Army awards $53.5M for Soo Lock construction, a significant civil engineering project

Contract Overview

Contract Amount: $53,492,907 ($53.5M)

Contractor: Trade West Construction, Inc

Awarding Agency: Department of Defense

Start Date: 2020-01-30

End Date: 2022-08-26

Contract Duration: 939 days

Daily Burn Rate: $57.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF NEW SOO LOCK: UPSTREAM CHANNEL DEEPENING

Place of Performance

Location: SAULT SAINTE MARIE, CHIPPEWA County, MICHIGAN, 49783

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $53.5 million to TRADE WEST CONSTRUCTION, INC for work described as: CONSTRUCTION OF NEW SOO LOCK: UPSTREAM CHANNEL DEEPENING Key points: 1. Project aims to deepen the upstream channel for the Soo Lock, enhancing navigation. 2. The contract was awarded to Trade West Construction, Inc. after full and open competition. 3. Fixed-price contract type suggests a defined scope and potential for cost certainty. 4. The duration of the contract spans over two years, indicating a substantial undertaking. 5. This project falls under heavy and civil engineering construction, a critical infrastructure sector.

Value Assessment

Rating: good

The contract value of $53.5 million for channel deepening and lock construction appears reasonable for a project of this scale and complexity. Benchmarking against similar large-scale civil engineering projects managed by the Army Corps of Engineers would provide a more precise value-for-money assessment. The firm-fixed-price structure generally offers good value by shifting cost overrun risks to the contractor, provided the initial pricing was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a healthy level of competition for this significant infrastructure project. This competitive environment is expected to drive more favorable pricing and ensure the selection of a qualified contractor.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality services due to the pressure of multiple firms vying for the contract.

Public Impact

The project directly benefits commercial shipping and navigation by improving access to the Great Lakes. It supports the economic vitality of the region by ensuring continued operation of a key transportation artery. The construction activities will likely create temporary jobs in the Michigan area. Improved lock infrastructure is crucial for the efficient movement of goods, impacting various industries reliant on Great Lakes shipping.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in large civil engineering projects.
Weather-related disruptions are common in construction, especially in northern climates.
Coordination challenges with other ongoing infrastructure projects in the vicinity.

Positive Signals

Firm-fixed-price contract helps control costs.
Award to an established contractor with relevant experience.
Clear objective of improving critical national infrastructure.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically related to water transportation infrastructure. The Soo Lock is a vital component of the Great Lakes St. Lawrence Seaway System, a major corridor for bulk commodities. Spending on such infrastructure is crucial for maintaining national supply chains and economic competitiveness. Comparable projects often involve significant federal investment due to their scale and public benefit.

Small Business Impact

The contract data does not indicate any specific small business set-asides or subcontracting requirements. Given the large scale and specialized nature of this heavy civil engineering project, it is likely that the prime contractor will subcontract portions of the work. However, without explicit set-aside goals, the direct impact on small businesses is not guaranteed, though they may benefit indirectly through subcontracting opportunities.

Oversight & Accountability

The Army Corps of Engineers typically has robust oversight mechanisms for large construction projects, including regular site inspections, progress reporting, and quality assurance protocols. The firm-fixed-price contract structure incentivizes the contractor to manage costs and schedules effectively. Transparency is generally maintained through public contract awards and reporting, though detailed project-specific oversight reports may not always be publicly accessible.

Related Government Programs

Great Lakes Navigation System Improvements
Army Corps of Engineers Civil Works Projects
Infrastructure Investment and Jobs Act Projects
Maritime Transportation Infrastructure

Risk Flags

Potential for cost overruns if unforeseen conditions arise.
Risk of weather-related delays impacting project schedule.
Environmental compliance challenges during dredging and construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.5 million to TRADE WEST CONSTRUCTION, INC. CONSTRUCTION OF NEW SOO LOCK: UPSTREAM CHANNEL DEEPENING

Who is the contractor on this award?

The obligated recipient is TRADE WEST 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 $53.5 million.

What is the period of performance?

Start: 2020-01-30. End: 2022-08-26.

What is the historical spending trend for the Soo Lock project and similar infrastructure upgrades by the Army Corps of Engineers?

Historical spending on the Soo Lock itself has been significant over decades, reflecting its continuous need for maintenance and upgrades. The Army Corps of Engineers manages a vast portfolio of civil works projects, with annual budgets often in the billions. Specific funding for the Soo Lock modernization has been allocated through various appropriations bills and infrastructure initiatives. For instance, the "New Soo Lock" project has seen phased funding over several years. Comparing this $53.5 million award to the total annual budget for the Corps' navigation mission or to other large lock and dam construction projects (e.g., Olmsted Locks and Dam) would provide context. The trend generally shows sustained federal investment in critical water infrastructure, often influenced by economic conditions, national security needs, and legislative priorities like the Infrastructure Investment and Jobs Act.

How does the per-unit cost of channel deepening compare to industry benchmarks for similar projects?

Determining a precise per-unit cost for channel deepening is complex without detailed project specifications (e.g., cubic yards of material removed, depth and width of channel). However, industry benchmarks for dredging and channel modification can be used for comparison. Costs can range widely based on material type (rock vs. sediment), disposal methods, and environmental mitigation requirements. For large-scale civil engineering projects like this, the Army Corps of Engineers often has internal cost estimation models and historical data from similar contracts. A preliminary assessment would involve comparing the total contract value to the estimated volume of excavation or the linear footage of channel improved. Without specific volume data, a direct per-unit comparison is difficult, but the overall contract value suggests a substantial scope of work.

What is Trade West Construction, Inc.'s track record with large federal civil engineering contracts, particularly with the Department of Defense?

Trade West Construction, Inc. has a history of performing federal construction contracts. A review of their contract awards indicates experience in various construction types, including infrastructure projects. Their past performance with the Department of Defense and other federal agencies would be a key factor in their selection for this significant project. Assessing their on-time and on-budget completion rates for similar-sized contracts, as well as any past performance issues or disputes, would provide insight into their reliability. The fact that they were awarded this contract under full and open competition suggests they met the technical and financial qualifications required by the Army Corps of Engineers.

What are the primary risks associated with this specific construction project, and how are they being mitigated?

Key risks for this project include unforeseen subsurface conditions (e.g., encountering unexpected rock formations), environmental challenges (e.g., impact on aquatic life, sediment control), potential for extreme weather delays, and coordination with ongoing operations of the existing Soo Lock. Mitigation strategies likely involve thorough geotechnical surveys prior to construction, robust environmental management plans, flexible scheduling to account for weather, and close coordination with the Army Corps of Engineers and lock operators. The firm-fixed-price contract also incentivizes the contractor to manage risks effectively to avoid cost overruns. The duration of the contract (939 days) allows for some buffer against minor delays.

How does this contract align with broader federal goals for infrastructure modernization and supply chain resilience?

This contract directly aligns with federal goals for infrastructure modernization by upgrading a critical piece of national transportation infrastructure. The Soo Lock is essential for the efficient movement of goods, particularly bulk commodities like iron ore and grain, through the Great Lakes. Enhancing its capacity and reliability contributes to supply chain resilience by reducing potential bottlenecks and ensuring consistent access for commercial vessels. This project supports economic development in the Great Lakes region and the industries that rely on this waterway. It reflects a commitment to maintaining and improving the nation's core transportation networks, a key objective often highlighted in federal infrastructure policy.

What is the expected impact of this project on the local workforce and economy in Michigan?

The construction of the new Soo Lock upstream channel deepening is expected to have a positive, albeit temporary, impact on the local workforce and economy in Michigan, particularly in the Sault Ste. Marie area. The project will create direct employment opportunities for construction workers, engineers, project managers, and support staff. Indirectly, it will stimulate local businesses through increased demand for materials, equipment rentals, lodging, and services. The duration of the contract (over two years) suggests a sustained period of economic activity. Once completed, the improved lock infrastructure will support long-term economic benefits by enhancing the efficiency and capacity of Great Lakes shipping.

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 NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W911XK20B0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 HAFEN LN, MESQUITE, NV, 89027

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

Financial Breakdown

Contract Ceiling: $53,492,907

Exercised Options: $53,492,907

Current Obligation: $53,492,907

Actual Outlays: $12,872,757

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline