Army awards $33.3M dredging contract to Great Lakes Dredge & Dock Co. for Texas channel improvements

Contract Overview

Contract Amount: $33,260,367 ($33.3M)

Contractor: Great Lakes Dredge & Dock CO, LLC

Awarding Agency: Department of Defense

Start Date: 2023-04-20

End Date: 2024-04-16

Contract Duration: 362 days

Daily Burn Rate: $91.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY23 USACE GALVESTON DISTRICT, GALVESTON ENTRANCE CHANNEL AND HSC BOLIVAR TO REDFISH HOPPER DREDGING GALVESTON HARBOR AND HOUSTON SHIP CHANNEL, GALVESTON COUNTY, TEXAS.

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77024

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $33.3 million to GREAT LAKES DREDGE & DOCK CO, LLC for work described as: FY23 USACE GALVESTON DISTRICT, GALVESTON ENTRANCE CHANNEL AND HSC BOLIVAR TO REDFISH HOPPER DREDGING GALVESTON HARBOR AND HOUSTON SHIP CHANNEL, GALVESTON COUNTY, TEXAS. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's value of $33.3M falls within a moderate spending range for large-scale civil engineering projects. 3. Fixed-price contract type may limit cost overruns for the government. 4. The project addresses critical infrastructure needs for the Houston Ship Channel, a vital economic artery. 5. Dredging operations are essential for maintaining navigation depths and ensuring efficient maritime commerce. 6. The contractor, Great Lakes Dredge & Dock Co., is a significant player in the dredging industry.

Value Assessment

Rating: good

The contract value of $33.3 million for hopper dredging appears reasonable given the scope of work involving the Galveston Entrance Channel and Houston Ship Channel. Benchmarking against similar large-scale dredging projects indicates that costs can range significantly based on volume, complexity, and environmental considerations. The firm fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor. Without specific per-unit cost data (e.g., cost per cubic yard dredged), a precise value-for-money assessment is challenging, but the competitive award suggests a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bidders, as indicated by the 'no' field, suggests a moderate level of competition for this significant civil engineering project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions. However, the specialized nature of large-scale dredging may limit the pool of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives the best value for its investment in critical infrastructure.

Public Impact

The primary beneficiaries are maritime industries and businesses relying on the Houston Ship Channel for trade and commerce. The project will ensure adequate navigation depths, facilitating the movement of goods and raw materials. Geographic impact is concentrated in Galveston County, Texas, specifically along the Galveston Entrance Channel and Houston Ship Channel. The project supports the workforce within the maritime and heavy civil engineering construction sectors, potentially creating or sustaining jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays due to weather or unforeseen subsurface conditions impacting dredging operations.
Environmental compliance during dredging activities requires careful monitoring to prevent ecological disruption.
The specialized nature of dredging equipment and expertise may limit the number of competitive bidders in the long term.

Positive Signals

The firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a competitive bidding process.
The project addresses critical U.S. maritime infrastructure, supporting economic activity.
The contractor, Great Lakes Dredge & Dock Co., has extensive experience in large-scale dredging projects.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on maritime infrastructure. The dredging market is specialized, with a limited number of large firms capable of undertaking projects of this scale. The Houston Ship Channel is a critical component of the U.S. transportation network, and its maintenance through dredging is a recurring need. Spending on such projects is often driven by federal infrastructure investment priorities and the need to maintain navigability for commerce.

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 large-scale hopper dredging, it is common for prime contracts to be awarded to large, experienced firms. The impact on the small business ecosystem would likely be indirect, through potential opportunities for smaller suppliers or service providers to the prime contractor, rather than direct set-aside awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers (USACE), Galveston District, which awarded the contract. Accountability measures are inherent in the contract terms, including performance standards and payment schedules tied to progress. Transparency is facilitated through contract award databases and public reporting requirements. The USACE has internal oversight mechanisms and may engage with the Inspector General's office for audits or investigations if concerns arise.

Related Government Programs

US Army Corps of Engineers Civil Works Programs
Port Infrastructure Development Program
National Defense Authorization Act (NDAA) appropriations for infrastructure
Infrastructure Investment and Jobs Act (IIJA) funded projects

Risk Flags

Potential for environmental impact during dredging operations.
Risk of schedule delays due to weather or unforeseen site conditions.
Dependence on specialized, high-cost equipment and experienced personnel.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.3 million to GREAT LAKES DREDGE & DOCK CO, LLC. FY23 USACE GALVESTON DISTRICT, GALVESTON ENTRANCE CHANNEL AND HSC BOLIVAR TO REDFISH HOPPER DREDGING GALVESTON HARBOR AND HOUSTON SHIP CHANNEL, GALVESTON COUNTY, TEXAS.

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 $33.3 million.

What is the period of performance?

Start: 2023-04-20. End: 2024-04-16.

