Army awards $26.4M contract for Savannah Harbor dredging, exceeding initial estimates

Contract Overview

Contract Amount: $26,425,787 ($26.4M)

Contractor: Marinex Construction Inc

Awarding Agency: Department of Defense

Start Date: 2022-06-30

End Date: 2023-08-04

Contract Duration: 400 days

Daily Burn Rate: $66.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY22 SAVANNAH INNER HARBOR MAINTENANCE DREDGING

Place of Performance

Location: SAVANNAH, CHATHAM County, GEORGIA, 31401

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to MARINEX CONSTRUCTION INC for work described as: FY22 SAVANNAH INNER HARBOR MAINTENANCE DREDGING Key points: 1. Contract value significantly higher than anticipated, suggesting potential cost overruns or market price fluctuations. 2. Sole contractor, Marinex Construction Inc., raises questions about competitive bidding effectiveness. 3. Definitive contract type with a firm fixed price offers some cost certainty but limits flexibility. 4. Project duration of 400 days indicates a substantial undertaking with potential for delays. 5. Geographic focus on Georgia's Savannah Harbor highlights critical infrastructure needs. 6. Absence of small business set-aside warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The contract value of $26.4 million for harbor maintenance dredging appears high when compared to similar, albeit smaller, dredging projects. While specific benchmarks for the Savannah Harbor are difficult to ascertain without more granular data, the awarded amount is notably above typical contract values for routine maintenance. The firm fixed-price structure provides some cost predictability, but the overall value proposition requires closer examination against the scope and expected outcomes.

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 were theoretically allowed to participate. However, the data only specifies two bidders, which is a relatively low number for a contract of this magnitude. This limited competition could have influenced the final price, potentially leading to a higher award than if more robust competition had been present. Further analysis of the bidding process and the number of proposals received would be beneficial.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable through a broader bidding process. This could translate to a higher overall expenditure for the government.

Public Impact

Benefits the U.S. Army Corps of Engineers in maintaining navigable waterways. Ensures continued commercial shipping and economic activity through the Port of Savannah. Supports the maritime industry and associated logistics operations in Georgia. Impacts the local workforce through employment opportunities during the dredging period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have led to a higher price for taxpayers.
The contract value exceeds typical benchmarks for similar maintenance dredging projects.
Lack of transparency regarding the bidding process and evaluation criteria.

Positive Signals

Awarded under full and open competition, theoretically allowing broad participation.
Firm fixed-price contract provides cost certainty for the government.
Project addresses critical infrastructure needs for a major port.

Sector Analysis

This contract falls within the Heavy and Civil Engineering Construction sector, specifically focusing on dredging and waterway maintenance. This is a critical sub-sector for national infrastructure, supporting trade and transportation. The market for large-scale dredging is often concentrated among a few specialized firms. Benchmarking this contract's value against other Army Corps of Engineers dredging projects would provide further context on its cost-effectiveness.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements were mandated. This suggests that large, established firms are likely the primary participants. While this may ensure capacity for large projects, it limits opportunities for small businesses to engage in significant federal contracting work within this sector, potentially impacting the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management divisions. Transparency is generally maintained through contract award databases and public reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. The firm fixed-price nature of the contract simplifies some aspects of financial oversight.

Related Government Programs

Army Corps of Engineers Civil Works Programs
Port Infrastructure Development Projects
Inland Waterways Trust Fund Expenditures
Coastal Navigation Maintenance Contracts

Risk Flags

Potential for cost overruns given award value vs. benchmarks.
Limited competition raises concerns about price discovery.
Lack of small business set-aside may limit broader economic participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to MARINEX CONSTRUCTION INC. FY22 SAVANNAH INNER HARBOR MAINTENANCE DREDGING

Who is the contractor on this award?

The obligated recipient is MARINEX 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 $26.4 million.

What is the period of performance?

Start: 2022-06-30. End: 2023-08-04.

What was the specific scope of work for the Savannah Inner Harbor Maintenance Dredging and what factors contributed to the final award price?

The scope of work for the FY22 Savannah Inner Harbor Maintenance Dredging involved the removal of accumulated sediment to maintain specified depths for navigation within the harbor. This typically includes dredging channels, turning basins, and berthing areas. Factors contributing to the final award price of $26.4 million likely include the volume of material to be dredged, the type of material (e.g., sand, silt, clay), the distance material needs to be transported for disposal, environmental mitigation requirements, and the specialized equipment and personnel needed for such operations. The firm fixed-price nature means the contractor assumed the risk for cost overruns, but the initial bid price would have factored in anticipated costs and profit margins. The limited competition (two bidders) may have also influenced the price offered.

How does the $26.4 million award compare to historical spending on Savannah Harbor dredging or similar Army Corps of Engineers projects?

Comparing the $26.4 million award requires access to historical contract data for the Savannah Harbor specifically, as well as a database of similar Army Corps of Engineers dredging projects. Without direct access to such databases, a precise comparison is difficult. However, general industry knowledge suggests that large-scale maintenance dredging contracts can range from several million to tens of millions of dollars, depending on the volume and complexity. If previous Savannah Harbor dredging projects were significantly less expensive, or if comparable projects elsewhere in the country were awarded at lower figures, it would indicate that this contract may be on the higher end. The 'br': 66064 value in the provided data might represent a benchmark or previous estimate, which this award significantly exceeds, suggesting a potential increase in costs or a more extensive scope than initially planned.

What are the potential risks associated with awarding a contract of this size to a single primary contractor, Marinex Construction Inc.?

Awarding a contract of this magnitude to a single primary contractor, Marinex Construction Inc., presents several potential risks. Firstly, there's a risk of contractor performance issues; if Marinex faces financial difficulties, equipment failures, or labor shortages, the project could face significant delays, impacting port operations. Secondly, limited competition, even if the award was 'full and open,' can reduce the government's leverage in negotiating future contracts or modifications. If Marinex becomes the de facto sole provider for this type of work in the region, they might command higher prices in the future. Lastly, there's a risk of over-reliance; if this contractor is critical to multiple projects, any disruption to their operations could have a cascading effect on federal infrastructure maintenance.

What is the significance of the contract being a 'Definitive Contract' and 'Firm Fixed Price' for the government and taxpayers?

A 'Definitive Contract' is a standard contract type used for procurement, as opposed to a letter contract or other less formal agreements. The 'Firm Fixed Price' (FFP) pricing structure is significant because it establishes a single, final price for the work. This shifts the risk of cost overruns from the government to the contractor. For taxpayers, this means greater cost certainty; the government knows the maximum it will pay, barring any contract modifications. However, it also means that if the contractor performs exceptionally well and incurs lower costs than anticipated, the government does not benefit from those savings. Conversely, if costs escalate beyond the contractor's estimates, the contractor absorbs the loss, which could incentivize them to cut corners if not properly monitored.

Given the contract's duration (400 days) and the absence of small business set-asides, what are the implications for small business participation and the broader economic impact?

A 400-day contract duration for dredging implies a substantial, long-term project. The absence of specific small business set-asides means that opportunities for small businesses are not guaranteed and would likely depend on Marinex Construction Inc.'s own subcontracting decisions. This could limit the direct economic benefits to smaller local firms that might otherwise have competed for or been awarded portions of the work. While large projects often require large prime contractors, proactive subcontracting plans can still foster small business involvement. Without such plans, the primary economic impact might be concentrated among the prime contractor's employees and suppliers, potentially missing opportunities to stimulate a wider base of small businesses in the region.

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: W912HN22B5003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1903 PITTSBURGH AVE, CHARLESTON, SC, 29405

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,425,287

Exercised Options: $26,425,787

Current Obligation: $26,425,787

Actual Outlays: $3,213,125

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline