Navy awards $25.5M for FY19 maintenance dredging in California, a firm-fixed-price delivery order

Contract Overview

Contract Amount: $25,454,614 ($25.5M)

Contractor: Granite-Healy Tibbitts, a Joint Venture

Awarding Agency: Department of Defense

Start Date: 2019-04-25

End Date: 2021-11-05

Contract Duration: 925 days

Daily Burn Rate: $27.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF X002 ST 15-1744; CONSTRUCTION; FY19 MAINTENANCE DRED

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92136

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to GRANITE-HEALY TIBBITTS, A JOINT VENTURE for work described as: IGF::OT::IGF X002 ST 15-1744; CONSTRUCTION; FY19 MAINTENANCE DRED Key points: 1. The contract was awarded under full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type shifts cost risk to the contractor. 3. The delivery order was issued against a larger contract, indicating potential for follow-on work. 4. The contract duration of 925 days suggests a substantial scope of work. 5. The specific NAICS code (237990) points to heavy civil engineering construction, specifically dredging. 6. The award was made by the Department of the Navy, a major federal agency.

Value Assessment

Rating: fair

The total award amount is $25,454,614.09. Without specific benchmarks for dredging projects of this scale and complexity in California, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure is generally favorable for the government as it caps potential cost overruns. The number of bids received (3) is on the lower side for full and open competition, which could imply less aggressive pricing than if more bidders had participated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Three bids were received. While this indicates competition, the relatively low number of bidders might suggest that the market for this specific type of specialized dredging service is limited, or that other factors may have deterred broader participation. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: The full and open competition process is designed to ensure the government receives the best value by encouraging multiple companies to bid. However, with only three bids, taxpayers may not have benefited from the most aggressive pricing possible.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other maritime users of the affected waterways, who will benefit from maintained navigable depths. The service delivered is heavy civil engineering construction, specifically dredging to remove sediment and debris. The geographic impact is localized to California, where the dredging operations will take place. The contract supports a specialized segment of the construction workforce involved in marine engineering and dredging.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (3 bidders) may have resulted in a higher price than if more firms had competed.
The firm-fixed-price contract places the risk of cost overruns on the contractor, which could lead to quality compromises if not adequately monitored.
The specific dredging location and environmental considerations are not detailed, posing potential risks for unforeseen challenges.

Positive Signals

Awarded under full and open competition, adhering to standard procurement practices.
Firm-fixed-price contract type provides cost certainty for the government.
The contract is for essential maintenance, ensuring operational readiness of naval facilities or waterways.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on marine construction and dredging. The market for specialized dredging services can be concentrated, with a limited number of firms possessing the necessary equipment, expertise, and environmental permits. Federal spending in this area is often driven by infrastructure maintenance, port modernization, and naval operational requirements. Comparable spending benchmarks would typically be derived from other large-scale dredging contracts awarded by agencies like the Army Corps of Engineers or other naval commands.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity or joint venture, and the direct impact on the small business ecosystem for this specific award is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of the Navy contracting command. The firm-fixed-price nature of the contract means oversight focuses on ensuring the work is completed according to specifications and schedule. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Army Corps of Engineers Dredging Contracts
Naval Facilities Engineering Command Contracts
Port and Waterway Maintenance Programs
Infrastructure Improvement Projects

Risk Flags

Limited Competition
Potential for Cost Overruns (if scope changes significantly)
Contractor Performance Risk over Extended Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to GRANITE-HEALY TIBBITTS, A JOINT VENTURE. IGF::OT::IGF X002 ST 15-1744; CONSTRUCTION; FY19 MAINTENANCE DRED

Who is the contractor on this award?

The obligated recipient is GRANITE-HEALY TIBBITTS, A JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.5 million.

What is the period of performance?

Start: 2019-04-25. End: 2021-11-05.

What is the historical spending pattern for this specific contractor (GRANITE-HEALY TIBBITTS, A JOINT VENTURE) with the Department of the Navy for similar dredging services?

Analyzing the historical spending patterns for GRANITE-HEALY TIBBITTS, A JOINT VENTURE with the Department of the Navy requires access to comprehensive federal procurement databases. Without direct access to such historical data, it's difficult to provide specific figures. However, the fact that they were awarded this $25.5 million contract suggests they have a track record and capability relevant to the Navy's needs. Typically, agencies review a contractor's past performance, including their history with similar projects, contract values, and on-time delivery rates, as part of the source selection process. A review of their past performance would likely reveal if they have successfully executed similar dredging or heavy civil engineering projects for the Navy or other government agencies, and whether they have a history of cost overruns or schedule delays on such contracts. This information is crucial for assessing their reliability and the potential risk associated with this award.

How does the awarded amount of $25.5 million compare to the estimated value or budget for this FY19 maintenance dredging project?

The provided data indicates an award amount of $25,454,614.09 for the FY19 maintenance dredging. However, the data does not include the government's original estimate or budget for this project. In a full and open competition, the award amount is typically the lowest price offered by a responsible bidder that meets all the technical and performance requirements. If the award amount is significantly lower than the government's estimate, it could indicate a favorable market or effective competition. Conversely, if the award amount is close to or exceeds the estimate, it might suggest that the government's initial valuation was accurate or that market conditions were less competitive than anticipated. Without the estimated value, a direct comparison to assess potential savings or overspending is not possible. Agencies often do not publicly disclose pre-solicitation estimates to avoid influencing bidder pricing.

What are the specific risks associated with a firm-fixed-price contract for a complex project like marine dredging?

While firm-fixed-price (FFP) contracts are generally preferred by the government for cost control, they carry specific risks, especially for complex projects like marine dredging. The primary risk is that the contractor, in their effort to maintain profitability, might cut corners on quality, safety, or environmental compliance if unforeseen issues arise that increase their costs. For dredging, this could manifest as incomplete sediment removal, damage to equipment, or failure to meet stringent environmental discharge regulations. Another risk is that if the scope of work is not perfectly defined or if unforeseen site conditions (e.g., buried debris, harder-than-expected material, unexpected currents) are encountered, the contractor may seek change orders, potentially negating the cost certainty of the FFP structure. Robust government oversight and clear contract specifications are crucial to mitigate these risks and ensure the project's success.

What does the limited number of bidders (3) suggest about the market for specialized heavy civil engineering construction services like dredging?

A limited number of bidders, such as the three received for this $25.5 million dredging contract, often suggests a specialized market. This could be due to several factors: the high cost of entry (requiring significant capital investment in specialized equipment like dredges, barges, and support vessels), the need for highly skilled personnel (operators, engineers, environmental specialists), stringent regulatory and permitting requirements (especially for environmental protection), and the geographic concentration of demand. It's possible that only a few firms possess the necessary capabilities, capacity, and geographic presence to compete effectively for such projects. This market concentration can lead to less competitive pricing compared to markets with numerous potential suppliers, potentially resulting in higher costs for the government and taxpayers.

What are the potential performance implications of a 925-day contract duration for this dredging project?

A contract duration of 925 days (approximately 2.5 years) for a $25.5 million dredging project indicates a substantial undertaking. This extended timeline suggests the project likely involves a large volume of material to be removed, a significant geographic area to be dredged, or complex operational requirements. Such a long duration can have several performance implications. On the positive side, it allows for phased work, potentially accommodating environmental windows, seasonal limitations, or integration with other ongoing projects. However, it also increases the risk of scope creep, potential for contractor performance degradation over time, and the need for sustained government oversight. Furthermore, extended project timelines can be susceptible to changes in funding, regulatory requirements, or technological advancements during the performance period, all of which require careful management.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247314R0014

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 585 W BEACH ST, WATSONVILLE, CA, 95076

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

Financial Breakdown

Contract Ceiling: $25,454,614

Exercised Options: $25,454,614

Current Obligation: $25,454,614

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247316D1803

IDV Type: IDC

Timeline