Army awards $219M dredging contract for Sabine-Neches Waterway, boosting Texas port infrastructure

Contract Overview

Contract Amount: $219,108,350 ($219.1M)

Contractor: Great Lakes Dredge & Dock CO, LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-20

End Date: 2027-04-04

Contract Duration: 926 days

Daily Burn Rate: $236.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY 24 UNRESTRICTED PROCUREMENT, SABINE-NECHES WATERWAY CHANNEL IMPROVEMENT PROJECT (SNWWCIP), TX SABINE EXTENSION CHANNEL TO SABINE PASS OUTER BAR, JETTY CHANNEL, SABINE PASS, HOPPER DREDGING, IN JEFFERSON COUNTY, TEXAS

Place of Performance

Location: PORT ARTHUR, JEFFERSON County, TEXAS, 77640

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $219.1 million to GREAT LAKES DREDGE & DOCK CO, LLC for work described as: FY 24 UNRESTRICTED PROCUREMENT, SABINE-NECHES WATERWAY CHANNEL IMPROVEMENT PROJECT (SNWWCIP), TX SABINE EXTENSION CHANNEL TO SABINE PASS OUTER BAR, JETTY CHANNEL, SABINE PASS, HOPPER DREDGING, IN JEFFERSON COUNTY, TEXAS Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type aims to control costs for the government. 3. Project duration of 926 days indicates a significant, long-term infrastructure undertaking. 4. The contract is for hopper dredging, a critical component of maintaining navigable waterways. 5. Awarded by the Department of the Army, aligning with national defense and infrastructure priorities. 6. The project is located in Jefferson County, Texas, impacting regional economic activity.

Value Assessment

Rating: good

The awarded amount of $219.1 million for this dredging project appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, large-scale civil engineering construction projects of this nature often involve substantial investment. The firm-fixed-price contract type suggests an effort to establish a clear cost ceiling, which is a positive indicator for value. Benchmarking against similar waterway maintenance and improvement contracts would provide further insight into its cost-effectiveness.

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 two bidders (no: 2) suggests a moderate level of competition for this specialized service. While two bidders are better than one, a higher number of bids could potentially lead to more aggressive pricing and a stronger demonstration of market competitiveness.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple companies to vie for the contract, which can drive down prices and ensure the government receives the best value for its investment.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and the maritime industry relying on the Sabine-Neches Waterway. Services delivered include hopper dredging to maintain and improve channel depth and navigability. The geographic impact is concentrated in Jefferson County, Texas, and the surrounding port facilities. Workforce implications include employment opportunities for skilled labor in the dredging and construction sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen geological conditions are encountered during dredging.
Dependence on specialized dredging equipment and skilled labor, which may have limited availability.
Environmental compliance requirements could add complexity and potential delays to the project timeline.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive market for these services.
The project addresses critical infrastructure needs for a major U.S. waterway.
Experienced contractor likely to manage project effectively.
Long-term contract duration allows for phased execution and resource planning.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically related to port and waterway infrastructure. The market for large-scale dredging services is specialized, often dominated by a few key players due to the significant capital investment required for specialized vessels and equipment. Spending in this sector is driven by the need to maintain and upgrade critical transportation arteries, supporting trade and economic activity. Comparable spending benchmarks would typically involve other major port deepening or maintenance projects across the nation.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). Given the specialized nature and scale of hopper dredging, it is common for such contracts to be awarded to larger firms with the necessary equipment and expertise. There is no explicit information on subcontracting plans for small businesses, but it is possible that the prime contractor may engage small businesses for support services.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Army Corps of Engineers, which is responsible for managing waterway infrastructure projects. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified dredging services within the agreed-upon price. Transparency is generally maintained through contract award announcements and public reporting of federal spending, though detailed project progress reports may be internal.

Related Government Programs

US Army Corps of Engineers Civil Works Programs
Inland Waterways Trust Fund
Port Infrastructure Development Program
National Defense Authorization Act appropriations for infrastructure

Risk Flags

Potential for unforeseen subsurface conditions
Environmental compliance challenges
Weather-related delays
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $219.1 million to GREAT LAKES DREDGE & DOCK CO, LLC. FY 24 UNRESTRICTED PROCUREMENT, SABINE-NECHES WATERWAY CHANNEL IMPROVEMENT PROJECT (SNWWCIP), TX SABINE EXTENSION CHANNEL TO SABINE PASS OUTER BAR, JETTY CHANNEL, SABINE PASS, HOPPER DREDGING, IN JEFFERSON 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 $219.1 million.

What is the period of performance?

Start: 2024-09-20. End: 2027-04-04.

What is the historical spending pattern for Sabine-Neches Waterway dredging projects?

Historical spending on Sabine-Neches Waterway dredging projects can be substantial, reflecting the ongoing need for maintenance and improvement of this critical port. While specific figures for past dredging efforts require detailed database queries, the Army Corps of Engineers consistently allocates significant funds to maintain and deepen channels across the nation. Projects like the Sabine Extension Channel and hopper dredging are recurring necessities due to natural sedimentation and the demand for larger vessel capacity. Analyzing past contracts for similar scope and duration would reveal trends in cost escalation, contractor performance, and the frequency of such maintenance activities, providing context for the current $219 million award.

How does the awarded amount compare to similar large-scale dredging contracts?

Comparing the $219.1 million award for the Sabine-Neches Waterway project to similar large-scale dredging contracts requires access to a comprehensive database of federal procurements. However, major channel deepening and maintenance projects, especially those involving hopper dredging in significant ports, often run into the tens or hundreds of millions of dollars. For instance, projects in the Port of New York and New Jersey, or the Port of Los Angeles, have seen similar or even larger investments for dredging. The firm-fixed-price nature of this contract is a positive factor, aiming to cap costs. The number of bidders (two) suggests a competitive but potentially concentrated market for such specialized, high-value work.

What are the key performance indicators (KPIs) for this dredging contract?

Key performance indicators for this dredging contract would likely focus on the successful completion of the specified dredging work within the defined channel areas and to the required depths and widths. This includes meeting project milestones, adhering to the schedule (926 days), and maintaining the operational efficiency of the dredging equipment. Environmental compliance, such as adherence to regulations regarding spoil disposal and protection of marine life, would also be critical. Furthermore, the quality of the dredged material removal and the resulting channel condition, verified by surveys, are paramount. The contractor's ability to manage costs effectively under the firm-fixed-price structure is also an implicit KPI.

What is the track record of Great Lakes Dredge & Dock Co, LLC with the Department of the Army?

Great Lakes Dredge & Dock Co, LLC (GLDD) has a significant and long-standing track record with the Department of the Army, particularly the U.S. Army Corps of Engineers, for dredging and marine construction projects. As one of the largest dredging contractors in the United States, GLDD has been awarded numerous contracts for channel maintenance, deepening, and coastal protection projects nationwide. Their experience spans a wide range of complexities, including hopper dredging, pipeline dredging, and environmental restoration. Reviewing their past performance on similar Army Corps projects would indicate their capability in managing large-scale, technically demanding undertakings, meeting schedules, and adhering to contract requirements, which is crucial for assessing the risk associated with this new award.

What are the potential risks associated with this specific dredging project?

Potential risks associated with this specific dredging project include encountering unforeseen subsurface conditions (e.g., hard rock, debris, or hazardous materials) that could increase costs and extend the schedule, despite the firm-fixed-price contract. Environmental risks are also significant, such as discovering protected species or habitats, or facing challenges with permitted spoil disposal sites, which could lead to delays or require costly mitigation measures. Operational risks involve the potential for equipment breakdown or weather-related disruptions, particularly during hurricane season in the Gulf Coast region. Lastly, there's a risk related to the limited competition (two bidders), which might imply less downward pressure on pricing than a more robustly competed contract.

How does this contract contribute to the broader goals of the Sabine-Neches Waterway?

This contract directly contributes to the broader goals of the Sabine-Neches Waterway by ensuring its continued navigability and capacity to accommodate larger vessels. The Sabine-Neches Waterway is a vital artery for the U.S. energy sector and international trade, handling a significant volume of petrochemicals, petroleum products, and other commodities. Maintaining and improving channel depth through hopper dredging allows for more efficient and cost-effective movement of goods, reducing transportation costs and enhancing the competitiveness of industries located along the waterway. This project supports the economic vitality of the region and strengthens the nation's energy infrastructure and supply chain resilience.

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: W912HY24B0021

Offers Received: 2

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: $235,422,810

Exercised Options: $219,108,350

Current Obligation: $219,108,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline