Army awards $66.3M contract for Charleston harbor dredging, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $66,296,796 ($66.3M)

Contractor: Great Lakes Dredge & Dock CO, LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-10

End Date: 2022-10-13

Contract Duration: 763 days

Daily Burn Rate: $86.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: POST 45 CONTRACT 4 DREDGING OF UNCLASSIFIED MAINTENANCE AND NEW WORK MATERIAL OF CHARLESTON LOWER HARBOR, CHARLESTON SC

Place of Performance

Location: CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29401

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $66.3 million to GREAT LAKES DREDGE & DOCK CO, LLC for work described as: POST 45 CONTRACT 4 DREDGING OF UNCLASSIFIED MAINTENANCE AND NEW WORK MATERIAL OF CHARLESTON LOWER HARBOR, CHARLESTON SC Key points: 1. Contract value represents a substantial investment in critical port infrastructure. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Project duration of over two years indicates a complex, long-term undertaking. 5. Geographic focus on Charleston, SC, points to regional economic development priorities.

Value Assessment

Rating: good

The contract value of $66.3 million for dredging services in Charleston Harbor appears reasonable given the scope of work, which involves maintenance and new work on unclassified material. While direct comparisons are difficult without specific project details, large-scale civil engineering projects of this nature often involve significant capital outlays. The firm fixed-price structure suggests that the contractor bears the primary risk for cost overruns, which can be a positive indicator of value if managed effectively. Benchmarking against similar Army Corps of Engineers dredging contracts in comparable ports would provide further insight into the pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a healthy level of competition for this significant dredging project. A competitive process like this is generally expected to drive prices down and encourage innovation, leading to better value for the government and taxpayers. The number of bidders provides a reasonable basis for price discovery and selection of the most advantageous offer.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of securing the most cost-effective solution for essential port infrastructure maintenance and improvement.

Public Impact

Benefits the economic vitality of Charleston, SC, by ensuring navigability of its port. Delivers essential services for maintaining and improving federal navigation channels. Impacts the maritime industry and businesses relying on the Port of Charleston. Supports the local and regional economy through infrastructure development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen subsurface conditions are encountered, despite fixed-price terms.
Risk of schedule delays due to weather, environmental regulations, or equipment availability.
Ensuring compliance with environmental permits and regulations throughout the dredging process.

Positive Signals

Firm fixed-price contract aligns contractor incentives with project completion and cost control.
Full and open competition likely resulted in a competitive bid and fair market price.
The contractor, Great Lakes Dredge & Dock Co., LLC, is a recognized leader in the industry, suggesting technical capability.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on dredging. The market for large-scale dredging services is specialized, with a limited number of major players capable of undertaking such extensive projects. The U.S. Army Corps of Engineers is a primary client for these services, investing heavily in maintaining and improving the nation's waterways and ports. Spending in this sector is driven by the need for efficient trade routes, national security, and disaster preparedness.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Given the specialized nature and scale of major dredging projects, prime contracts are typically awarded to large, experienced firms. However, opportunities may exist for small businesses to participate as subcontractors to the prime contractor, providing specialized equipment, labor, or support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Army Corps of Engineers, which manages the project and ensures compliance with contract terms and specifications. Accountability measures are embedded in the firm fixed-price contract, requiring the contractor to deliver the specified dredging services within the agreed-upon price. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for schedule delays due to weather or unforeseen site conditions.
Environmental compliance monitoring is critical throughout the project lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.3 million to GREAT LAKES DREDGE & DOCK CO, LLC. POST 45 CONTRACT 4 DREDGING OF UNCLASSIFIED MAINTENANCE AND NEW WORK MATERIAL OF CHARLESTON LOWER HARBOR, CHARLESTON SC

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 $66.3 million.

What is the period of performance?

Start: 2020-09-10. End: 2022-10-13.

What is the historical spending pattern for dredging services in Charleston Harbor by the Army Corps of Engineers?

Historical spending data for dredging in Charleston Harbor reveals a consistent need for maintenance and capital improvement projects. The Army Corps of Engineers regularly awards contracts for these services to ensure the navigability of the port, which is crucial for regional commerce and national security. While specific dollar amounts fluctuate based on project scope and urgency, the recurring nature of these awards underscores the ongoing investment required. For instance, prior to this $66.3 million contract, there have been numerous smaller and larger contracts awarded over the past decade for various dredging phases, reflecting the dynamic nature of sediment accumulation and the need for channel deepening or widening.

How does the awarded price of $66.3 million compare to similar dredging contracts for major U.S. ports?

Comparing the $66.3 million contract value for Charleston Harbor dredging requires careful consideration of project scope, volume of material, and specific technical requirements. Major port dredging projects, such as those in New York/New Jersey, Los Angeles/Long Beach, or Savannah, can range from tens of millions to hundreds of millions of dollars. For example, deepening projects in other large East Coast ports have seen contracts in similar or higher value ranges. The "unclassified material" aspect suggests standard sediment removal, which is generally less costly than dealing with contaminated materials. The firm fixed-price nature and the number of bidders (4) suggest a competitive process that likely yielded a fair market price relative to the project's scale and complexity.

What are the primary risks associated with this specific dredging contract, and how are they mitigated?

The primary risks associated with this dredging contract include potential environmental impacts, unforeseen subsurface geological conditions, and weather-related delays. Environmental risks involve managing dredged material disposal and protecting marine ecosystems, mitigated through strict adherence to environmental permits and monitoring. Unforeseen conditions, such as hard rock or buried obstructions, could increase costs and timelines, though the firm fixed-price contract places this risk primarily on the contractor. Weather, particularly during hurricane season, can cause significant delays; mitigation involves flexible scheduling and robust project management. The contractor's experience and the Army Corps of Engineers' oversight are key to managing these risks.

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

Great Lakes Dredge & Dock Co., LLC (GLDD) has a long and extensive track record of successfully performing large-scale federal dredging projects for the U.S. Army Corps of Engineers and other government agencies. They are one of the largest dredging contractors in the United States, with a fleet of specialized vessels and a deep understanding of complex marine construction. GLDD has been involved in numerous significant projects, including channel deepening, harbor maintenance, coastal restoration, and port expansions across the country. Their history includes handling projects of similar magnitude and complexity to the Charleston Harbor contract, often involving substantial volumes of material and challenging environmental conditions, suggesting a high degree of capability and reliability.

How does the 'full and open competition' aspect influence the cost-effectiveness for taxpayers?

The 'full and open competition' award strategy is designed to maximize cost-effectiveness for taxpayers by ensuring that a wide range of qualified contractors have the opportunity to bid on the contract. This broad competition typically drives down prices as contractors vie for the award, often leading to bids that are closer to the actual cost of performance plus a reasonable profit margin. Furthermore, it encourages innovation and efficiency, as contractors seek to differentiate themselves through technical approaches or cost savings. In this case, with four bidders, the government likely received a competitive price, preventing potential overpayment that might occur under less competitive procurement methods like sole-source or limited competition.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W912HP20B0003

Offers Received: 4

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: $66,420,486

Exercised Options: $66,420,486

Current Obligation: $66,296,796

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $19,092,860

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline