Army awards $66.4M dredging contract to Great Lakes Dredge & Dock Co. for Arthur Kill Channel

Contract Overview

Contract Amount: $66,442,867 ($66.4M)

Contractor: Great Lakes Dredge & Dock CO, LLC

Awarding Agency: Department of Defense

Start Date: 2013-01-31

End Date: 2014-07-15

Contract Duration: 530 days

Daily Burn Rate: $125.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DREDGING OF ARTHUR KILL CHANNEL (S-AK-3), PLUS KVK #10 BUOY AND WEST-ELIZ.

Place of Performance

Location: STATEN ISLAND, RICHMOND County, NEW YORK, 10308

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $66.4 million to GREAT LAKES DREDGE & DOCK CO, LLC for work described as: DREDGING OF ARTHUR KILL CHANNEL (S-AK-3), PLUS KVK #10 BUOY AND WEST-ELIZ. Key points: 1. Contract value represents a significant investment in waterway infrastructure maintenance. 2. Full and open competition suggests a potentially competitive bidding process. 3. Definitive contract type indicates a long-term agreement for services. 4. Fixed-price structure aims to control costs for the government. 5. Project duration of 530 days highlights the scale of the dredging operation. 6. Geographic focus on New York waterways underscores regional infrastructure needs.

Value Assessment

Rating: good

The contract value of $66.4 million for dredging services appears to be within a reasonable range for a project of this magnitude, considering the scope of work involving the Arthur Kill Channel and associated buoyage. Benchmarking against similar large-scale federal dredging projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests an effort to establish cost certainty, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders participating, the competition level suggests a degree of market interest and potential for price discovery. However, the specific bid amounts and the spread between them would be necessary to fully assess the effectiveness of the competition in driving down costs.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple bids, which can lead to more competitive pricing and better value for the government's investment.

Public Impact

Benefits commercial shipping and maritime industries by ensuring navigable waterways. Supports economic activity in the New York/New Jersey port complex. Enhances the operational capacity of the U.S. Army Corps of Engineers in maintaining critical infrastructure. Impacts the marine construction and dredging workforce in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen subsurface conditions are encountered, despite fixed-price contract.
Environmental compliance risks associated with dredging activities in a sensitive waterway.

Positive Signals

Clear definition of scope for Arthur Kill Channel dredging.
Fixed-price contract provides cost predictability.
Award to an established dredging company with demonstrated capabilities.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on marine construction and dredging. The market for federal dredging services is often dominated by a few large, specialized firms. The value of this contract is substantial within this niche, reflecting the significant investment required for maintaining major shipping channels. Comparable spending benchmarks would involve looking at other Army Corps of Engineers projects for channel maintenance and improvement.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. There is no explicit information provided regarding subcontracting plans for small businesses. The scale of this project likely requires specialized heavy equipment and expertise, which may limit direct subcontracting opportunities for smaller, less specialized firms in this particular instance.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers, responsible for ensuring contract compliance and performance. Accountability measures are inherent in the definitive contract structure and firm fixed-price terms. Transparency is generally maintained through contract award databases and reporting requirements, though specific project-level oversight details are not provided.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Inland Waterways Trust Fund
Port Infrastructure Development Program

Risk Flags

Potential for unforeseen subsurface conditions
Environmental compliance risks
Logistical challenges in a high-traffic maritime area

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.4 million to GREAT LAKES DREDGE & DOCK CO, LLC. DREDGING OF ARTHUR KILL CHANNEL (S-AK-3), PLUS KVK #10 BUOY AND WEST-ELIZ.

Who is the contractor on this award?

The obligated recipient is GREAT LAKES DREDGE & DOCK CO, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $66.4 million.

What is the period of performance?

Start: 2013-01-31. End: 2014-07-15.

What is the historical spending pattern for dredging the Arthur Kill Channel by the Army Corps of Engineers?

Historical spending data for the Arthur Kill Channel dredging by the Army Corps of Engineers would reveal the frequency and cost of previous maintenance efforts. Analyzing this pattern can indicate whether this $66.4 million award represents a typical expenditure, an increase due to inflation or scope changes, or a deviation from historical norms. For instance, if previous dredging cycles were significantly less expensive or more frequent, it might suggest a need to investigate the reasons for the current contract's cost or scope. Conversely, if costs have escalated in line with inflation and material prices, it would provide context for the current award. Understanding the historical context is crucial for assessing the long-term financial commitment to maintaining this waterway and identifying any trends in maintenance needs or costs.

How does the awarded price compare to the estimated cost or other bids for this dredging project?

To assess the value for money, comparing the awarded price of $66.4 million to the government's independent cost estimate (if available) and the bids submitted by the other two competitors is essential. If the awarded price is significantly below the estimate or the next lowest bid, it suggests strong competition and potentially excellent value. Conversely, if it is close to or exceeds the estimate, further scrutiny of the scope and pricing might be warranted. The difference between the highest and lowest bids can also indicate the level of uncertainty or differing approaches among bidders. Without access to these comparative figures, it is difficult to definitively state whether this contract represents a particularly good or fair deal for taxpayers, beyond the general observation that full and open competition occurred.

What are the specific risks associated with dredging the Arthur Kill Channel, and how are they mitigated in this contract?

Dredging the Arthur Kill Channel presents several risks, including encountering unexpected subsurface obstructions (e.g., submerged debris, old pilings), potential environmental impacts (e.g., sediment disturbance, habitat disruption), and logistical challenges in a busy maritime environment. The firm fixed-price contract structure aims to mitigate financial risks for the government by capping costs, assuming the contractor has adequately priced for potential contingencies. Environmental risks are typically managed through strict adherence to environmental permits and monitoring protocols, often stipulated within the contract's special conditions. The contractor's experience and technical approach, detailed in their bid, would also be assessed to ensure they have robust plans for managing operational and safety risks.

What is the track record of Great Lakes Dredge & Dock Co., LLC in performing similar federal dredging contracts?

Great Lakes Dredge & Dock Co., LLC is a major player in the dredging industry with a long history of performing large-scale federal projects, including those for the U.S. Army Corps of Engineers. Their track record typically includes experience with channel deepening, maintenance dredging, and coastal restoration projects. Assessing their past performance on similar contracts would involve reviewing contract completion records, any history of disputes or claims, and client satisfaction feedback. A strong performance history suggests a lower risk of project delays or cost overruns. Given their established presence, it is likely they possess the necessary equipment, expertise, and financial stability to successfully execute a contract of this magnitude and complexity.

How does the duration and scope of this contract compare to typical federal channel maintenance projects?

The duration of 530 days (approximately 17-18 months) for the Arthur Kill Channel dredging, along with its $66.4 million price tag, suggests a project of significant scale and complexity. Typical federal channel maintenance projects can vary widely depending on the channel's size, sediment type, and required depth. Smaller maintenance tasks might last only a few months and cost a few million dollars. Larger capital projects, like deepening or widening channels, can extend over several years and cost tens or hundreds of millions. This contract appears to fall on the larger end of routine maintenance or could represent a substantial capital improvement project, requiring extensive dredging operations over an extended period.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W912DS13B0002

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Great Lakes Dredge & Dock Corporation (UEI: 362899130)

Address: 2122 YORK RD STE 200, OAK BROOK, IL, 60523

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,522,867

Exercised Options: $66,442,867

Current Obligation: $66,442,867

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,339,415

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline