Army awards $25M for Mississippi River dredging, exceeding initial cost estimates by over $17M
Contract Overview
Contract Amount: $25,075,000 ($25.1M)
Contractor: Weeks Marine, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-06-15
End Date: 2013-05-01
Contract Duration: 320 days
Daily Burn Rate: $78.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: MS RIVER, BR TO THE GULF, HEAD OF PASSES HOPPER DREDGE DISPOSAL AREA PROJECT, PLAQUEMINES PARISH, LOUISIANA (ED 12-008)
Place of Performance
Location: PORT SULPHUR, PLAQUEMINES County, LOUISIANA, 70083
Plain-Language Summary
Department of Defense obligated $25.1 million to WEEKS MARINE, INC. for work described as: MS RIVER, BR TO THE GULF, HEAD OF PASSES HOPPER DREDGE DISPOSAL AREA PROJECT, PLAQUEMINES PARISH, LOUISIANA (ED 12-008) Key points: 1. Contract value significantly surpassed the initial estimate, indicating potential cost overruns or scope changes. 2. The project involved a single awardee, raising questions about the extent of competition and potential price impacts. 3. A high number of bidders (78) suggests strong market interest, but the final award price needs scrutiny. 4. The contract duration of 320 days was met, but performance details beyond completion are not provided. 5. This project falls within the heavy civil engineering construction sector, a critical area for infrastructure maintenance. 6. The fixed-price contract type aims to control costs, but the final price exceeded initial projections.
Value Assessment
Rating: questionable
The final award price of $25,075,000 is substantially higher than the initial estimate of $7,835,900, representing a nearly 220% increase. While the contract was awarded under full and open competition, the significant deviation from the estimate warrants further investigation into the reasons for the cost escalation. Without more detailed cost breakdowns or comparisons to similar dredging projects in the region, it is difficult to definitively assess value for money. However, the magnitude of the increase suggests potential inefficiencies or unforeseen challenges.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with 78 bids received. The high number of bidders indicates a competitive market for this type of dredging service. However, the substantial difference between the initial estimate and the final award price, despite robust competition, may suggest that the initial estimate was not realistic or that unforeseen factors significantly drove up costs during the bidding or execution phases.
Taxpayer Impact: The extensive competition suggests that taxpayers benefited from a wide range of potential providers, which typically drives down prices. However, the final cost exceeding initial projections means taxpayers ultimately paid more than anticipated.
Public Impact
The project directly benefits the U.S. Army Corps of Engineers by maintaining critical navigation channels. Services delivered include dredging of the Mississippi River, essential for waterborne commerce and transportation. The geographic impact is focused on Plaquemines Parish, Louisiana, a key area for port operations. The project supports the maritime and construction workforce involved in heavy civil engineering.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Significant cost increase from initial estimate to final award price.
- Lack of detailed justification for the substantial cost escalation.
- Unclear if the final price reflects true market value given the estimate discrepancy.
Positive Signals
- Awarded under full and open competition, indicating a broad market solicitation.
- High number of bids received (78), suggesting significant industry interest and potential for competitive pricing.
- Contract completed within the specified duration (320 days).
Sector Analysis
This contract falls within the Heavy and Civil Engineering Construction sector, specifically related to port and waterway infrastructure. The market for dredging services is specialized, involving significant capital investment in equipment and expertise. Comparable spending benchmarks would involve other Army Corps of Engineers projects for river and harbor maintenance, as well as similar projects undertaken by state or local port authorities. The size of this contract is moderate within the context of large-scale civil engineering projects.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature and scale of major dredging projects, prime contracts are often awarded to larger firms. However, it is possible that the prime contractor, Weeks Marine, Inc., may have utilized small businesses for subcontracting opportunities, though this information is not detailed in the provided data.
Oversight & Accountability
The U.S. Army Corps of Engineers typically has robust oversight mechanisms for its construction and maintenance projects, including quality assurance and progress monitoring. Inspector General (IG) jurisdiction would likely apply to investigate any potential fraud, waste, or abuse. Transparency is generally maintained through contract award databases and public reporting, although detailed cost justifications for significant estimate variances may not always be readily accessible.
Related Government Programs
- Army Corps of Engineers Civil Works Programs
- Mississippi River Channel Maintenance
- Port and Waterway Infrastructure Projects
- Coastal and Harbor Dredging Contracts
Risk Flags
- Cost Overrun Risk
- Estimation Accuracy Concern
- Potential for Unforeseen Conditions
Tags
construction, department-of-defense, department-of-the-army, definitive-contract, firm-fixed-price, full-and-open-competition, heavy-civil-engineering, louisiana, mississippi-river, plaquemines-parish, dredging, infrastructure
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.1 million to WEEKS MARINE, INC.. MS RIVER, BR TO THE GULF, HEAD OF PASSES HOPPER DREDGE DISPOSAL AREA PROJECT, PLAQUEMINES PARISH, LOUISIANA (ED 12-008)
Who is the contractor on this award?
The obligated recipient is WEEKS MARINE, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $25.1 million.
What is the period of performance?
Start: 2012-06-15. End: 2013-05-01.
What were the primary factors contributing to the significant cost increase from the initial estimate to the final award price?
The substantial increase from the initial estimate ($7.8 million) to the final award price ($25.1 million) for the Mississippi River dredging project suggests several potential contributing factors. These could include unforeseen subsurface conditions encountered during the bidding or execution phases, such as harder-than-expected materials requiring specialized equipment or more extensive work. Changes in project scope or requirements after the initial estimate was formulated could also be a reason. Furthermore, market fluctuations in fuel, labor, or material costs between the estimate date and the award date could have driven up prices. It's also possible the initial estimate was overly optimistic or did not fully account for all project complexities. Without detailed documentation from the Army Corps of Engineers, pinpointing the exact reasons remains speculative, but a combination of these factors is likely.
How does the final award price of $25.1 million compare to similar dredging projects managed by the Army Corps of Engineers in the Gulf region?
Comparing the $25.1 million award price requires context regarding the scope, duration, and specific location of similar dredging projects. Dredging costs are highly variable, influenced by factors such as the volume of material removed, the type of material (e.g., sand, silt, rock), the distance material must be transported for disposal, and the specific environmental regulations applicable to the disposal site. Projects involving maintenance dredging of established channels might be less costly per cubic yard than capital dredging for new channels or significant expansions. To provide a precise comparison, one would need to analyze data from other Army Corps projects in Louisiana and surrounding Gulf states, normalizing for factors like cubic yards dredged, project duration, and complexity. However, given the nearly 220% increase over the initial estimate for this project, it suggests that either this project was particularly complex or costly, or the initial estimate was significantly understated.
What is the track record of Weeks Marine, Inc. in executing large-scale Army Corps of Engineers dredging contracts?
Weeks Marine, Inc. has a significant history of performing dredging and marine construction work for the U.S. Army Corps of Engineers and other federal agencies. They are a well-established company in the marine construction industry, known for operating large hopper dredges and performing complex projects. Their track record typically includes successful completion of numerous channel maintenance and deepening projects across various U.S. waterways. While specific performance metrics for every contract are not publicly detailed, their continued selection for major projects by the Corps suggests a generally reliable performance history. However, like any large contractor, there may have been instances of cost adjustments or schedule modifications on past projects, which are common in the inherently variable nature of marine construction.
What are the potential risks associated with a contract where the final price significantly exceeds the initial estimate?
A significant cost overrun from the initial estimate to the final award price presents several risks. Firstly, it raises concerns about the accuracy of the initial cost estimation process, potentially indicating flawed planning or insufficient data gathering by the procuring agency. Secondly, it can signal potential inefficiencies or unexpected challenges during project execution that may have driven up costs beyond what was anticipated, impacting the overall value for money. Thirdly, such discrepancies can lead to budget overruns for the agency, potentially diverting funds from other critical projects or requiring additional appropriations. Finally, it can erode public and congressional confidence in the government's ability to manage large-scale projects effectively and cost-efficiently. For taxpayers, it means the project ultimately cost more than initially planned.
How does the 'full and open competition' with 78 bidders reconcile with the substantial cost increase over the initial estimate?
The reconciliation between robust competition (78 bidders) and a significant cost increase over the initial estimate lies in understanding the difference between an 'estimate' and a 'bid price,' and the factors influencing both. An initial estimate is the government's projection of likely costs, often made early in the planning process and potentially based on limited information or preliminary scope. A bid price is what contractors are willing to perform the work for, based on their assessment of the scope, risks, and market conditions. The high number of bidders suggests the market was competitive and contractors saw an opportunity. However, if the initial estimate was significantly understated, or if unforeseen conditions or market shifts occurred between the estimate and the bids, the competitive bids could still result in a price much higher than the original government projection. The competition ensured a fair market price was sought, but the market price turned out to be substantially higher than the initial government guess.
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: W912P812B0028
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Weeks Marine Inc (UEI: 044665230)
Address: 304 GAILLE DR, COVINGTON, LA, 70433
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,075,000
Exercised Options: $25,075,000
Current Obligation: $25,075,000
Subaward Activity
Number of Subawards: 56
Total Subaward Amount: $6,299,592
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-06-15
Current End Date: 2013-05-01
Potential End Date: 2013-05-01 00:00:00
Last Modified: 2020-09-28
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