Army awards $22.6M dredging contract for Houston-Galveston Channel to King Fisher Marine Service

Contract Overview

Contract Amount: $22,639,048 ($22.6M)

Contractor: King Fisher Marine Service, L.P.

Awarding Agency: Department of Defense

Start Date: 2008-11-03

End Date: 2010-04-13

Contract Duration: 526 days

Daily Burn Rate: $43.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: HOUSTON-GALVESTON NAVIGATION CHANNEL, TEXAS, GALVESTON CHANNEL DEEPENING, STA. 20+000 TO 8+031.53 IN GALVESTON COUNTY, TEXAS, PIPELINE DREDGING.

Place of Performance

Location: GALVESTON, GALVESTON County, TEXAS, 77553

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to KING FISHER MARINE SERVICE, L.P. for work described as: HOUSTON-GALVESTON NAVIGATION CHANNEL, TEXAS, GALVESTON CHANNEL DEEPENING, STA. 20+000 TO 8+031.53 IN GALVESTON COUNTY, TEXAS, PIPELINE DREDGING. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 526 days indicates a significant, multi-year project. 3. The firm-fixed-price structure shifts cost overrun risk to the contractor. 4. This project focuses on deepening a critical navigation channel, impacting regional commerce. 5. The award amount of $22.6 million falls within a typical range for major civil engineering projects of this scale.

Value Assessment

Rating: good

The contract value of $22.6 million for dredging services appears reasonable given the scope of work involving deepening a significant navigation channel. Benchmarking against similar Army Corps of Engineers dredging projects would provide a more precise value-for-money assessment. The firm-fixed-price contract type is generally favorable for the government as it caps the contractor's potential earnings and transfers cost overrun risk.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with three bids received. This indicates a healthy level of market interest and suggests that the government received competitive pricing. The presence of multiple bidders generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to drive down costs and ensure the government secures the most advantageous price for the dredging services.

Public Impact

The primary beneficiaries are commercial shipping interests and port authorities reliant on the Houston-Galveston Navigation Channel. The project delivers essential infrastructure improvements by deepening the channel, enhancing navigation capacity. The geographic impact is concentrated in Galveston County, Texas, a key hub for maritime trade. The project supports jobs in the maritime and construction sectors, particularly in dredging operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays impacting the delivery of critical infrastructure improvements.
Environmental concerns related to dredging activities and disposal of dredged material.

Positive Signals

Firm-fixed-price contract structure limits financial risk for the government.
Awarded through full and open competition, indicating a competitive market.
Project addresses a critical need for navigation channel enhancement.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically focusing on maritime infrastructure. The dredging market is specialized, often dominated by a few large firms capable of undertaking such extensive projects. The $22.6 million award is substantial for a single project within this niche, reflecting the complexity and scale of deepening a major navigation channel.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though larger prime contractors may engage small businesses for specialized support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers, responsible for executing civil works projects. Accountability measures are embedded in the contract's performance requirements and payment schedules. Transparency is generally maintained through contract award databases and public reporting, though detailed operational oversight specifics are not provided.

Related Government Programs

Army Corps of Engineers Civil Works Program
Port Infrastructure Development Program
Inland Waterways Trust Fund Projects

Risk Flags

Potential for unforeseen subsurface conditions impacting cost and schedule.
Environmental compliance risks associated with dredging and material disposal.
Weather-related delays impacting project timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to KING FISHER MARINE SERVICE, L.P.. HOUSTON-GALVESTON NAVIGATION CHANNEL, TEXAS, GALVESTON CHANNEL DEEPENING, STA. 20+000 TO 8+031.53 IN GALVESTON COUNTY, TEXAS, PIPELINE DREDGING.

Who is the contractor on this award?

The obligated recipient is KING FISHER MARINE SERVICE, L.P..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2008-11-03. End: 2010-04-13.

What is the historical spending pattern for dredging projects in the Houston-Galveston area by the Department of the Army?

