Coastal Dredging Inc. awarded $21.6M for Louisiana shoreline protection, exceeding initial estimates by 5.6%

Contract Overview

Contract Amount: $21,567,508 ($21.6M)

Contractor: Coastal Dredging CO, Inc

Awarding Agency: Department of Agriculture

Start Date: 2014-10-21

End Date: 2017-05-31

Contract Duration: 953 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CWPPRA - BS-16 S. LAKE LERY SHORELINE - CONSTRUCTION; MIPR NO. W42HEM30734498

Place of Performance

Location: BRAITHWAITE, PLAQUEMINES County, LOUISIANA, 70040

State: Louisiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $21.6 million to COASTAL DREDGING CO, INC for work described as: IGF::OT::IGF CWPPRA - BS-16 S. LAKE LERY SHORELINE - CONSTRUCTION; MIPR NO. W42HEM30734498 Key points: 1. The contract's final value of $21.6 million represents a 5.6% increase over the initial estimated cost of $20.4 million. 2. Competition was robust, with 4 bidders vying for the contract, suggesting a competitive market for this type of civil engineering work. 3. The contract was awarded as a firm-fixed-price definitive contract, which typically shifts cost risk to the contractor. 4. Performance spanned over two years, indicating a substantial project duration for shoreline restoration. 5. The project falls under heavy and civil engineering construction, a sector critical for environmental protection and infrastructure resilience. 6. The contract was awarded by the Department of Agriculture's Natural Resources Conservation Service, focusing on environmental stewardship.

Value Assessment

Rating: fair

The final award of $21.6 million is approximately 5.6% higher than the initial estimated cost of $20.4 million. While some cost growth is expected in complex construction projects, this warrants scrutiny. Benchmarking against similar shoreline protection projects would provide further context on whether this price is competitive given the scope and duration. The firm-fixed-price structure suggests the contractor bore the risk of cost overruns, but the increase may indicate unforeseen complexities or scope adjustments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while full and open competition was intended, certain sources were excluded. Four bidders participated in the competition. This level of competition suggests a reasonably healthy market for this specialized service, but the exclusion of sources might limit the full potential for price discovery and innovation.

Taxpayer Impact: The exclusion of certain sources, even with four bidders, could potentially lead to higher prices for taxpayers compared to a truly open competition where all qualified sources could participate.

Public Impact

The primary beneficiaries are residents and ecosystems along the South Lake Lery shoreline in Louisiana, protected from erosion and storm surge. The project delivered critical shoreline stabilization and construction services, enhancing environmental resilience. The geographic impact is localized to the specific shoreline area in Louisiana, contributing to regional coastal protection efforts. The contract supported jobs in the heavy and civil engineering construction sector, likely involving skilled labor for dredging and construction activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns, as evidenced by the 5.6% increase from estimated to final cost.
Limited competition due to exclusion of certain sources, which could impact price competitiveness.
Contract duration of nearly three years may present challenges in maintaining consistent oversight and managing potential scope creep.

Positive Signals

Firm-fixed-price contract structure shifts cost risk to the contractor.
Multiple bidders (4) participated, indicating a degree of market interest and competition.
Project addresses critical environmental needs for shoreline protection in a vulnerable coastal 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 areas prone to natural disasters like hurricanes and erosion. The market for such specialized services can be competitive, with a mix of large and small firms capable of undertaking complex projects. Comparable spending benchmarks would typically involve looking at other Army Corps of Engineers or NRCS projects focused on similar coastal defense or restoration efforts.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. This suggests that the primary award went to a larger firm, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Natural Resources Conservation Service, potentially with support from the agency's Inspector General. The firm-fixed-price nature of the contract implies that oversight would focus on adherence to contract terms, scope, and delivery schedules rather than detailed cost auditing. Transparency is generally facilitated through contract award databases, but specific project progress reports and oversight findings may not always be publicly accessible.

Related Government Programs

Coastal Zone Management Programs
Shoreline Protection Projects
Environmental Restoration Contracts
Army Corps of Engineers Civil Works Projects
Disaster Mitigation and Infrastructure Resilience

Risk Flags

Cost Growth
Limited Competition
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $21.6 million to COASTAL DREDGING CO, INC. IGF::OT::IGF CWPPRA - BS-16 S. LAKE LERY SHORELINE - CONSTRUCTION; MIPR NO. W42HEM30734498

Who is the contractor on this award?

The obligated recipient is COASTAL DREDGING CO, INC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Natural Resources Conservation Service).

What is the total obligated amount?

The obligated amount is $21.6 million.

What is the period of performance?

Start: 2014-10-21. End: 2017-05-31.

What was the specific reason for the 5.6% cost increase from the estimated to the final contract value?

The provided data indicates a final award of $21,567,508.35 against an estimated cost that would have resulted in a 5.6% increase. While the exact reasons for this increase are not detailed in the summary data, common factors in civil engineering and construction projects include unforeseen site conditions (e.g., subsurface geology, environmental hazards), changes in material costs, scope adjustments requested by the government, or contractor-identified efficiencies that led to a revised, higher-value proposal. Without access to the contract modifications or detailed project reports, it's difficult to pinpoint the precise cause. However, a 5.6% increase on a project of this magnitude is not uncommon, especially if the initial estimates were based on preliminary assessments.

How does the number of bidders (4) compare to similar heavy and civil engineering construction contracts awarded by the NRCS?

The participation of four bidders in this contract suggests a moderately competitive environment for this specific type of heavy and civil engineering construction, particularly for shoreline protection in Louisiana. To provide a definitive comparison, one would need to analyze a broader dataset of similar NRCS contracts. Generally, for specialized construction services, a range of 3-7 bidders is often considered healthy competition. Fewer than three bidders might raise concerns about market saturation or barriers to entry, while significantly more could indicate intense competition, potentially driving prices lower. The fact that four firms submitted bids indicates that there are multiple capable contractors interested in and able to perform this work, which is a positive sign for price discovery.

What are the potential risks associated with a firm-fixed-price contract for a project of this duration and complexity?

While a firm-fixed-price (FFP) contract is designed to shift cost risk to the contractor, risks remain, particularly for long-duration and complex projects like shoreline construction. For the government, the primary risk is that the contractor may cut corners on quality or safety to maintain profitability if unforeseen challenges arise, although quality assurance measures should mitigate this. The contractor bears the risk of cost overruns due to poor estimation, inefficient execution, or unexpected increases in labor and material costs. For a project spanning nearly three years (953 days duration), there's also a risk of scope creep if not managed tightly, potentially leading to change orders that increase the price. Furthermore, if the initial FFP was set too low due to intense competition, the contractor might face financial distress, impacting project completion.

What is the historical spending pattern for shoreline protection projects by the Department of Agriculture's NRCS?

Analyzing historical spending patterns for shoreline protection projects by the NRCS requires access to historical contract databases and budget allocations. The NRCS focuses on conservation and natural resource management, and shoreline protection aligns with its mission, particularly in areas affected by erosion and sea-level rise. Spending in this area can fluctuate based on federal appropriations, disaster recovery needs, and specific program priorities. Projects like the South Lake Lery Shoreline initiative are likely part of broader efforts to address coastal land loss. To understand the pattern, one would examine the number and value of similar contracts awarded annually, the geographic distribution of these funds, and any trends in project scope or cost over time.

How does the exclusion of sources in the competition impact the potential for innovation and cost savings for taxpayers?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause indicates that while the competition was intended to be open, certain potential bidders were deliberately excluded. The impact on innovation and cost savings can be significant. Excluding sources, especially if those sources possess unique technologies, specialized expertise, or more efficient methodologies, can limit the range of solutions considered. This restriction might prevent the government from accessing potentially more cost-effective or innovative approaches that could have been brought forward by the excluded firms. For taxpayers, this means a potentially reduced opportunity for achieving the best possible value, as the competitive pressure might be less intense than if all qualified firms were allowed to participate.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 330 BAYOU LIBERTY RD, SLIDELL, LA, 70458

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,567,508

Exercised Options: $21,567,508

Current Obligation: $21,567,508

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline