Tetra Tech Wins Twin Multi-Million Government Contracts - Analyst Blog

Tetra Tech Inc.TTEK , one of the globally prominent consulting, engineering, program and construction management service providers, has won a multiple award indefinite-delivery contract worth $45 million from the U.S. Army Corps of Engineers Mobile District. The contract has been awarded jointly to Tetra Tech and Mason & Hangar Group, Inc.

The contract, spanning a period of 5 years, requires the company to provide architectural support and engineering design services for concerned projects. The deal entails Tetra Tech to ensure proper execution of the master plan, obtain requisite environmental clearances, necessitate solicitations for design, and perform value engineering studies and facility design of projects.

U.S. EPA Research Contract

At the same time, the company also won a $20 million multiple-award contract from the Environmental Protection Agency ("EPA") to provide support to the National Homeland Security Research Center ("NHSRC") by testing and evaluating projects.

The 5-year contract entails Tetra Tech to address issues related to chemical, biological, radiological and other contaminating agents that can pollute drinking water, wastewater systems and other urban areas. The company will provide technical support services by developing tools to monitor water quality and also creating competent technologies for effectively treating wastewater generated during the decontamination process.

Our Take

The current contracts continue Tetra Tech's ongoing spree of winning government deals at regular intervals. In fiscal first-quarter 2015, the company won a $185 million environmental remediation contract from the U.S. Army Corps of Engineers. Additionally, it has been awarded major contracts by other government agencies like U.S. EPA, U.S. Navy and the U.S. Agency for International Development.

We believe the company's major government contract wins will act as a key driver of profitability, going forward. In the long run, such contracts will serve to strengthen the company's position in the government end-markets and ensure a steady and predictable revenue stream.

Zacks Rank

Tetra Tech currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Landauer Inc. LDR , Perma-Fix Environmental Services Inc. PESI and Sharps Compliance Corp. SMED . While both Landauer and Perma-Fix sport a Zacks Rank #1 (Strong Buy), Sharps Compliance carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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