Norfolk Dredging Company awarded $21.7M for channel maintenance, highlighting significant O&M and CG funding

Contract Overview

Contract Amount: $21,718,739 ($21.7M)

Contractor: Norfolk Dredging Company

Awarding Agency: Department of Defense

Start Date: 2014-08-29

End Date: 2015-04-24

Contract Duration: 238 days

Daily Burn Rate: $91.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF:CT:IGF, MAINTENANCE DREDGING, VARIOUS CHANNELS SECTIONS, BALTIMORE HARBOR AND CHANNELS AND C&D APPROACH CHANNELS, CHESAPEAKE BAY, MARYLAND FUNDING: O&M - 096 NA X 2014 3123 = $9,204,281.68 CG - 096 NA X 2014 3122 = $9,579,966.64

Place of Performance

Location: CURTIS BAY, BALTIMORE CITY County, MARYLAND, 21226

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $21.7 million to NORFOLK DREDGING COMPANY for work described as: IGF:CT:IGF, MAINTENANCE DREDGING, VARIOUS CHANNELS SECTIONS, BALTIMORE HARBOR AND CHANNELS AND C&D APPROACH CHANNELS, CHESAPEAKE BAY, MARYLAND FUNDING: O&M - 096 NA X 2014 3123 = $9,204,281.68 CG - 096 NA X 2014 3122 = $9,579,966.64 Key points: 1. The contract value of $21.7 million was split between Operations & Maintenance (O&M) and Construction General (CG) funding streams. 2. Awarded through full and open competition, indicating a competitive bidding process for the dredging services. 3. The contract duration of 238 days suggests a focused, project-specific scope of work. 4. The firm-fixed-price contract type shifts risk to the contractor, ensuring cost certainty for the government. 5. This contract falls under the 'Other Heavy and Civil Engineering Construction' NAICS code, a common category for infrastructure projects. 6. The geographic focus on Baltimore Harbor and Chesapeake Bay channels points to critical maritime infrastructure maintenance.

Value Assessment

Rating: good

The total award of $21.7 million for dredging services appears reasonable given the scope of maintaining major shipping channels in Baltimore Harbor and the Chesapeake Bay. While specific per-unit cost benchmarks for dredging are highly variable based on location, material, and equipment, the contract's firm-fixed-price nature suggests that the government secured a predictable cost. Comparing this to similar large-scale channel maintenance contracts would provide a more precise value assessment, but the scale of the project implies a significant investment in critical infrastructure.

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 bids. The presence of 3 bidders indicates a healthy level of competition for this significant dredging project. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective solution for maintaining vital waterways, ensuring efficient use of public funds.

Public Impact

The primary beneficiaries are maritime industries and businesses relying on the navigability of Baltimore Harbor and Chesapeake Bay channels. Services delivered include essential maintenance dredging to ensure safe passage for commercial and recreational vessels. The geographic impact is concentrated in Maryland, specifically affecting the economic activity and transportation networks linked to these waterways. The contract supports the workforce employed by the dredging industry, including skilled operators and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen subsurface conditions are encountered, though mitigated by firm-fixed-price contract.
Environmental impact concerns related to dredging operations, requiring strict adherence to environmental regulations.
Dependence on specific dredging equipment and availability, which could lead to delays if issues arise.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Contract addresses critical infrastructure maintenance, ensuring continued economic activity.
Experienced contractor likely involved, given the specialized nature of dredging.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on maritime infrastructure maintenance. The dredging industry is specialized, requiring significant capital investment in equipment and expertise. The market size for such services is substantial, driven by the continuous need to maintain navigable waterways for commerce and defense. This contract represents a typical investment in maintaining critical port infrastructure, comparable to other large-scale civil engineering projects.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor, Norfolk Dredging Company, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for specialized services or supplies, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army Corps of Engineers, given its role in managing waterways. Accountability measures are inherent in the firm-fixed-price contract, requiring the contractor to complete the work as specified. Transparency is generally maintained through contract award databases and public reporting, though specific operational oversight details are not provided.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Port Infrastructure Development Program
Inland Waterways Trust Fund
Maritime Security Program

Risk Flags

Potential for unforeseen subsurface conditions impacting cost and schedule.
Environmental compliance risks related to dredging and material disposal.
Weather-related delays impacting project timeline.
Equipment operational risks and potential for failure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.7 million to NORFOLK DREDGING COMPANY. IGF:CT:IGF, MAINTENANCE DREDGING, VARIOUS CHANNELS SECTIONS, BALTIMORE HARBOR AND CHANNELS AND C&D APPROACH CHANNELS, CHESAPEAKE BAY, MARYLAND FUNDING: O&M - 096 NA X 2014 3123 = $9,204,281.68 CG - 096 NA X 2014 3122 = $9,579,966.64

Who is the contractor on this award?

The obligated recipient is NORFOLK 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 $21.7 million.

What is the period of performance?

Start: 2014-08-29. End: 2015-04-24.

What is the historical spending pattern for maintenance dredging in Baltimore Harbor and Chesapeake Bay by the Army Corps of Engineers?

Historical spending on maintenance dredging for Baltimore Harbor and Chesapeake Bay by the Army Corps of Engineers has been substantial and recurring. These channels are vital arteries for commerce, requiring continuous upkeep to counteract natural sedimentation. Annual expenditures can fluctuate based on project scope, environmental conditions, and available funding, often ranging in the millions of dollars. The funding for such projects typically comes from the Operations & Maintenance (O&M) budget, supplemented by specific appropriations for capital improvements or emergency dredging needs. Analyzing past contracts, such as the one awarded to Norfolk Dredging Company in 2014 for approximately $21.7 million, provides a benchmark for the scale and cost of these essential maintenance activities. Trends may also show shifts in dredging techniques, environmental mitigation requirements, and the competitive landscape among dredging contractors over time.

How does the per-unit cost of this dredging contract compare to similar projects in other major U.S. ports?

Directly comparing the per-unit cost of this dredging contract to similar projects in other U.S. ports is challenging without detailed breakdowns of cubic yards dredged, material type, and specific site conditions. Dredging costs are highly variable, influenced by factors such as the type of material (sand, silt, rock), the depth and width of the channel, disposal methods, and environmental regulations. However, the $21.7 million award for maintenance dredging in Baltimore Harbor and Chesapeake Bay suggests a significant undertaking. Larger, more complex projects in major ports like Los Angeles/Long Beach or New York/New Jersey might involve higher total costs but could potentially have lower per-unit costs due to economies of scale or different material compositions. Conversely, smaller ports or those with more challenging subsurface conditions might see higher per-unit rates. The firm-fixed-price nature of this contract implies that the government sought cost certainty, and the competitive bidding process likely aimed to achieve a market-competitive rate for the specific scope of work.

What are the key performance indicators (KPIs) used to evaluate the success of this maintenance dredging contract?

Key performance indicators (KPIs) for a maintenance dredging contract like this typically focus on ensuring the channel remains at its authorized depth and width, facilitating safe navigation. Primary KPIs would include adherence to the project schedule, ensuring dredging is completed within the specified timeframe (238 days in this case) to minimize disruption to port operations. Another critical KPI is the volume of material dredged and correctly disposed of, meeting environmental compliance standards. The final depth and width achieved in the dredged areas, verified through hydrographic surveys, are paramount. Contractor performance regarding safety protocols and incident rates during operations would also be monitored. Finally, the overall cost performance against the firm-fixed-price award is a key indicator of financial success for the government, ensuring the project was completed within budget.

What is Norfolk Dredging Company's track record with similar Army Corps of Engineers contracts?

Norfolk Dredging Company has a significant track record of performing dredging services, particularly for the U.S. Army Corps of Engineers. As a long-standing entity in the dredging industry, they have likely been involved in numerous maintenance and construction dredging projects across various East Coast ports and waterways. Their experience would encompass a wide range of tasks, from routine channel maintenance to more complex capital dredging projects. Awards like the $21.7 million contract for Baltimore Harbor in 2014 are indicative of their capacity and capability to handle large-scale federal contracts. A review of their contract history would reveal the types of projects undertaken, their performance ratings on past contracts, and their success in competitive bidding processes with the Corps of Engineers. This history suggests a familiarity with the agency's requirements, specifications, and contracting procedures.

What are the potential risks associated with this type of heavy civil engineering construction contract?

Several potential risks are associated with heavy civil engineering construction contracts, particularly in dredging. One primary risk is encountering unforeseen subsurface conditions, such as hard rock, debris, or hazardous materials, which can significantly increase costs and extend project timelines, although a firm-fixed-price contract aims to mitigate cost increases for the government. Environmental risks are also substantial; improper disposal of dredged material or accidental spills can lead to regulatory fines, project delays, and reputational damage. Operational risks include equipment failure, which can cause delays, and safety incidents, which pose risks to personnel and can lead to work stoppages. Furthermore, weather-related disruptions, especially in coastal environments like Baltimore Harbor, can impact schedules. Finally, the contractor faces financial risk if their cost estimates are inaccurate or if they encounter unexpected project complexities.

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: SEALED BID

Solicitation ID: W912DR14B0009

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 110 CENTERVILLE TPKE N, CHESAPEAKE, VA, 23320

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

Financial Breakdown

Contract Ceiling: $21,718,739

Exercised Options: $21,718,739

Current Obligation: $21,718,739

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline