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Dredging starts for new Soo Lock construction

Questions remain if Buy America policy, U.S. defense department rules will allow Canadian firms to fully participate in US$922.4-million project

One of the biggest construction projects in the Twin Saults in generations has kicked off just across the border in northern Michigan.

Channel dredging is underway to clear the path for a new navigational lock at Sault Ste. Marie, Mich.

On June 4, Trade West Construction began the task of deepening the approach channel on the upstream – Lake Superior – side of the canal down to a depth of 30 feet (more than nine metres).

The Mesquite, Nev. firm was awarded a US$53-million contract to remove approximately 300,000 cubic yards (229,000 square metres) of mostly bedrock material from the mile-long channel. The company currently has 20 employees on site.

The dredging is the first of a massive three-phase US$922.4-million transportation infrastucture project that will take 10 years to complete.

When finished, the new lock will be able to handle the largest commercial vessels on the Great Lakes and provide a safeguard against a potential breakdown of the largest lock in the Seaway chain, the Poe Lock.

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The Soo Locks are located on the American side of the St. Mary's River between Lakes Superior and Huron. Operated by the U.S. Army Corps of Engineers, the canal allows commercial vessels to transit a 21-foot (6.4-metre) elevation drop between the two lakes.

Only two of the four locks at the American canal are operational, including the smaller MacArthur Lock, built during the Second World War.

A failure of the larger Poe Lock for any length of time would be catastrophic to the North American economy, according to a report by U.S Homeland Security in 2016.

As such, the new lock build is considered very strategic piece of infrastructure, overseen by the U.S. Department of Defense (DoD).

Whether Canadian firms – especially those in Sault, Ont. – will be allowed to participate, in what capacity, and what procedural hoops they may have to jump through, is not clear-cut in the details.

"The question doesn't really lend itself to a simple yes or no answer and really depends upon the particulars of the solicitation," responded Penny Carroll, a project spokesperson in Corps of Engineers' Detroit office, in an email.

Since the American locks are a vital transportation link in the North American manufacturing supply line, the construction is categorized as a U.S. defence industry project. 

Carroll said foreign companies generally aren't eligible for contracts set aside for small businesses, but those firms with operations in the U.S. can sometimes qualify as small businesses.

"For unrestricted procurements, Canadian firms can compete, provided they can meet the requirements of the solicitation and other U.S. law," Carroll said.

She referred further queries to an online document put out by the Canadian Commercial Corporation, the federal agency that assists Canadian firms  in preparing bid proposals on U.S. defence industry contracts.

Watching this whole process unfold has been Dan Hollingsworth, executive director of Sault Ste. Marie Economic Development Corporation.

The new lock build, he said, is of great interest to Canadian firms listening in on the Corps of Engineers' project meetings.

"Last year, I was participating in a meeting with the U.S. Army Corps and they indicated that there was a Canadian firm working on a portion of the project," Hollingsworth said.

The identity of the Canadian company was kept confidential.

"I would expect that this firm did have to employ all U.S. trades (and) workers."

There were also caveats around material purchases for the project, reflective of the Buy America Act.

Hollingsworth is of the belief that Canadian firms could be eligible as prime contractors.

Construction consortiums – a partnership combination of companies that bid on large projects – might qualify, he said.

Hollingsworth knows of a Canadian company, with operations south of the border, that is partnering with a U.S. firm to bid on work for the lock build.

Sault Ste. Marie Construction Association executive director Adam Pinder agrees that might be the way to go.

"Typically, on jobs like this you see lot of larger national and international players to get some of the work because of the size and scope," he said. "It's actually pretty common to get a consortium to develop projects of this size, with joint-venture agreements."

Pinder said he would be surprised if local companies weren't allowed to participate in some way on a mega-project of this complexity, especially as sub-contractors, considering the proximity of the project, and skills and knowledge of industrial service companies on this side of the border.

"I think that they would welcome the opportunity to be involved. It's going to take a lot of organizations and firms and something like a coordinating body, like a prime contractor, to deliver something like this.

"It's a complex project with a lot of inner workings. I'm guessing they're (Corps of Engineers) going to take any expertise they can get to help deliver this, and why wouldn't you take advantage of us on a border city?"

As to what qualifications a prime contractor would need, and what protocols are required for Canadian tradespeople to travel across the border, Pinder admitted he doesn't have information on that.

"It looks like there will an opportunity for Canadian firms to participate in some capacity. I guess the devil's always in the details."

He recalled the last major local project of this stature was the construction of Algoma Steel's Direct Strip Production Complex in the mid-1990s, which involved many local and out-of-town firms and tradespeople.

"We haven't seen major construction on the locks in my lifetime."

The last lock built at the Sault was more than 50 years ago.

The Poe Lock, which opened in 1969, carries more than 90 per cent of all marine cargoes between Lake Superior and Lake Huron. It accommodates ships in excess of 1,000 feet long, carrying iron ore pellets from mines in northern Michigan and Minnesota to steel mills on the lower Great Lakes.

The proposed new lock will mirror the dimensions of the existing Poe Lock at 1,200 feet long (365 metres) by 110 feet wide (33.5 metres).

When the dredging by Trade West is done at the end of 2021, the second phase begins to rehabilitate the upstream approach walls, allowing ships to tie up and wait their turn to transit the lock.

The deadline for bids on that phase closed June 17.

"We plan to have this phase awarded by November 2020, with construction beginning next spring (2021)," said Carroll. "This phase will take a couple of years to accomplish."

The final, most intensive, phase involves constructing the actual lock chamber – an eight-year build – as well as rehabilitation of the downstream approach walls on the Lake Huron side.

The Corps of Engineers said the details of that aspect of the project are still being designed.

To make way for this new construction, two mothballed locks will have to be demolished. Both were built around the time of the First World War and are considered too shallow and narrow for modern ships.

The 'superlock' project had originally been federally authorized in 1986 but progress stalled over the next three decades despite lobbying by Michigan politicians and industry groups.

The matter didn't gain traction until it became a matter of national security.

Five years ago, the MacArthur Lock was unexpectedly shut down for repairs in the middle of the shipping season for 20 days. It delayed cargoes of iron ore pellets, coal and grain to customers, and put the sole reliance of moving freight through the canal on one lock.

Funding was finally authorized by Congress in 2018.