Orion Marine Group, Inc., a heavy civil marine contractor, has just announced an update on the company’s end markets.
An overall asset utilization during the second quarter was affected by inconsistent lettings from the Army Corps of Engineers and delays in the timing of certain project awards.
Additionally, the record levels of rainfall and flooding in Texas impacted production on certain jobs in the Texas market. This rainfall and flooding activity should lead to an increased need for dredging in the coming months.
Orion has already received a $2 million change order to an existing contract to perform emergency dredging in Texas.
The company saw a healthy level of bid market activity during the second quarter. During the second quarter the company bid on approximately $376 million worth of opportunities and was successful on approximately $100 million, representing a win rate of approximately 26%.
Orion currently has approximately $350 million worth of bids outstanding; of which the company has been notified it is the apparent low bidder on approximately $35 million.
Federal & State Update
With only 3 months left in the Federal Government’s fiscal year, the Army Corps of Engineers has only let half of the projects the company expected to bid in fiscal 2015. While this has resulted in underutilized equipment in the first half of 2015, Orion expects most of these jobs to be let before the end of the Corps fiscal year, providing opportunity to improve utilization in the second half of 2015.
Looking towards the fiscal 2016 Federal budget, the company is hopeful the appropriations process can be complete with full year funding for the Corps put in place prior to the beginning of October, eliminating the need for a continuing resolution and providing for a more consistent pace of Corps lettings.
The Corps FY 2016 appropriation has already been fully passed by the House of Representatives and the Senate Appropriations Committee on Energy, and Water Development and awaits a full vote by the Senate.