Persistent Growth: U.S. Dredging Sector Invests $2.5 Billion in New Builds and Capital Expenditures, Delivering Substantial Savings to Taxpayers in 2022
The competitive nature of the U.S. dredging sector contributes significantly to cost savings for taxpayers each year.
According to The Mike Hooks Report, an analysis conducted in September 2023 on the U.S. Federal Dredging Market for the fiscal year 2022, several key findings highlight the industry’s dynamics:
- A total of 52 Jones Act Dredging Companies secured federal dredging contracts in FY2022.
- On average, each project attracted three bidders.
- For twenty projects, there were five or more bidders.
- In 72% of cases, the winning bid from the private sector was lower than the Independent Government Estimate (IGE).
- In 95% of instances, the private sector’s winning bid was below the Government Estimated Awardable Range (GEAR), calculated as IGE + 25%.
- Compared to the IGE, 59 projects had bids lower by over 10%, 27 projects lower by more than 25%, and 15 projects lower by more than 40%.
This data underscores the fierce competition within the U.S. private sector dredging industry, resulting in substantial savings for the federal government and, consequently, taxpayers – amounting to $670 million in FY22 alone.
Moreover, the ongoing construction of Jones Act dredges, featuring U.S.-owned, built, and crewed vessels, has been a consistent trend over the past five years. This trend is expected to continue, with over $2.5 billion allocated for recapitalization in the foreseeable future.