U.S. dredging industry continues with $2.5Billion in newbuilds and capital expenditures—competitive U.S. dredging market saved taxpayers hundreds of millions of dollars in 2022
The U.S. dredging industry is highly competitive and saves the taxpayer hundreds of millions of dollars every year.
In 2022, according to The Mike Hooks Report, An Analysis of the FY22 U.S. Federal Dredging Market, compiled in September 2023 finds the following:
- Fifty-two (52) Jones Act Dredging Companies were awarded federal dredging contracts in FY2022.
- On average there were three (3) bidders per project.
- On twenty (20) projects there were five (5) or more bidders.
- Seventy-two percent (72%) of the time the private sector industry winning bid was lower than the Independent Government Estimate (IGE);
- Ninety-five percent (95%) of the time the private sector industry winning bid was lower than the Government Estimated Awardable Range (GEAR), which is IGE + 25%.
- When compared to the IGE, fifty-nine (59) projects were lower by more than 10%, 27 projects were lower by more than 25%, and 15 projects were lower by more than 40%!!
What does this mean? It means that the U.S. private sector dredging industry is fiercely competitive and is delivering services that saves the federal government, and therefore the taxpayer, hundreds of millions – $670M in FY22 alone.
New construction of Jones Act dredges – U.S. owned, built and crewed vessels have been rolling off the blocks for the past five (5) years and will continue into the foreseeable future – over $2.5Billion in recapitalization.
Let’s review the shipyard order books on the publicly available announcements:
The FY2022 Mike Hooks Report is authored by Michael Gerhardt, Sr. VP of Dredging Contractors of America member company Mike Hooks, LLC.
“The U.S. Jones Act dredging industry is not just highly competitive and in the midst of the largest fleet capitalization ever, but it is reliable. The foreign entities have a tendency to overpromise and underperform— then walk away when times get tough.”
— William P. Doyle, CEO, Dredging Contractors of America.
It should be noted that a so-called dredging report in 2020 issued by the Tulane Institute styled Building Resiliency in America’s Coastline, has been widely discredited. The EU and Tulane have walked away from the report. Indeed, the publishers added a disclaimer to the cover page of the report stating:
“This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of the authors and can in no way be taken to reflect the views of the European Union, Tulane University, or the Tulane Institute on Water Resources Law & Policy.”