What is the historical spending trend for dredging services by the U.S. Army Corps of Engineers, specifically for the Houston Ship Channel and Galveston Harbor?

Analyzing historical spending for dredging by the U.S. Army Corps of Engineers (USACE) on the Houston Ship Channel and Galveston Harbor reveals a consistent need for maintenance and improvement. While specific figures for this exact contract's scope vary year to year based on project cycles and funding allocations, the USACE dedicates substantial resources annually to maintaining the navigability of critical waterways like the Houston Ship Channel. For instance, in recent fiscal years, USACE has awarded numerous contracts for dredging along this vital corridor, often in the tens to hundreds of millions of dollars cumulatively. These expenditures are driven by the channel's immense economic importance as a major U.S. port and the natural sedimentation processes that require regular removal. Factors influencing year-to-year spending include the urgency of maintenance, capital improvement projects, and the availability of federal appropriations, often influenced by broader infrastructure legislation and budget cycles. The $33.3 million awarded in FY23 represents a significant, but not unprecedented, investment in this ongoing infrastructure requirement.

How does the per-cubic-yard cost of this dredging contract compare to other similar projects awarded by the USACE in the last two years?

A precise per-cubic-yard cost comparison for this specific contract is not feasible with the provided data, as the total contract value ($33.3 million) and duration (362 days) do not include the total volume of material to be dredged. However, general industry benchmarks for hopper dredging in similar U.S. port environments can range from approximately $15 to $50 per cubic yard, depending heavily on factors such as material type (sand, silt, clay), disposal methods (upland, open water, beneficial use), project complexity, and environmental mitigation requirements. To conduct a thorough comparison, one would need to obtain the estimated dredging volume from the contract's technical specifications or award documents. Without this volume, benchmarking the value-for-money on a per-unit basis remains speculative. Future analysis could involve comparing this contract's unit cost, once determined, against publicly available data for other USACE dredging contracts of comparable scope and location.

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

Great Lakes Dredge & Dock Co. (GLDD) has a long and extensive track record of performing large-scale federal dredging contracts, particularly for the U.S. Army Corps of Engineers (USACE). As one of the largest dredging contractors in the United States, GLDD has been involved in numerous significant projects across the country, including major port deepening and maintenance dredging operations. Their portfolio includes contracts for critical waterways such as the Port of New York and New Jersey, Corpus Christi Ship Channel, and various projects along the Atlantic, Gulf, and Pacific coasts. GLDD possesses a substantial fleet of hopper dredges, cutter suction dredges, and other specialized equipment necessary for complex projects. Their history includes successful completion of contracts involving substantial volumes of material, challenging environmental conditions, and tight deadlines. While specific performance metrics for every contract are not always publicly detailed, their consistent ability to win and execute large federal contracts indicates a strong operational capacity and a generally positive performance history with agencies like the USACE.

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

The primary risks associated with this dredging project include potential environmental impacts, schedule delays due to weather or unforeseen subsurface conditions, and the inherent complexities of operating large dredging equipment in a busy maritime environment. Environmental risks involve the potential disturbance of sensitive habitats, management of dredged material, and compliance with water quality standards. Mitigation strategies typically involve rigorous environmental monitoring, adherence to approved disposal plans, and the use of best management practices. Schedule risks are managed through careful planning, contingency allowances for weather, and the contractor's experience in navigating such challenges. Operating in a high-traffic channel like the Houston Ship Channel presents navigational risks, which are mitigated through strict adherence to maritime safety regulations, communication protocols with vessel traffic services, and potentially phased dredging operations. The firm fixed-price contract structure also shifts some financial risk related to cost overruns to the contractor, incentivizing efficient project execution.

How does the current contract value compare to the total federal spending on dredging and related maritime infrastructure over the past five fiscal years?

The current contract value of $33.3 million for the Galveston Entrance Channel and Houston Ship Channel dredging is a significant single award but represents a portion of the overall federal spending on dredging and maritime infrastructure. Over the past five fiscal years (FY19-FY23), federal spending on dredging, primarily executed by the U.S. Army Corps of Engineers (USACE), has typically ranged in the hundreds of millions to over a billion dollars annually, depending on appropriations and the scale of major capital projects. This includes funding for maintenance dredging, channel deepening, and new construction. Major ports and waterways across the country receive consistent investment. Therefore, while this $33.3 million contract is substantial for a single project, it fits within the broader pattern of consistent, significant federal investment required to maintain and improve the nation's vital maritime transportation system. The total federal outlay for such infrastructure is influenced by economic needs, national security considerations, and legislative priorities like infrastructure bills.

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: W912HY23B0007

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Great Lakes Dredge & Dock Corporation

Address: 9811 KATY FWY STE 1200, HOUSTON, TX, 77024

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: $38,676,117

Exercised Options: $33,260,367

Current Obligation: $33,260,367

Actual Outlays: $8,994,415

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline