DoD awards $36.9M contract for St. Paul Harbor dredging, with Western Marine Construction Inc. selected

Contract Overview

Contract Amount: $36,910,000 ($36.9M)

Contractor: Western Marine Construction, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-21

End Date: 2027-10-31

Contract Duration: 1,166 days

Daily Burn Rate: $31.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DREDGING ST PAUL HARBOR, ST PAUL ISLAND ALASKA

Place of Performance

Location: SAINT PAUL ISLAND, ALEUTIANS WEST County, ALASKA, 99660

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to WESTERN MARINE CONSTRUCTION, INC. for work described as: DREDGING ST PAUL HARBOR, ST PAUL ISLAND ALASKA Key points: 1. Contract value appears reasonable for specialized marine construction, though specific benchmarks are needed. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Contract duration of nearly 4 years indicates a significant, long-term project. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. Project located in Alaska presents logistical challenges that may influence overall cost and execution. 6. The contract falls under 'Other Heavy and Civil Engineering Construction,' a broad category.

Value Assessment

Rating: fair

The contract value of $36.9 million for dredging services in Alaska needs further benchmarking against similar projects. While the firm-fixed-price structure aims for cost certainty, the remote location and specialized nature of the work could lead to unforeseen expenses. Without detailed cost breakdowns or comparisons to other Alaskan dredging contracts, a definitive value-for-money assessment is challenging. The award to Western Marine Construction, Inc. requires scrutiny of their past performance and pricing on comparable projects to ensure competitive rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were excluded, possibly due to specific qualifications or prior involvement. The number of bidders is not explicitly stated, but the 'limited' competition level suggests fewer than a fully open solicitation, which could impact price discovery and potentially lead to higher costs compared to a scenario with numerous competitive bids.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price achievable through maximum bidder participation. However, the exclusion of sources might have been justified to ensure specialized expertise was available for this complex project.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and potentially commercial entities relying on the St. Paul Harbor for operations. The service delivered is essential dredging to maintain and improve the navigability of St. Paul Harbor. The geographic impact is localized to St. Paul Island, Alaska, a critical maritime hub in the Aleutian Islands. Workforce implications may include employment opportunities for skilled maritime labor, engineers, and support staff, potentially sourced locally or brought in for the project duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the remote Alaskan location and logistical complexities.
Risk of schedule delays given the challenging environmental conditions and potential for weather disruptions.
The 'after exclusion of sources' clause warrants investigation into the rationale and fairness of the exclusion process.
Dependence on a single contractor for a multi-year, critical infrastructure project.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government, transferring cost overrun risk to the contractor.
The contract duration suggests a commitment to long-term infrastructure maintenance and development.
Awarding to Western Marine Construction, Inc. may leverage existing expertise and equipment for this specific type of work.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on dredging and port infrastructure. The market for such specialized services, particularly in remote and challenging environments like Alaska, is often limited to a few experienced firms. The total federal spending on dredging and related maritime construction can fluctuate significantly based on infrastructure needs and appropriations, but projects of this scale are typical for maintaining critical waterways and ports. Benchmarking would involve comparing this contract's unit costs (e.g., per cubic yard dredged) against similar projects undertaken by the Army Corps of Engineers or other agencies in comparable regions.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary consideration or requirement for this specific contract. There is no indication of a small business set-aside or subcontracting goals. This suggests the contract was awarded based on the capabilities and capacity of the prime contractor, and the nature of the work may not lend itself easily to subcontracting opportunities for small businesses in this specialized field.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Army Corps of Engineers, the awarding agency. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price. Transparency may be enhanced through contract award databases and public reporting, but detailed operational oversight and performance monitoring specifics are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Corps of Engineers Civil Works Program
Port and Waterway Infrastructure Projects
Alaska Maritime Infrastructure
Federal Dredging Contracts
Heavy Civil Engineering Construction Contracts

Risk Flags

Potential for cost overruns due to remote location
Risk of schedule delays due to weather
Limited competition may impact price
Environmental compliance risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to WESTERN MARINE CONSTRUCTION, INC.. DREDGING ST PAUL HARBOR, ST PAUL ISLAND ALASKA

Who is the contractor on this award?

The obligated recipient is WESTERN MARINE CONSTRUCTION, 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 $36.9 million.

What is the period of performance?

Start: 2024-08-21. End: 2027-10-31.

What is the specific justification for excluding certain sources in the 'Full and Open Competition After Exclusion of Sources' award?

The justification for excluding specific sources under 'Full and Open Competition After Exclusion of Sources' typically relates to ensuring the contractor possesses unique capabilities, specialized equipment, or prior experience essential for the project's success. For a complex dredging project in a remote Alaskan location, the Army Corps of Engineers might have excluded firms lacking demonstrated expertise in Arctic conditions, ice management, or specific dredging technologies required for the harbor's unique geology. This approach aims to balance broad competition with the need for highly specialized skills, potentially preventing delays or cost increases associated with less experienced bidders. A thorough review of the pre-award documentation and source selection plan would reveal the precise reasons for exclusion.

How does the $36.9 million contract value compare to similar dredging projects in Alaska or other remote regions?

Benchmarking the $36.9 million contract value requires comparing it against similar dredging projects in Alaska or other remote regions, considering factors like volume of material dredged, depth of excavation, distance of material relocation, and environmental mitigation requirements. Projects in Alaska often incur higher costs due to logistical challenges, including transportation of personnel and equipment, limited work windows due to weather, and specialized environmental considerations. Without specific data on cubic yards dredged, project duration, and complexity, a direct comparison is difficult. However, large-scale civil engineering projects in remote areas are inherently expensive. Further analysis would involve examining the Army Corps of Engineers' historical contract data for similar Alaskan projects to ascertain if this award represents a competitive rate for the scope of work.

What are the primary risks associated with executing a nearly four-year dredging contract in St. Paul Island, Alaska?

Executing a nearly four-year dredging contract in St. Paul Island, Alaska, presents significant risks. Logistical challenges are paramount, involving the transportation of large dredging equipment, personnel, and supplies to a remote island location with limited infrastructure. Environmental risks include unpredictable and severe weather conditions (storms, ice, fog), which can halt operations, damage equipment, and impact schedules. Furthermore, the marine ecosystem in the Bering Sea is sensitive, requiring strict adherence to environmental regulations and potentially leading to delays if unforeseen issues arise. The long duration also increases the risk of equipment failure, personnel turnover, and potential changes in regulatory requirements or project scope, all of which could impact cost and timeline.

What is the expected impact of this contract on the local economy and workforce of St. Paul Island?

The impact of this $36.9 million dredging contract on the local economy and workforce of St. Paul Island, Alaska, is likely to be moderate but significant for the island's small population. While the prime contractor, Western Marine Construction, Inc., may bring in specialized personnel and equipment, there could be opportunities for local hiring for support roles, logistics, and potentially some skilled labor if available. The increased activity associated with the project could boost demand for local services, such as accommodation, food, and transportation. However, the extent of direct local employment will depend on the contractor's hiring practices and the availability of qualified local residents. The project's primary economic benefit will be the improved harbor infrastructure, which supports existing fishing and transportation industries crucial to the island's economy.

How does the firm-fixed-price contract type influence the government's exposure to cost fluctuations over the contract's duration?

The firm-fixed-price (FFP) contract type significantly limits the government's exposure to cost fluctuations over the contract's duration. Under an FFP agreement, the contractor assumes the primary responsibility for all costs incurred to complete the work, including labor, materials, overhead, and profit. The agreed-upon price remains constant unless the contract is formally modified due to changes in scope or unforeseen circumstances explicitly covered by contract clauses. This structure provides budget certainty for the government, as the total payment is fixed. However, it places a greater risk on the contractor; if costs escalate beyond their estimates, their profit margin shrinks, or they may incur a loss. Conversely, if they manage costs efficiently, their profit increases. This incentivizes the contractor to control costs and perform efficiently.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: W911KB24B0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2775 HARBOR AVE SW, SEATTLE, WA, 98126

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

Financial Breakdown

Contract Ceiling: $36,910,000

Exercised Options: $36,910,000

Current Obligation: $36,910,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline