Department of Defense awards $47.3M contract for dune and beach sand fill to Callan Marine Limited

Contract Overview

Contract Amount: $47,254,357 ($47.3M)

Contractor: Callan Marine Limited

Awarding Agency: Department of Defense

Start Date: 2023-08-15

End Date: 2025-04-09

Contract Duration: 603 days

Daily Burn Rate: $78.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DUNE AND BEACH SAND FILL

Place of Performance

Location: GRAND ISLE, JEFFERSON County, LOUISIANA, 70358

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $47.3 million to CALLAN MARINE LIMITED for work described as: DUNE AND BEACH SAND FILL Key points: 1. Contract value appears reasonable given the scope of coastal restoration and protection services. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Contract duration of approximately 20 months indicates a significant, ongoing project. 4. The project's location in Louisiana highlights its importance for coastal resilience in a vulnerable region. 5. Fixed-price contract type shifts cost risk to the contractor, potentially stabilizing final expenditure. 6. The award to a single contractor for this specific scope suggests specialized capabilities are required.

Value Assessment

Rating: good

The contract value of $47.3 million for dune and beach sand fill is substantial, reflecting the scale of coastal engineering projects. Benchmarking against similar large-scale coastal restoration efforts would provide a clearer picture of value for money. However, the firm fixed-price nature of the contract suggests that the contractor assumes cost overruns, which can be a positive indicator for the government if the scope is well-defined. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging without further context on the quantity and quality of sand fill required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specialized construction service. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price comparison and selection. The government's ability to select the best value offer from these three is a positive outcome of the competitive process.

Taxpayer Impact: Full and open competition increases the likelihood that taxpayer funds are used efficiently by fostering a competitive environment that encourages lower bids and better service offerings.

Public Impact

Residents and businesses in coastal Louisiana will benefit from enhanced storm surge protection and reduced erosion. The project will deliver critical dune and beach sand fill to bolster natural defenses against coastal hazards. Geographic impact is concentrated in Louisiana, a state highly susceptible to the effects of hurricanes and sea-level rise. The project is expected to support local construction jobs and potentially related industries during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial sand fill requirements are not precisely defined.
Environmental impact assessments and mitigation strategies are crucial for large-scale dredging and fill operations.
Ensuring the long-term effectiveness and stability of the placed sand fill requires careful engineering and monitoring.

Positive Signals

Firm fixed-price contract mitigates budget uncertainty for the government.
Full and open competition suggests a robust selection process.
Project addresses critical coastal resilience needs in a high-risk area.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on coastal protection and restoration. This sector is vital for infrastructure development and environmental resilience, particularly in regions prone to natural disasters. The market for such services is often characterized by specialized firms with significant equipment and expertise in dredging, marine construction, and environmental compliance. Comparable spending benchmarks would typically involve looking at other Army Corps of Engineers or FEMA-funded coastal projects, which can range from tens to hundreds of millions of dollars depending on scale and complexity.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside requirement for this contract (sb: false). Given the large dollar value and specialized nature of coastal construction, it is likely that any small business involvement would be through subcontracting opportunities. The prime contractor, Callan Marine Limited, would need to manage its supply chain effectively. The impact on the small business ecosystem depends on whether Callan Marine actively seeks out and integrates small businesses for specific components or services, which is not detailed here.

Oversight & Accountability

Oversight for this Department of Defense contract will likely be managed by the contracting officer and program managers within the relevant Army command. The firm fixed-price nature of the contract provides a degree of financial oversight by capping the government's liability. Transparency is generally maintained through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or closeout.

Related Government Programs

Army Corps of Engineers Coastal Navigation Projects
FEMA Hazard Mitigation Grants Program
State-level Coastal Restoration Initiatives
Beach Nourishment Projects

Risk Flags

Potential environmental impact of dredging and fill operations.
Weather-related delays, particularly during hurricane season.
Ensuring long-term stability and effectiveness of sand fill.
Accuracy and completeness of initial site surveys and geotechnical data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.3 million to CALLAN MARINE LIMITED. DUNE AND BEACH SAND FILL

Who is the contractor on this award?

The obligated recipient is CALLAN MARINE LIMITED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $47.3 million.

What is the period of performance?

Start: 2023-08-15. End: 2025-04-09.

What is the historical track record of Callan Marine Limited with the Department of Defense and similar coastal projects?

Callan Marine Limited has a history of performing marine construction and dredging services. Their past performance with the Department of Defense and other federal agencies, particularly on projects involving beach nourishment, dune restoration, and dredging, would be a key factor in their selection for this $47.3 million contract. Reviewing their contract history, including any past performance evaluations, award fees, or documented issues on previous projects, is essential for a comprehensive risk assessment. Information on their experience with projects of similar scale and complexity in the Gulf Coast region would be particularly relevant to understanding their capability to execute this specific requirement effectively and on time.

How does the awarded price of $47.3 million compare to similar dune and beach sand fill projects in the Gulf Coast region?

Benchmarking the $47.3 million award against similar dune and beach sand fill projects requires access to detailed cost data from comparable contracts. Factors such as the volume of sand to be placed, the distance of haulage, the type of sand, the complexity of the site (e.g., accessibility, environmental sensitivities), and the duration of the project all influence cost. Projects funded by the Army Corps of Engineers or state agencies in states like Louisiana, Texas, Mississippi, Alabama, and Florida that involve significant sand placement for coastal resilience could serve as comparators. Without specific metrics like cost per cubic yard of sand placed or cost per linear foot of shoreline restored, a precise value-for-money assessment is difficult. However, the firm fixed-price nature suggests the government has negotiated a price deemed acceptable based on available market data and the contractor's proposal.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential environmental impacts from dredging and sand placement, unforeseen subsurface conditions at the fill sites, weather disruptions (especially during hurricane season), and ensuring the long-term stability and effectiveness of the placed sand. Mitigation strategies likely involve thorough environmental impact assessments and adherence to strict environmental permits, detailed geotechnical surveys prior to work commencement, flexible scheduling to account for weather, and robust engineering designs for the fill placement to ensure durability. The firm fixed-price contract also mitigates financial risk for the government, shifting cost overrun risks to the contractor, provided the scope is well-defined and change orders are managed judiciously.

How effective is the firm fixed-price contract type in ensuring program effectiveness and controlling costs for this project?

The firm fixed-price (FFP) contract type is generally effective in controlling costs for projects with well-defined scopes, such as dune and beach sand fill operations. It incentivizes the contractor to manage their costs efficiently to maximize profit, as they bear the risk of cost overruns. This can lead to greater cost certainty for the government. For program effectiveness, the FFP contract relies heavily on clear and comprehensive contract specifications regarding the quantity, quality, and placement of sand, as well as performance standards. If these are well-defined, the FFP structure supports effectiveness by ensuring the contractor meets the specified deliverables. However, if the scope is ambiguous or unforeseen issues arise, managing change orders under an FFP contract can become complex and potentially lead to disputes or impact the schedule.

What is the historical spending pattern for dune and beach sand fill projects by the Department of Defense or Army Corps of Engineers in Louisiana?

The Department of Defense, primarily through the U.S. Army Corps of Engineers (USACE), has a significant history of funding and executing dune and beach sand fill projects, particularly in coastal states like Louisiana, which faces substantial erosion and storm surge risks. Historical spending patterns reveal a consistent need for these types of projects, often driven by post-hurricane recovery efforts and long-term coastal resilience strategies. Funding levels can fluctuate annually based on congressional appropriations, disaster declarations, and competing infrastructure priorities. Projects in Louisiana have historically involved substantial investments, sometimes reaching tens or even hundreds of millions of dollars for large-scale, multi-year initiatives aimed at restoring critical coastal barrier islands and shorelines. This $47.3 million award aligns with the ongoing commitment to addressing Louisiana's coastal land loss.

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: W912P823B0022

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6800 HARBORSIDE DR, GALVESTON, TX, 77554

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,254,357

Exercised Options: $47,254,357

Current Obligation: $47,254,357

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline