Fair and Reasonable: A Conceptual Insight into USACE Dredge Estimating

The USACE boasts a navigation portfolio of over 19,312 km (12,000 mi) of shallow draft [from 2.74 m (9 ft) to 4.27 m (14 ft)] inland and intracoastal waterways, 20,921 km (13,000 mi) of deep draft [4.27 m (14 ft) and greater] channels, and 400 ports, harbors, and turning basins. To ensure that these channels remain navigable and at congressionally authorized dimensions, channel maintenance practices are performed annually by dredging. Most of these dredging operations are performed by private companies under contract to the USACE districts. With an abundance of navigation channel maintenance needs and a limited dredging fleet, accurate scheduling and the timely arrival of the dredging fleet is required. Project delays due to production issues, weather delays, contracting issues, or both will generally impact future scheduled projects, navigation, and commerce. Nonawardable bids happen when the contractor(s) proposal(s) are too high compared with the Independent Government Estimate (IGE). These nonawardable bids lead to significant time delays, because the USACE district must then engage in bid verification calls, negotiations, the potential cancellation of the contract solicitation, or both and the subsequent resolicitation for work. Therefore, it is extremely important that USACE cost estimates adequately reflect the level of effort the project requires when capturing all project-associated costs. This paper aims to summarize the USACE conceptual approach to dredge cost estimating by highlighting the complex variables that are associated with this type of estimate.