Historical spending data for dredging projects in the Houston-Galveston area by the Department of the Army reveals a consistent investment in maintaining and improving navigation channels. The Army Corps of Engineers regularly allocates funds for such activities due to the strategic importance of the Port of Houston. While specific dollar amounts fluctuate annually based on project needs and budget appropriations, projects in the tens of millions of dollars are not uncommon for major channel deepening or maintenance efforts. For instance, prior to this 2008 award, there would have been preceding maintenance and potentially smaller deepening projects. Post-2010, subsequent projects would have continued to address the evolving needs of maritime traffic and vessel size. Analyzing a decade or more of data would show a pattern of significant, recurring investment, underscoring the ongoing commitment to this vital waterway.

How does the awarded amount of $22.6 million compare to the estimated cost of similar channel deepening projects nationwide?

The awarded amount of $22.6 million for the Galveston Channel Deepening project appears to be within a reasonable range for significant channel deepening efforts. The cost of such projects is highly variable, influenced by factors like the volume of material to be dredged, the type of material (e.g., sand, clay, rock), the distance for material disposal, environmental mitigation requirements, and the specific location's logistical challenges. Larger, more complex projects involving rock excavation or extensive environmental controls can easily exceed $100 million. Conversely, smaller maintenance dredging or less complex deepening in softer soils might cost less. Given that this project involved deepening a major navigation channel, $22.6 million suggests a substantial scope of work, likely competitive for its specific requirements compared to national benchmarks for similar-sized undertakings.

What are the key performance indicators (KPIs) typically included in such dredging contracts to ensure project success?

Key performance indicators (KPIs) in dredging contracts like this typically focus on several critical areas to ensure project success and value for money. These often include adherence to the specified dredging depth and width tolerances, ensuring minimal over-dredging or under-dredging. Project schedule adherence is paramount, with penalties for delays and potential incentives for early completion. The quality of the dredged material placement, whether for beneficial reuse or disposal, is another key KPI, ensuring compliance with environmental regulations. Furthermore, contractor safety performance, measured by incident rates (e.g., Lost Time Injury Frequency Rate), is rigorously monitored. Finally, the efficiency of the dredging operation itself, often measured by cubic yards dredged per hour or per day, can be a KPI, especially if linked to payment or performance evaluations.

What is the track record of King Fisher Marine Service, L.P. in performing similar large-scale federal dredging contracts?

King Fisher Marine Service, L.P. has a history of performing dredging and marine construction services, including work for federal agencies. While specific details on their track record for large-scale federal channel deepening projects require deeper investigation into contract databases and performance reviews, their ability to win a competitive bid for a project of this magnitude ($22.6 million) suggests they possess the necessary capacity, equipment, and expertise. Federal agencies like the Army Corps of Engineers typically conduct pre-award responsibility determinations and monitor contractor performance closely. Examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would provide a more definitive assessment of their reliability, quality of work, and adherence to schedule and budget on previous federal contracts.

What are the potential risks associated with the firm-fixed-price contract type for this dredging project?

While firm-fixed-price (FFP) contracts are generally advantageous for the government by capping costs, they can introduce specific risks, particularly for complex projects like dredging. The primary risk is that the contractor, King Fisher Marine Service, L.P., may face unforeseen conditions (e.g., harder-than-expected material, unexpected obstructions, adverse weather) that significantly increase their costs. If these costs exceed the fixed price, the contractor might be incentivized to cut corners on quality, safety, or environmental compliance to protect their profit margin, although contract clauses usually mitigate this. Conversely, if the contractor significantly underestimates costs or encounters unexpectedly easy conditions, they could realize a very high profit. For the government, the risk is less about cost overrun and more about potential contractor performance issues if they are losing money on the contract.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: W912HY08B0021

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Orion Marine Group, Inc. (UEI: 807676908)

Address: 159 HWY 316, PORT LAVACA, TX, 77979

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,639,048

Exercised Options: $22,639,048

Current Obligation: $22,639,048

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline