Dutra Dredging Company awarded $21M contract for Virginia channel dredging, a definitive contract with firm fixed pricing

Contract Overview

Contract Amount: $21,050,402 ($21.1M)

Contractor: Dutra Dredging Company

Awarding Agency: Department of Defense

Start Date: 2013-11-15

End Date: 2015-01-29

Contract Duration: 440 days

Daily Burn Rate: $47.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DREDGING THIMBLE SHOAL FEDERAL NAVIGATION CHANNEL AND THE CAPE HENRY FEDERAL NAVIGATION CHANNEL

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23606

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to DUTRA DREDGING COMPANY for work described as: DREDGING THIMBLE SHOAL FEDERAL NAVIGATION CHANNEL AND THE CAPE HENRY FEDERAL NAVIGATION CHANNEL Key points: 1. The contract value of $21.05 million represents a significant investment in maintaining critical navigation infrastructure. 2. Dutra Dredging Company, the sole awardee, suggests a focused competition or specialized capability requirement. 3. The firm fixed-price structure indicates a clear understanding of project scope and cost expectations. 4. The contract duration of 440 days points to a substantial, multi-phase dredging operation. 5. The project's focus on Thimble Shoal and Cape Henry channels highlights its importance for regional maritime commerce. 6. The absence of small business set-aside or subcontracting requirements warrants further examination of market participation.

Value Assessment

Rating: good

The contract's total value of $21.05 million for dredging two federal navigation channels appears reasonable given the scope and duration. Benchmarking against similar large-scale dredging projects would provide a more precise value-for-money assessment. The firm fixed-price nature suggests that the government has a clear understanding of the costs involved, potentially leading to better cost control compared to cost-reimbursement contracts. However, without detailed cost breakdowns or comparisons to other bids, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The fact that Dutra Dredging Company was the sole awardee suggests they were either the most competitive bidder on price and technical merit, or that the specific requirements of the project limited the number of capable respondents. The presence of competition, even if resulting in a single awardee, generally supports price discovery and encourages contractors to offer their best terms.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a competitive bidding process, driving down costs and ensuring a wider pool of potential providers.

Public Impact

The primary beneficiaries are maritime industries and businesses operating in and around the Virginia ports, ensuring continued access for commercial vessels. The services delivered include essential dredging to maintain specified depths and widths of the Thimble Shoal and Cape Henry Federal Navigation Channels. The geographic impact is concentrated in Virginia, specifically impacting the Hampton Roads port complex, a major East Coast shipping hub. Workforce implications include employment opportunities for skilled dredge operators, engineers, and support staff within Dutra Dredging Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition if only a few firms possess the specialized equipment and expertise for large-scale federal channel dredging.
Risk of cost overruns if unforeseen geological conditions are encountered, despite the firm fixed-price contract.
Dependence on a single contractor for critical infrastructure maintenance could pose a risk if performance issues arise.

Positive Signals

The firm fixed-price contract provides cost certainty for the government, mitigating the risk of budget overruns.
Awarding to a known entity like Dutra Dredging Company may indicate a track record of successful performance on similar projects.
The full and open competition process, even with a single awardee, suggests an effort to maximize value and explore market capabilities.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on marine construction and dredging. The market for federal channel dredging is specialized, often dominated by a few large firms with the necessary capital, equipment, and environmental compliance expertise. The size of this contract, approximately $21 million, is substantial for a single project within this niche, reflecting the scale of the infrastructure being maintained. Comparable spending benchmarks would involve looking at other Army Corps of Engineers or Department of Transportation dredging contracts.

Small Business Impact

The contract details indicate that small business set-asides were not utilized for this award (ss: false, sb: false). This suggests that the project requirements, likely involving specialized equipment and significant financial capacity, may not have been conducive to small business participation or subcontracting. Further analysis would be needed to determine if opportunities for small business subcontracting were explored or mandated, and what impact this has on the broader small business ecosystem in the marine construction sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, likely through the U.S. Army Corps of Engineers, which is responsible for managing federal navigation projects. Accountability measures are embedded in the firm fixed-price contract terms, requiring Dutra Dredging Company to complete the work to specified standards within the agreed budget. Transparency is generally facilitated through contract award databases and public reporting, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Corps of Engineers Civil Works Program
Federal Navigation Channel Maintenance
Port Infrastructure Development
Maritime Transportation System

Risk Flags

Potential for environmental impact during dredging operations.
Risk of encountering unexploded ordnance (UXO) in navigation channels.
Dependence on specific dredging equipment and expertise.
Weather-related delays impacting project schedule.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to DUTRA DREDGING COMPANY. DREDGING THIMBLE SHOAL FEDERAL NAVIGATION CHANNEL AND THE CAPE HENRY FEDERAL NAVIGATION CHANNEL

Who is the contractor on this award?

The obligated recipient is DUTRA DREDGING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.1 million.

What is the period of performance?

Start: 2013-11-15. End: 2015-01-29.

What is Dutra Dredging Company's track record with the Army Corps of Engineers for similar dredging projects?

Dutra Dredging Company has a history of performing dredging work for the U.S. Army Corps of Engineers. Reviewing past contracts awarded to Dutra Dredging, particularly those involving federal navigation channels of similar scale and complexity, would provide insight into their performance, on-time delivery, and adherence to budget. Data from contract databases can reveal the number and value of previous awards, as well as any reported issues or commendations. Understanding their experience with environmental regulations and permitting processes specific to the regions where they operate is also crucial for assessing their capability and reliability on projects like the Thimble Shoal and Cape Henry channels.

How does the awarded price of $21.05 million compare to the estimated cost or other bids received?

The awarded price of $21.05 million represents the final negotiated cost for the dredging services. To assess value for money, this figure should be compared against the government's independent cost estimate (if available) and the bids submitted by other competitors. If multiple bids were received, the spread between the winning bid and others can indicate the competitiveness of the pricing. A significant difference between the awarded price and the next lowest bid might suggest either exceptional performance by the winner or potentially an underpriced bid. Without access to the full bid data and the government's estimate, it's difficult to definitively state if this represents optimal value, but the firm fixed-price nature implies a level of cost certainty was achieved.

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

Key risks for this dredging project include unforeseen subsurface conditions (e.g., hard rock, debris, hazardous materials) that could increase costs or delay the schedule, adverse weather impacting operations, and potential environmental compliance issues. The firm fixed-price contract shifts the primary financial risk of cost overruns due to scope changes or unforeseen conditions to the contractor, Dutra Dredging Company. Mitigation strategies likely include thorough geotechnical surveys prior to award, detailed project specifications, contingency planning for weather delays, and strict adherence to environmental permits and monitoring protocols. The contract's duration and the contractor's experience also play a role in mitigating execution risks.

How effective is the firm fixed-price contract structure in ensuring project success for federal navigation channels?

The firm fixed-price (FFP) contract structure is generally favored for projects with well-defined scopes and requirements, such as dredging federal navigation channels, as it provides cost certainty for the government. It incentivizes the contractor to manage costs efficiently and complete the work within the agreed-upon price. For federal navigation channels, where the scope of work (e.g., volume of material to be removed, target depths) is often predictable based on surveys, FFP can be highly effective. However, it places a greater burden on the government to accurately define requirements upfront, as significant scope changes can lead to costly change orders. The success hinges on the contractor's ability to accurately estimate costs and manage risks.

What is the historical spending trend for dredging the Thimble Shoal and Cape Henry channels?

Analyzing historical spending for the Thimble Shoal and Cape Henry Federal Navigation Channels is crucial for understanding long-term investment and potential trends. This involves examining past contracts awarded by the Army Corps of Engineers for maintenance and capital dredging in these specific locations. Key data points to look for include the frequency of dredging, the average contract values over time, and any significant increases or decreases in spending. Such analysis can reveal patterns of channel degradation, the impact of increased maritime traffic, or shifts in federal funding priorities for navigation infrastructure. Comparing historical costs per cubic yard dredged can also highlight changes in efficiency or material removal challenges over the years.

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: W9123613B0009

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Dutra Group (UEI: 059133509)

Address: 2350 KERNER BLVD STE 200, SAN RAFAEL, CA, 94901

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

Financial Breakdown

Contract Ceiling: $23,919,338

Exercised Options: $23,919,338

Current Obligation: $21,050,402

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline