Army awards $120.8M contract for Savannah harbor dredging, highlighting significant infrastructure investment

Contract Overview

Contract Amount: $120,792,966 ($120.8M)

Contractor: Norfolk Dredging Company

Awarding Agency: Department of Defense

Start Date: 2019-08-19

End Date: 2021-09-30

Contract Duration: 773 days

Daily Burn Rate: $156.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SAVANNAH INNER HARBOR DREDGING REACHES A&B STATIONS 70+000 TO 103+000, AND KINGS ISLAND TURNING BASIN SAVANNAH, GA.

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31401

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $120.8 million to NORFOLK DREDGING COMPANY for work described as: SAVANNAH INNER HARBOR DREDGING REACHES A&B STATIONS 70+000 TO 103+000, AND KINGS ISLAND TURNING BASIN SAVANNAH, GA. Key points: 1. The contract represents a substantial investment in critical port infrastructure, aiming to improve navigation and economic activity. 2. Competition dynamics for this large-scale dredging project are crucial for ensuring cost-effectiveness and timely execution. 3. Performance risks include potential environmental impacts, weather delays, and the complexity of maintaining deep-water channels. 4. This project is situated within the broader context of national port modernization efforts and supply chain resilience. 5. The dredging sector is characterized by specialized equipment and a limited number of experienced contractors. 6. The firm-fixed-price contract structure shifts some risk to the contractor, encouraging efficient performance.

Value Assessment

Rating: good

The contract value of approximately $120.8 million for dredging services appears reasonable given the scale and complexity of the project, which involves significant channel maintenance and expansion. Benchmarking against similar large-scale federal dredging contracts suggests that pricing is competitive, especially considering the specialized nature of the equipment and expertise required. The firm-fixed-price structure further supports value by incentivizing the contractor to manage costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of four bidders suggests a healthy level of competition for this significant infrastructure project. This competitive environment is expected to drive more favorable pricing and service offerings for the government, ensuring that taxpayer funds are used efficiently.

Taxpayer Impact: Full and open competition for this dredging contract likely resulted in a more competitive bid landscape, potentially leading to cost savings for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the U.S. Army Corps of Engineers and the broader maritime industry, facilitating smoother and more efficient shipping through the Port of Savannah. The services delivered include the dredging of specific reaches of the Savannah Inner Harbor and the Kings Island Turning Basin, ensuring adequate channel depth and width. The geographic impact is concentrated in Savannah, Georgia, but the improved port efficiency has national and international economic implications for trade and supply chains. The project supports skilled labor in the maritime and construction sectors, including dredge operators, engineers, and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for environmental disturbances during dredging operations.
Risk of project delays due to unforeseen geological conditions or weather events.
Ensuring long-term effectiveness of dredging in maintaining channel depth against natural sedimentation.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
Firm-fixed-price contract type allocates cost risk to the contractor.
Significant investment in critical national infrastructure.

Sector Analysis

The dredging and marine construction sector is vital for maintaining and expanding port infrastructure, supporting global trade and domestic commerce. This contract falls within the heavy and civil engineering construction category, which requires specialized equipment and expertise. The market is characterized by a limited number of large firms capable of undertaking projects of this magnitude. Federal spending in this area is often driven by infrastructure improvement initiatives and national security needs related to port access.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the primary contractor, Norfolk Dredging Company, is a large entity, the potential for subcontracting opportunities for smaller, specialized firms within the construction and maritime support industries exists. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

The U.S. Army Corps of Engineers typically provides oversight for such dredging contracts, monitoring progress, quality, and compliance with environmental regulations. The firm-fixed-price nature of the contract incentivizes the contractor to manage costs and timelines effectively. Transparency is generally maintained through contract award databases and reporting requirements, though specific day-to-day operational oversight details may not be publicly detailed.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Port Infrastructure Development Program
National Defense Authorization Act - Maritime Security

Risk Flags

Environmental Compliance
Schedule Adherence
Geotechnical Uncertainty
Weather Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $120.8 million to NORFOLK DREDGING COMPANY. SAVANNAH INNER HARBOR DREDGING REACHES A&B STATIONS 70+000 TO 103+000, AND KINGS ISLAND TURNING BASIN SAVANNAH, GA.

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 $120.8 million.

What is the period of performance?

Start: 2019-08-19. End: 2021-09-30.

What is the historical spending trend for Savannah harbor dredging projects by the Department of the Army?

Historical spending data for Savannah harbor dredging by the Department of the Army indicates a pattern of significant, recurring investments to maintain and deepen the channel. While specific figures for past projects vary based on scope and economic conditions, the Army Corps of Engineers consistently allocates substantial funds to ensure navigability. For instance, prior phases of the Savannah Harbor Expansion Project (SHEP) involved considerable expenditures over several years. This $120.8 million contract represents a major component of ongoing efforts, reflecting the long-term commitment to upgrading this vital East Coast port. Analyzing trends reveals that dredging costs are influenced by factors such as inflation, environmental mitigation requirements, and the scale of the deepening or widening efforts undertaken.

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

Direct per-unit cost comparisons for dredging contracts are complex due to variations in project scope, material removed, depth, distance of spoil disposal, and specific site conditions. However, the $120.8 million contract for the Savannah Inner Harbor and Kings Island Turning Basin, covering approximately 33,000 linear feet of channel, suggests a significant undertaking. Benchmarking against other large federal dredging projects, such as those in Houston, Los Angeles, or Norfolk, requires detailed analysis of cubic yards dredged, depth achieved, and disposal methods. Preliminary assessments suggest that the pricing is within the expected range for major port deepening and maintenance projects, especially considering the firm-fixed-price structure which often incorporates contingency. A more precise comparison would necessitate access to detailed cost breakdowns and specifications of comparable projects.

What are the primary risks associated with the performance of Norfolk Dredging Company on this contract?

Norfolk Dredging Company, as a seasoned contractor in this field, faces several performance risks on this $120.8 million contract. Key risks include potential environmental impacts, such as the disturbance of marine habitats or the management of dredged material, which require strict adherence to environmental regulations. Operational risks involve the possibility of equipment breakdowns, the need for specialized maintenance, and the logistical challenges of working in a busy shipping channel. Furthermore, project schedule risks are significant, stemming from potential weather delays (hurricanes, storms), unforeseen subsurface conditions (rock, debris), and the coordination required with port authorities and vessel traffic. The firm-fixed-price nature of the contract means that cost overruns due to these risks would primarily impact the contractor, incentivizing proactive risk management.

What is the expected impact of this dredging project on the Port of Savannah's cargo capacity and efficiency?

This dredging project is expected to significantly enhance the Port of Savannah's cargo capacity and operational efficiency. By deepening and widening specified sections of the Inner Harbor and the Kings Island Turning Basin, the contract aims to accommodate larger, neo-Panamax vessels. This increased draft capability allows the port to handle bigger ships more effectively, leading to higher throughput of goods. Improved channel dimensions also facilitate safer and more efficient vessel movements, reducing transit times and potential delays. Ultimately, this infrastructure upgrade is designed to bolster Savannah's competitiveness as a major East Coast gateway, supporting increased trade volumes and strengthening supply chain resilience.

How does the $120.8 million contract value compare to the total federal spending on dredging and port infrastructure in recent fiscal years?

The $120.8 million contract for Savannah harbor dredging represents a substantial, but not unprecedented, portion of federal spending on port infrastructure. Federal investments in dredging and related port improvements are typically allocated through the Army Corps of Engineers' Civil Works budget and other transportation initiatives. Annually, federal spending on such projects can range from hundreds of millions to over a billion dollars, depending on the number and scale of active projects nationwide. This single contract highlights the significant investment required for major port modernization efforts. Compared to the overall federal budget for maritime infrastructure, this award is a considerable allocation for a single, critical project, underscoring the importance of the Port of Savannah to national commerce.

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: W912HN19B5001

Offers Received: 4

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: $120,792,966

Exercised Options: $120,792,966

Current Obligation: $120,792,966

Actual Outlays: $5,646,190

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline