Tetra Tech Wins $32 Million Single-Award Contract From USAID

Tetra Tech, Inc. (NASDAQ:TTEK) recently announced that the company has secured a $32 million, single-award contract from the U.S. Agency for International Development (USAID). The deal will help in the expansion of water, sanitation, and hygiene (WASH) services in Uganda.

Per the five-year Uganda Sanitation for Health Activity contract, Tetra Tech will offer technical services to enhance the household access to sanitation and water services. This will also facilitate health improvement through evidence-based behavior change campaigns in homes, health facilities as well as schools. Moreover, the company will collect data through modern methods like sensors mobile texting surveys and water usage information, leading to efficient documentation of behavior change.

Working with the Ugandan Ministry of Health and Ministry of Water and Environment, Tetra Tech will also support WASH sector policy reforms. Moreover, the collaboration with private sector service providers will promote investment in WASH facilities and facilitate arrangements for financing the sanitation and hygiene services.

Our Take

Tetra Tech remains optimistic about its growth across all four client sectors namely U.S. federal, U.S. state and local, the U.S. commercial work and finally international. Based on growth rate forecast for both the U.S. federal and the U.S. state local markets, the company expects federal work to comprise almost a third of its business and grow at a rate of 5-10% for the rest of the fiscal 2018. Work for U.S. state and local clients is anticipated to grow 10-15% in rest of fiscal 2018. Such positive industry trends are expected to boost company’s growth in the long run.

Moreover, Tetra Tech believes that the solid pipeline of projects in the Department of Defense and development-related services, in the United States will continue to propel growth of its federal business. This apart, the company’s robust financial health and diligent capital deployment strategies have also been driving its growth momentum.

However, strong competition from various big and small sector players including the likes of Donaldson Company, Inc. (NYSE:DCI) , Advanced Emissions Solutions, Inc. (NASDAQ:ADES) and LiqTech International, Inc. (NYSE:LIQT) remains potent threat to Tetra Tech’s profitability.

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