific environmental investigation contract?

The primary risks associated with this contract include potential cost overruns due to the inherent uncertainties in environmental investigations, such as encountering unexpected contamination or geological conditions. Scope creep is another risk, where the investigation requirements may expand beyond the initial estimates, necessitating contract modifications and potentially increasing costs. Performance risk exists if the contractor fails to meet technical requirements or deadlines, impacting the remediation timeline. Furthermore, regulatory changes or evolving environmental standards could necessitate adjustments to the investigation approach. The long duration of the contract also introduces risks related to contractor stability and the potential for key personnel turnover. Effective risk mitigation relies on strong government oversight, clear performance metrics, and proactive communication.

What historical spending patterns exist for similar environmental services at naval facilities in New York?

Historical spending patterns for environmental services at naval facilities in New York, and nationwide, show a consistent and significant investment driven by regulatory compliance (like CERCLA and RCRA) and the need to manage legacy contamination. Naval facilities, often established decades ago, frequently require extensive environmental investigations and remediation due to past industrial activities. Spending in this category can fluctuate based on specific site discoveries, federal budget allocations, and the prioritization of cleanup efforts. Contracts for such services are often long-term and can range from tens to hundreds of millions of dollars, depending on the scale and complexity of the environmental issues. The Bethpage site, in particular, has a history of industrial contamination, suggesting a sustained need for investigation and remediation funding.

How does the 'delivery order' aspect of this contract influence its management and execution?

The contract being structured with 'delivery orders' means that the overall contract provides a framework and ceiling for services, but specific tasks, quantities, and timelines are defined in individual orders issued over the contract's life. This approach offers flexibility, allowing the Navy to adapt to evolving investigation needs and priorities. It enables phased execution, where different stages of the investigation can be initiated and funded sequentially. For the contractor, it provides a clearer roadmap for immediate tasks. However, it requires careful management by the government to ensure that the total value of issued orders does not exceed the contract ceiling and that each order aligns with the overall project objectives. It also allows for better cost control and performance monitoring on a task-by-task basis.

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: 5700 LAKE WRIGHT DR STE 309, NORFOLK, VA, 23502

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

Financial Breakdown

Contract Ceiling: $39,102,699

Exercised Options: $39,102,699

Current Obligation: $39,102,699

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