Army awards $304.5M dredging contract to Great Lakes Dredge & Dock Co. for Charleston channel maintenance

Contract Overview

Contract Amount: $304,510,182 ($304.5M)

Contractor: Great Lakes Dredge & Dock CO, LLC

Awarding Agency: Department of Defense

Start Date: 2017-10-26

End Date: 2022-05-31

Contract Duration: 1,678 days

Daily Burn Rate: $181.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: POST 45 CHARLESTON ENTRANCE CHANNEL MAINTENANCE AND NEW WORK DREDGING

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29406

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $304.5 million to GREAT LAKES DREDGE & DOCK CO, LLC for work described as: POST 45 CHARLESTON ENTRANCE CHANNEL MAINTENANCE AND NEW WORK DREDGING Key points: 1. Contract value represents significant investment in critical waterway infrastructure. 2. Sole awardee suggests potential for limited competition or specialized capabilities. 3. Long contract duration may indicate complex, multi-year project requirements. 4. Firm fixed-price structure shifts cost risk to the contractor. 5. Project's success hinges on effective dredging and environmental compliance. 6. Geographic focus on Charleston highlights regional economic importance.

Value Assessment

Rating: good

The contract value of $304.5 million for channel dredging appears substantial, reflecting the scale and complexity of maintaining a major port entrance. Benchmarking against similar large-scale civil engineering projects would provide a clearer picture of value for money. The firm fixed-price nature of the contract suggests that the contractor bears the primary risk for cost overruns, which can be a positive indicator for the government if the scope is well-defined. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of two bids suggests a moderate level of competition for this specialized service. While two bidders are better than one, a higher number of competitive bids typically leads to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition, even with two bidders, provides a baseline for price comparison and encourages contractors to offer competitive terms, ultimately benefiting taxpayers by seeking the best value.

Public Impact

Benefits the U.S. Army Corps of Engineers in maintaining navigable waterways. Ensures continued safe passage for commercial and military vessels at the Port of Charleston. Supports regional economic activity by facilitating trade and cargo movement. Likely involves a significant workforce of skilled laborers, engineers, and maritime professionals. Contributes to the environmental health of the Charleston harbor through sediment management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays impacting port operations if unforeseen conditions arise.
Environmental compliance monitoring is critical to avoid costly remediation or penalties.
Contractor's capacity to manage large-scale dredging operations effectively over a long period.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Awarded through full and open competition, suggesting a competitive bidding process.
Long-term contract allows for sustained focus on critical infrastructure maintenance.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on dredging and waterway maintenance. This is a critical sub-sector supporting national infrastructure and trade. The market for large-scale dredging services is specialized, often dominated by a few major players with the necessary equipment and expertise. The value of this contract is significant within this niche, reflecting the substantial investment required for maintaining major federal navigation channels.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary award was made to a large business. There is no explicit information on subcontracting plans for small businesses within this data. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for specialized services or supplies.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Army Corps of Engineers, responsible for managing and monitoring the performance of the dredging work. The firm fixed-price nature provides a degree of financial oversight by capping costs. Transparency would be enhanced through regular progress reports and potentially site visits. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Port Infrastructure Development
Navigation Channel Maintenance
Coastal and Harbor Dredging Projects

Risk Flags

Potential for unforeseen subsurface conditions impacting schedule and cost.
Environmental compliance risks during dredging and spoil disposal.
Market volatility (e.g., fuel prices) over the long contract duration.
Need for sustained agency oversight across multiple years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $304.5 million to GREAT LAKES DREDGE & DOCK CO, LLC. POST 45 CHARLESTON ENTRANCE CHANNEL MAINTENANCE AND NEW WORK DREDGING

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 $304.5 million.

What is the period of performance?

Start: 2017-10-26. End: 2022-05-31.

What is the historical spending pattern for Charleston harbor dredging contracts awarded by the Army Corps of Engineers?

Analyzing historical spending for Charleston harbor dredging reveals a pattern of significant, recurring investments necessary for maintaining navigability. Contracts of this nature are typically awarded every few years, with values fluctuating based on the scope of work (e.g., routine maintenance vs. major deepening projects) and prevailing market conditions for dredging services. The Army Corps of Engineers manages these contracts to ensure the port remains accessible for commercial and military traffic. Past awards would likely show a range of contract values, with larger sums allocated for more extensive projects. Understanding this historical context helps in evaluating the current $304.5 million award as either consistent with past investment levels or an outlier requiring further justification based on specific project needs or market inflation.

How does the awarded price compare to industry benchmarks for similar dredging projects?

Directly comparing the $304.5 million award to industry benchmarks for similar dredging projects requires access to detailed cost data and project specifics, which are not fully available in the provided summary. However, the scale of the project, involving maintenance and new work on a major entrance channel, suggests a significant undertaking. Industry benchmarks for large-scale dredging are often measured by cost per cubic yard of material moved or cost per linear foot of channel maintained. Given the firm fixed-price nature, the government has secured a ceiling price. A thorough analysis would involve comparing the estimated quantities of material to be dredged, the type of material (e.g., sand, silt, rock), the complexity of the work, and the contract duration against publicly available data from similar Army Corps of Engineers projects or industry cost-estimating resources. Without these specifics, the $304.5 million figure stands as a substantial investment.

What are the key performance indicators (KPIs) used to evaluate the success of this dredging contract?

The success of this dredging contract, awarded to Great Lakes Dredge & Dock Co., LLC, will likely be evaluated based on several key performance indicators (KPIs). Primarily, the contractor's ability to meet the specified depth and width requirements for the Charleston entrance channel is paramount. This includes adherence to environmental regulations during dredging operations, such as managing spoil disposal and minimizing turbidity. Timeliness of completion, within the contract's defined period, is another critical KPI, as delays can impact port operations and associated economic activity. Furthermore, the quality of the work, ensuring the channel remains clear and navigable post-dredging, will be assessed. The firm fixed-price contract structure implies that cost control, within the agreed-upon price, is also a measure of success, with the contractor bearing the burden of any cost overruns.

What is the track record of Great Lakes Dredge & Dock Co., LLC with federal contracts, particularly with the Army Corps of Engineers?

Great Lakes Dredge & Dock Co., LLC has a substantial track record with federal contracts, particularly with the U.S. Army Corps of Engineers, given their specialization in dredging and marine construction. They are a major player in this field, frequently awarded contracts for maintaining and improving navigation channels across the United States. Their history likely includes numerous successful completions of projects similar in scope and complexity to the Charleston channel work. Performance reviews and past contract data would indicate their reliability, adherence to schedules, quality of work, and compliance with environmental standards. While specific past performance details require deeper database searches, their consistent presence in winning large federal dredging contracts suggests a generally positive standing with agencies like the Army Corps.

What are the potential risks associated with a long-duration contract (1678 days) for channel dredging?

A long-duration contract, such as this 1678-day (approximately 4.6 years) award for Charleston channel dredging, presents several potential risks. Firstly, the longer timeframe increases the possibility of encountering unforeseen subsurface conditions (e.g., harder materials, buried obstructions) that could lead to scope changes or delays, even under a firm fixed-price contract if not adequately accounted for in the initial scope. Secondly, market conditions, such as fuel prices or equipment availability, can fluctuate significantly over several years, potentially impacting the contractor's profitability and motivation if not managed carefully. Thirdly, environmental regulations or permitting requirements could change during the contract period, necessitating adjustments to dredging or disposal methods. Finally, maintaining consistent oversight and quality control over such an extended period requires sustained effort from the contracting agency to ensure performance remains high throughout the contract's life.

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: W912HP17B0004

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Great Lakes Dredge & Dock Corporation

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

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

Financial Breakdown

Contract Ceiling: $304,610,182

Exercised Options: $304,510,182

Current Obligation: $304,510,182

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline